MySuper encourages member disengagement - CSSA
The Government's Stronger Super package released this week is encouraging people to disengage with their super and fails to recognise the low-cost superannuation plans already on offer, according to Corporate Super Specialist Alliance (CSSA).
CSSA president Douglas Latto said the 'one size fits all' approach of MySuper "unnecessarily dumbs down" superannuation and does not provide an opportunity for investors to pursue a higher performing investment outcome.
"The government's socialist approach to superannuation may lead people to think they don't need to take any personal responsibility for funding their retirement lifestyle," Latto said.
"It is a short-sighted approach which will almost certainly result in an unnecessary increase in Centrelink payments to retirees, which will ultimately cost our economy more."
Latto said the government's super reforms fail to provide investors with proper education on the benefits of additional contributions. He also believes that members of super funds with low account balances should not be forced to move to more expensive MySuper accounts.
CSSA is concerned that members who are forced by the government to leave their low-fee corporate super plans will lose the insurance policies they already hold and push up the cost of insurance policies for remaining members.
"That's obviously a poor outcome for those who stay, as well as for those who go," Latto said.
According to Latto, MySuper members may also lose access to "highly valued" corporate superannuation specialist advisers because of an insufficient pay structure.
"Legislating compulsory changes to fix something that is not broken seems like a total waste, particularly when MySuper could disadvantage rather benefit millions of working Australians," Latto said.
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