In the same week draft regulations of the bill were criticised as “highly problematic”, Super Consumers Australia has now called on Parliament to implement three steps to the reforms to ensure it passes:
1. Remove or reassign the ministerial express power to prohibit expenditure.
2. Make sure APRA has the toolkit to ensure consumers don’t languish in funds that harm their financial security in retirement.
3. Fix laggard default insurance funds with occupational exclusions or restrictions so we don’t have more carve-outs.
“We’re almost there. These fixes will drive super funds to provide better quality insurance products, increase probity in Government processes, and place greater scrutiny on funds by holding underperformers to account,” Super Consumers director Xavier O'Halloran said.
“It has been disappointing to see industry lobby groups attempt to delay or water down the legislation because the problems they’ve identified are totally within the industry’s power to control.
“Industry continues to argue for stapling and transparency carve-outs that don’t address the underlying issue of inappropriate default insurance and poor fund performance. These carve outs will be inefficient, continue to embed fee sucking multiple accounts and will do nothing to ensure people end up in good funds.
“We shouldn’t let the deficiencies of super funds hold back positive consumer reform.
“It’s time to end the delay and get on with putting the feet of underperforming super funds to the fire, and fix default insurance”.
Minister for superannuation Jane Hume insists the Your Future, Your Super reforms are “more important now than they’ve ever been”.
“The industry is now $3.1 trillion in size. So, these reforms are all about having your fund follow you from job to job, making it easier to choose a better fund, holding funds to account for their underperformance and increasing transparency and accountability,” Ms Hume said in an interview with ABC’s Fran Kelly.
“What we have done around increasing transparency and accountability is ensure that we’ve clarified trustees’ duties, adding the word ‘financial’ into the beneficiary’s best interests and making sure it’s their best financial interests is part of that.”
Crossbench MP Bob Katter, Jacqui Lambie and former Liberal MP Craig Kelly are notable names who have criticised the bill and in a separate interview with Sky News, Ms Hume said she has had conversations about their concerns.
“Well, we’ve certainly spoken – we’ve had conversations with all of the crossbench, as we do with all superannuation legislation,” Ms Hume said.
“Superannuation is a highly contested area, always has been. I do not think that we’ve passed a single superannuation bill in the last couple of years that hasn’t been contested, but, that said, it’s also quite complicated and it’s important that we can speak to each of the crossbenchers and clarify their concerns.
“We’ve done that already with some of them and we’ll continue to do that if they have continued concerns, but I have no doubt that we’ll pass these reforms because it is so important to do so.”
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
