Retirement
ISA takes another shot at super reforms, accuses government of favouring big banks
Retirement
ISA takes another shot at super reforms, accuses government of favouring big banks
Just a few days after hitting out at the government’s Your Future, Your Super scheme, ISA is at it again, signalling to the government that it may have a fight on its hands when it comes to this now highly contentious scheme.
ISA takes another shot at super reforms, accuses government of favouring big banks
Just a few days after hitting out at the government’s Your Future, Your Super scheme, ISA is at it again, signalling to the government that it may have a fight on its hands when it comes to this now highly contentious scheme.

In a new statement issued by Industry Super Australia (ISA), the organisation has said that while the scheme had the potential to be “groundbreaking”, it will instead be the government’s “greatest gift to the big banks”.
According to ISA, while Your Future, Your Super certainly was a budding scheme that would have ensured the disgraceful misconduct by super trustees revealed at the banking royal commission could not happen again, it will now allow the big banks and the for-profit super sector to “skim up to $10 billion a year in profit no matter how bad the investment returns”.
“We thought the government had at last focused on reform that put members’ first, but instead they’re planning a feast for the banks and retail funds, and they’ll be dining out on workers’ savings,” said ISA chief executive Bernie Dean.
“The government is making countless dud retail super funds and investments immune from any meaningful performance tests, effectively giving some of the worst-performing financial outfits in Australia a licence to go on fee gouging.”

ISA clarified that under the proposed laws, fees and profits are excluded from the revamped members’ best financial interests test, which reverses the onus of proof if fund expenditure or investments are challenged by regulators.
As such, ISA said, billions in mark-ups that for-profit and bank-run funds pay to other parts of the businesses for services are excluded.
ISA referred to the practice as a “fee gouge” on members’ savings, which could generate up to $10 billion a year in profit.
Instead, the government, ISA argued, wants to install a “regulatory kill switch”, which would allow it to prohibit any super fund investment or expenditure they do not approve of, even if in the best financial interest of members.
“It’s as if the carnage we saw at the royal commission never happened, and instead we’ve got the government letting the foxes into the henhouse,” said Mr Dean.
“No matter how lousy they are, these dud funds will be able to go on creaming $10 billion in profit each year from members, without having to answer how it is in the members’ best financial interests.”
ISA further claimed that retail funds can also effectively bypass much of the requirements of the new laws test by filtering expenditure through the parent company or other arms of the business.
“The government has sided with the banks, and the retirement savings of millions will suffer unless it corrects course or the Parliament steps in,” Mr Dean concluded.
Last week, ISA said that an eye-watering estimated $881 billion in retirement savings belonging to 8.4 million member accounts, or about 47 per cent of the APRA-regulated system, could be exempt from the government’s new Your Future, Your Super performance benchmarks.
“If the government doesn’t apply new performance tests to all super funds and products, millions of Australian workers may never find out that their savings are being eaten away by a dud investment,” Mr Dean said at the time.
About the author

About the author


Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more

Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more

Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more

Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more

Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more

Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more