Retirement
Australians need power to choose super
A loss of choice around super funds affecting around one million Australians has been blasted by a financial services advocacy group.
Australians need power to choose super
A loss of choice around super funds affecting around one million Australians has been blasted by a financial services advocacy group.
The Financial Services Council (FSC) has urged the Senate Economics Committee to allow Australians the choice of super fund as part of reforms to the Treasury Laws Amendment (Your Superannuation Your Choice) Bill 2019.
The organisation has been a vocal advocate for removing restrictions on choice in superannuation, according to CEO Sally Loane.
She noted that “up to one million Australians currently do not have the option to have superannuation payments made into a fund of their choosing”.
The submission to the Senate Economics Committee outlined that there are “no clear reasons why the group without choice cannot exercise the rights that the remainder of Australians can exercise”.
With “no justification for preventing them from choosing a superannuation fund”, Ms Loane said some of these people will be locked into a poorly performing fund simply because of where they work.
“Others will be forced to hold multiple accounts, and have their balances eroded by duplicate fees,” she continued.
The CEO considered that a compulsory superannuation system “should not create situations where members are required to go to these lengths to work around outdated policy settings and manage their own money”.
According to the submission, the absence of choice related to super fund creates particular problems for individuals who utilise an SMSF or investor-directed product, make specific investment choices in their existing fund, have chosen insurance levels either above or below default levels, have made death benefit nominations, or prefer their existing fund for a particular fund.
Despite the stance, she acknowledged the FSC does know that “most Australians don’t engage with their superannuation and will remain with their default fund”.
Where this is the case, Ms Loane called for more reforms to ensure all Australians are defaulted once into high-quality default fund.
But “for those individuals who want to choose, they should have the freedom to manage their superannuation as they wish”, she concluded.
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