JANA, an investment consultant to many of Australia’s largest super funds, warned that the government’s Your Future, Your Super reforms would promote an “averageness mindset” as funds are driven to be within 0.50 per cent of an index benchmark.
But the assistant minister for superannuation Ms Hume disagreed, saying “I don’t think that’s right at all”.
“We know that super funds at the moment are already investing in infrastructure and alternative asset classes in order to create that alpha, that excess return, and they’re doing a really good job with it,” Ms Hume told Investor Daily.
“I don’t think that holding those funds to account for their performance is going to be a problem at all. In fact, I think that a lot of them would embrace that opportunity to be compared to those funds that aren’t really living up to those expectations.”
Ms Hume has previously noted that it’s also not the government’s intention to compel industry consolidation – another of JANA’s concerns – but that the government will “keep reforming superannuation until it’s as efficient a system as it can be”.
But the reforms have quickly become another point of contention between the government and super funds, with trustees warning that the benchmarking and disclosure requirements would do little to clean up the industry.
“In a compulsory super system, good disclosure is essential, and this includes providing simple, accessible tools for consumers to make informed decisions about their super,” said Australian Institute of Superannuation Trustees (AIST) CEO Eva Scheerlinck.
“…naming and shaming won’t go anywhere near to fixing systemic underperformance in our super system, which is a job for the regulators. So there is a real danger when you are stapling people to a product and relying only on disclosure alone to protect their interests.”
