The financial services industry, with the government's help, must do more to improve the low level of member engagement with superannuation, says Assistant Treasurer Josh Frydenberg.
Addressing the Workplace Super Specialists Australia Conference yesterday via video, Mr Frydenberg said member engagement with superannuation still sits at a low level and that many people still do not make active choices in relation to super.
"The Productivity Commission, in its 2012 inquiry into default superannuation funds in modern awards, noted that about 70 per cent of employees are members of the default fund selected by their employer and of those who default into their employer's default fund, roughly 80 per cent are in the default investment option," said Mr Frydenberg.
"These statistics highlight that we need to do more – as government and as industry.
"I'm passionate about increasing levels of financial literacy across the community and am interested in partnering with industry on initiatives that can make a difference," he said.
Mr Frydenberg said the industry and government should not be content with the current levels of disengagement.
"It is here that I believe the [industry] has a unique opportunity to play a role to engage directly with employees at a workplace level, in a very practical way," he said.
This may require further regulatory change in the area, such as addressing the effects of the FOFA laws, he said.
During the video address, Mr Frydenberg also said the government is focused on the bipartisan recommnedation from the Parliamentary Joint Committee on Corporations and Financial Services.
"We are close to finalising our approach in this area and remain focused on achieving a broad consensus, and bipartisan support in the Parliament," he said.
"I recognise that transitional arrangements will be very important to ensuring we retain experienced advisers in the industry, at a time when they will be most needed to mentor those new, younger advisers entering the industry."
"That is why before legislation is introduced, further consultation will be undertaken to settle key remaining implementation, timing and transition issues," Mr Frydenberg said.
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