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Labor warns against MySuper changes

Shadow financial services minister Bernie Ripoll has claimed credit for a reported reduction in retail and industry super fund fees, warning the government not to dismantle MySuper.

Speaking at the SMSF Professionals’ Association of Australia conference in Brisbane on Friday, Mr Ripoll said the 23 per cent decline in “the level of fees” is a result of the previous government’s policy work.

However, while greater competition has been fostered under the MySuper regime, the shadow minister expressed concerns about any efforts by the current government to make amendments to the system.

“While the government has yet to make a decision on this, when in Opposition the Coalition was critical of the role of the Fair Work Commission in the process, considering that any approved MySuper product should be able to be chosen by employers and not by the FWC based on a different set of principles,” Mr Ripoll said.

“Any changes in this area could lead to more fees and commissions rather than better value for consumers, particularly given the very low average account balances of both the for-profit and not-for-profit funds at below $30,000.

“Given the determination of the Assistant Treasurer to make changes in this area, and in my view not for the better, the debate around transparency, disclosure and fees will continue for some time in trying to deliver a best outcome for retirees.”

The Financial Services Council recently called on the government to end the Fair Work Commission’s role in selecting default MySuper funds, citing an “unnecessary” duplication of existing regulatory checks and balances.

“[We] urge the government to disband the Fair Work Commission default fund selection process as a priority,” said FSC chief executive John Brogden.

“MySuper funds are approved in a detailed process by the prudential regulator, APRA. The role of the Fair Work Commission is a duplication of an existing process by the appropriate body.”