Addressing a Pritchitt Bland Communications event on Thursday, Ms Hume said that while the early release scheme had boosted member awareness around retirement savings, “encouraging members to engage with their super continues to be a difficult door to unlock”.
At the same time, the increasing politicisation of debates around the SG and other changes to the system made it difficult for consumers and policymakers to assess the best way forward, she said.
“Super is far and away the most frustratingly partisan sector of financial services and every piece of legislation, even the most logical and practical of changes, has been contested,” Ms Hume said.
“Bewilderingly sometimes they are contested for the opportunity to have a public stoush over philosophy or legacy, nothing to do with the merits of substantive policy.”
The government’s super consumer advocate body, flagged in the October federal budget, would provide government and fund members with independent research to inform future policy decisions, she said.
“There are an awful lot of voices around industry but there aren’t too many voices on behalf of the members – not a sector, just all members of super funds,” she said.
“A clear area of the body will be a high performing research function and that will help the government inform further discussion.”
Ms Hume said a consultation period had already been underway with industry around the proposal, which had been a previous recommendation of the Productivity Commission’s report into the efficiency of the super system.
“We’re focused on getting these settings right – the government has consulted quite extensively on this with stakeholders in the industry on what the body’s functions should be, what the governance should be, the accountability arrangements and we will be announcing an application process in the second quarter of this year,” she said.
Submissions had been received to Treasury in December and January by major super funds and industry associations, with the proposal receiving broad support while some bodies questioned the detail of the advocate’s potential make-up.
“The concept of a ‘consumer’ in super is an interesting one because super is not a typical consumer market,” Industry Super Australia’s submission said.
“Fund members are not strictly consumers of super. They have multiple overlapping identities as employees, investors in the economy [and] retirees enjoying the fruits of their labour and savings. This means the role of a consumer advocacy body needs to carefully be defined and scoped appropriately.”
Super advocacy body Super Consumers Australia, whose funding expires in mid-2021, has already made a bid to be considered as the new advocate.
“Super Consumers Australia has been effective in advocating for legislative reform which will boost people’s retirement savings and reduce complexity, including supporting the passage of the Putting Members’ Interests First legislation,” the body said in its submission.
“The organisation is proof of concept for an expanded and effective consumer advocate and has an established track record.”
One difficulty is that members are a very varied lot and their preferences and needs can differ – taking $20k out of super when you are 25 and gambling it away is what you want but is not good for you.