Democrats out of the blocks with super

The Australian Democrats have moved quickly to outline elements of their superannuation policy ahead of next month’s Federal election by announcing a five point plan which they say will ensure consumers pay low fees and charges.

At the same time, the Democrats are refusing to rule out banning commissions on compulsory superannuation guarantee contributions if it is shown financial advisers are not acting in the best interests of their clients.

Integral to the Democrats proposal is close monitoring of superannuation fees and charges by the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.

Democrats spokesman on Superannuation Senator John Cherry says as part of the Democrats negotiations with the Government to provide employees with choice of superannuation fund, the Government committed that the regulatory watchdogs will monitor and report on super fees and charges for at least the next five years.

Senator Cherry pointed to the fact that, since then, some the larger financial institutions had announced a reduction in their fees.

He says the Democrats will:

* lobby for ASIC to develop a five star rating for superannuation and investment products based on their level of fees. A one-star rating could be a high fee product, a five-star could be given to an extremely low fee product;

* ensure that monitoring and reporting of super fees and changes is comprehensive;

* push for the comprehensive benchmarking of fees and charges across the various superannuation products and investment choices;

* monitor the impact of choice on the superannuation industry. They do not rule out the banning of commissions on compulsory Superannuation Guarantee contributions if it is shown that the financial advisers are not acting in the best interests of their clients; and

* push for a Government review of the administration and compliance costs incurred by superannuation funds. We will be critical of any unnecessary burdens on the industry such as further excessive 'safety' or prudential requirements.