The government will now work to prevent the creation of unintended multiple superannuation accounts when Australians change jobs and hold funds to greater account for underperformance through the “Your Future, Your Super” package.
“To protect members from poor outcomes and encourage funds to lower costs, the government will require superannuation products to meet an annual objective performance test,” said Assistant Minister for Superannuation Jane Hume.
“Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.”
Super funds will also be required to h provide “better information regarding how they manage and spend members’ money” in advance of annual member meetings.
The changes have met with a mixed reception from the Australian Institute of Superannuation Trustees (AIST), which called the budget a “missed opportunity” to improve retirement outcomes for low- and middle-income earners and women.
“We will need to see the stapling scheme in more detail, but we do have a number of concerns,” said AIST CEO Eva Scheerlinck.
“There is the danger of people being mis-sold or stapled to an underperforming fund outside the default system. It is also a concern that there may be individuals who find themselves uninsurable because they are stapled to a fund whose insurance does not cover their occupation.
“There is no place for underperformance in defaults but the government has failed to address the greatest area of consumer harm in super which is outside the default system.”
There goes Millions of Dollars spent developing ROBO advice for this type of Advice.
under performance compared to what. It’s difficult to compare when asset allocation are not transparent.
This is a good thing as long as the parameters for the performance test aren’t ridiculous.
In response to AIST CEO Eva Scheerlinck’s worries, is this not why we have a need for Financial Advisers????
Great news. Set performance targets so that the industry funds set a higher allocation to their unlisted illiquid assets. That way they’ll be able to manipulate their way to the targets, too easy, what could possibly go wrong.
If the local charitable organisation is required to hold an AGM, then billion dollar “not for profit” super funds should be required to hold annual general meetings as well
They do
they are required to…