Superannuation shake-up

AUSTRALIANS could retire with more than $500,000 extra in superannuation if the Federal Government revamps the $2.8 trillion sector, according to a landmark report.

But the superannuation industry is worried some proposed changes could undermine the strength of the nation’s retirement savings system.

Revoking the licences of superannuation funds that persistently underperform is among advice in the Productivity Commission’s report, tabled in parliament yesterday. Changes could see Aussies retire with extra $500k

The report also recomannuation system is serving tralians into funds that were mends Australians only be ofAustralians reasonably well performing well, with the curfered a default superannuation but has significant structural rent system creating a “lottery” fund when they first join the flaws. of results for new members. workforce. The Government will not “We want to put the inter

Beyond that, the commismake its final response to the ests of members first,” he told sion says employees should be report until it’s received the reporters in Melbourne. given a list of the 10 best superfindings of the banking royal “I’m not interested in the annuation funds to choose commission in February, politics of the superannuation from when they start a new which looked at the conduct of industry. I’m interested in the job, as chosen by an indepensuper funds and how they’re benefits that flow to members.” dent expert panel. regulated. He said the report support

Such changes could help But Mr Frydenberg (piced many of the Government’s someone joining the worktured) said there was merit in proposed changes to superanforce today earn $533,000 the idea of getting more Aus- nuation currently before par- more than they would by 2064.

Treasurer Josh Frydenberg says the report – three years in the making – shows the super- otherwise liament and urged Labor to back them. But the Association of Superannuation Funds of Australia is disappointed the commission continues to recommend a “best-in-show” list of funds, believing it risks reducing competition.

The Australian Institute of Superannuation Trustees isn’t pleased with the idea either, saying it would deny default status to 90 per cent of funds.

“A top 10 default list is a blunt mechanism that will be needlessly disruptive,” AIST chief executive Eva Scheerlinck said.