Retirement
Financial sector freedom integral to creation of new super body
A superannuation industry group is advocating for the creation of a “truly independent” consumer advocacy body for superannuation in Australia.
Financial sector freedom integral to creation of new super body
A superannuation industry group is advocating for the creation of a “truly independent” consumer advocacy body for superannuation in Australia.
In a written submission in response to the Retirement Income Review currently being carried out by the Treasury, the Australian Institute of Superannuation Trustees (AIST) has indicated its support for measures that “better enable members to navigate the superannuation system and provide additional member input into policy discussions”.
It argued that such an advocacy body “must operate in a way that is truly independent and justly represents all consumers, including vulnerable Australians”.
AIST tempered such a stance by highlighting it as being “worth noting that in contrast with other industries, the best interests of superannuation members must already be prioritised by superannuation funds”.
It did concede, however, that as highlighted by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, “an inherent conflict exists between the commercial interests of ‘for-profit’ superannuation funds and a trustee’s obligations to give priority to duties to, and interests of, the beneficiaries”.
In supporting the creation of a consumer-led advocacy body, the AIST provided a number of recommendations for the structure and management of such an organisation, stating that it should be a semi-government body that acts independently and free of allegiance with, or reliance on, the financial service sector.
As a result, the AIST expressed that it should also exhibit financial freedom from the sector, with the group’s board and committee comprising of experts from outside the financial services sector.
It then called for the new body to be accountable, “preferably to the same body as financial services regulators, and to Parliament by way of regular committee hearings”.
Noting the creation of an advocacy group being a recommendation of the Productivity Commission, the AIST argued that this body “should operate in a way that provides services not currently available to Australian superannuation fund members in order to continue to serve their best interests” in its submission.
“The body should be structured in a way that uses expert knowledge to target both vulnerable and young Australians to increase [engagement with superannuation and education around financial literacy] through programs, campaigns and initiatives.”
“These actions should offer a unique approach in targeting these Australians to increase their knowledge and interest in superannuation,” it offered.
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