Labor outlines superannuation manifesto

By Freya Purnell

The Federal Opposition has signalled it will introduce sweeping changes to make superannuation simpler and safer to achieve higher retirement incomes for Australians if voted in at the upcoming Federal election.

The Shadow Minister for Retirement Incomes and Savings Senator Nick Sherry in an address at the Investment and Financial Services Association conference last week outlined a number of key super changes Labor would look to introduce.

These include a revamp of exit fees, overriding state industrial agreements currently being used to limit choice of fund, and a crack down on low cost ‘honeymoon’ products. He also said a number of other changes would be announced once the election campaign is underway.

“We’re looking at a system for the next 20 years, not the next two years,” Sherry said.

Sherry also reiterated Labor’s commitment to automatic consolidation of lost super accounts, saying at present there was “structural failure” in this area with “no practical solutions” on offer.

He also announced the implementation of a “universal forecast” that would be conducted every five years and indicate current levels of retirement savings and projected needs.

On the superannuation safety side, he said Labor promised compensation of 100 per cent for theft and fraud, and added this would be extended to cases of trustee negligence.

And while Sherry says Labor was generally supportive of consumer education on super, this should not replace the need for stronger safeguards.

“I’m very sceptical about whether we can succeed in educating Australians in financial matters,” he said.

He said there was a need to be realistic about how much people can be educated, particularly in the context of choice of fund.