Since the Morrison government announced the Your Future, Your Super reforms, many within the industry have questioned their narrow focus on investment fees at the expense of the sky-high admin fees charged by a significant chunk of the superannuation sector.
The answer, it turns out, is that it’s in the too hard pile.
“The underperformance measure measures your skills as an investment manager, not necessarily your overall returns. There are some things that can be measured objectively and there are some things that can’t be measured objectively,” senator Jane Hume told media on Thursday.
The idea that paying too much for something is an ill-defined concept that the government can’t possibly hope to wrap its head around – let alone regulate – doesn’t pass the pub test Ms Hume and her colleagues are so fond of applying to anything they believe wouldn’t meet consumer expectations, whether that’s funds spending big on advertising or chiming in on the climate debate.
Especially when Ms Hume has excoriated big funds, including AustralianSuper, for raising their admin fees in the past.
“It’s a clear sign of a system built on complacency and inertia where the country’s largest super fund’s solution to a fee cap on low-balance accounts is to slug all other members with a new percentage-based fee, which comes on top of the 50 per cent increase in their administration fee less than a year ago…Members should expect more and can always vote with their feet,” Ms Hume said in 2020.
Ms Hume rightly noted that the superannuation industry is “far and away the most frustratingly partisan sector of financial services”. Reforming it – ensuring that it is, in her words, “watertight and steaming towards the best retirement outcomes” – is a noble goal that everybody who believes in Australia’s world-class retirement system should be happy to get behind. But failing to include these measures in the reforms only raises questions about the government’s true commitment to that goal.
