Retirement
Industry super funds pitch their own performance benchmarks to government
Retirement
Industry super funds pitch their own performance benchmarks to government
Several large industry super funds have written to the government to discourage it from enacting its newly proposed performance benchmarks, which they argue counters “the fundamental purpose” of superannuation.
Industry super funds pitch their own performance benchmarks to government
Several large industry super funds have written to the government to discourage it from enacting its newly proposed performance benchmarks, which they argue counters “the fundamental purpose” of superannuation.
Investment committee chairs from Cbus, HESTA, QSuper, Rest and SunSuper have addressed a letter to Treasury as the government opens its proposed super performance benchmarks to discussion.
Arguing against the government’s proposed changes and pinpointing a number of issues, the super funds also propose their own solution, suggesting a “two-stage” approach for assessment with a panel comprised of experienced industry professionals, who are collectively impartial.
According to the chairs, the fundamental issue with the proposed performance test is that it “is unable to distinguish poorly performing funds (say, because of high fees and bad management on the one hand, or just by the unpredictable nature of markets on the other) from better-performing funds.”
“It also does not distinguish underperformance as a result of risk mitigation versus underperformance as a result of endemic problems within the fund,” the chairs noted.
“It is neither right nor sensible to adversely penalise a fund (and particularly its members) who have underperformed an arbitrary benchmark largely due to the capricious nature of markets, or because of their deliberate risk management strategies,” they added.
Instead, the fund chairs opined that their “two-stage” process could plug all the inconsistencies identified in the government’s original proposal.
“We wish to make it quite clear that our proposal for a two-hurdle approach is not to evade clear accountability. We believe that poor-performing funds that do not meet their promise to members should not be entitled to receive funds flow from a government-mandated system.
“Indeed, the second hurdle will be particularly imposing for those funds that are called before the panel. No fund would want to get into that position,” the chairs noted.
The annual performance test is part of the government’s Your Future, Your Super Bill, which Treasurer Josh Frydenberg believes will make the super system “better for members” in four key ways – preventing the creation of unintended multiple super accounts, helping members choose well-performing products that meet their needs, holding funds to account for underperformance and increasing transparency and accountability.
RELATED ARTICLES
About the author
About the author
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
