Cheaper industry fund MySuper claims queried
The Corporate Superannuation Specialists Association (CSSA) has taken issue with the outcome of SuperRatings research into MySuper products which suggested that those established by industry superannuation funds are not only cheaper but that the industry funds will be faster in transitioning members to the new arrangements.
CSSA president Douglas Latto said the SuperRatings analysis had failed to sufficiently identify the fact that in most instances industry funds had simply modeled their new MySuper offerings on their existing default funds - something which explained their ability to rapidly transition members to the new arrangements.
He said this use of existing default funds needed to be compared to the MySuper products put in place by many of the retail players - which represented new offerings in the market.
Latto said that it was also wrong to base any analysis of the MySuper market on cost in circumstances where the insurance offerings attaching to the products represented a key differentiator, and where people being transitioned to a MySuper product might actually suffer disadvantage with respect to their insurance coverage.
In an analysis of the evolving MySuper fee environment released earlier this week, SuperRatings pointed to average fees in the retail sector dropping from $932 a year to just $593 a year on an account balance of $50,000, but notes that this compares to the not-for-profit funds where the average fee on the same balance would be $498.
Further, SuperRatings chief executive Jeff Bresnahan claimed that retail funds would take the longest to transition members whereas the “great majority” of not-for-profit funds “has indicated that members will be transferred immediately”.
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