spreads (14).gif

New super laws need sensible changes to better protect members

Industry Super Australia say "New super laws need sensible changes to rid the system of underperformers and ensure the disgraceful conduct unearthed by the Royal Commission does not happen again.

"Unamended the Your Future, Your Super Bill lodged in Parliament today, will allow dud for-profit funds to keep underperforming without consequence and ripping more than $10 billion in profit without ever having to justify how its inflated fees are in their best financial interest of members.

"Subject to changes being made to the Bill that will ensure members are better off, Industry Super Australia supports the package of reforms.

"The government’s proposed performance benchmark tests need strengthening and expanding. They must include all fees charged – the government has excluded administration fees from the test, which are far higher in the retail sector and how those funds generate profits for shareholders.

"About 80% of the choice sector will likely be shielded from the performance benchmark tests, despite the Productivity Commission finding this is where most of the dud funds are found. There is also no timeframe to test almost 70% of for-profit funds – that is 6.7 million-member accounts holding $427 billion in assets.

"The regulatory kill switch is unnecessary and an ideological overreach. Reports today suggest extreme elements of the Coalition party room will try and use this power to ban fund ESG investment or vital investments in affordable housing. "An added regulation making power is equally concerning, it appears it would allow the Minister to dictate what is in members' best financial interest giving politicians unfettered control over workers' super.

"Industry Super Australia (ISA) supports sensible changes that are in members' best financial interest"

Ø Net return as a performance benchmark rather than net investment return

Ø Forced closures of chronically underperforming funds

Ø Making sure trustees justify all fees being in members best financial interests, especially those charged by related parties above a cost recovery basis and used to generate profits paid to shareholders

Ø Expanded coverage to mandate that all funds and products – including the Choice sector – must also pass the benchmark tests, with no carve outs

Ø Sequencing of reforms to ensure performance measures are implemented before stapling Australians to one fund for life.

The Industry Super Australia’s submission can be found here:

Industry Super Australia Chief Executive Bernie Dean said "We’re disappointed that sensible feedback from across the sector has been ignored to this point and will further examine the concerning regulation making powers that have been added.”

“Ultimately we’d like to see the Parliament enact changes that will deliver members more.”

“These laws should mean that all funds should have to justify how all fees are in the best financial interest of members, instead there is a giant carve out that will allow retail funds to keep creaming $10 billion each year in profit no matter how poorly they perform.”

COMMENTS : Due to the risks associated with comments from unidentified contributors that expose The Beagle to possible legal actions under the NSW Defamation Act 2005 No 77 anonymous or Nom de Plume comments will not be available

NOTE to those wishing to comment: Tell us your name. First and second name. Make a comment and own it. Have a conversation but let the other person know who you are. No name - no publishing of your comment - simple. 

If you need anonymity email us via our normal or encrypted email accounts. 

Please note that if you are looking for a previous comment that is no longer visible please contact us.