PC urged to get politics out of super defaults
The administration of private financial accounts should not be subject to industrial-political intrigue, according to the Institute of Public Affairs (IPA).
The IPA has used its submission to the Productivity Commission (PC) inquiry into alternative default models to strongly criticise the degree to which the superannuation debate has become politicised in Australia.
What is more, it said the PC needed to be aware of the vested interests operating in the debate.
It said that while the current default fund regime tended to benefit industry funds, whatever change now occurred "should not actively seek to benefit or punish any company, group of companies or industry".
"Government should not discriminate between different types of superannuation funds, and competitive tension should be recognised as a positive driver," the submission said.
"If industry superannuation funds do indeed have a lower fund structure than retail funds, this need not change under an alternative default system. In fact the need to compete to retain or improve market share may lower fees further."
"Similarly, the ability to ‘break open' the existing default superannuation monopoly may encourage retail superannuation funds to further lower their own fees to better compete with industry funds," it said.
The submission said the Productivity Commission "should be aware of all vested interests when making its recommendations to government".
The IPA submission ended on the note that the workplace relations system is not the place to decide who manages private retirement savings.
"Superannuation is a financial product and belongs in the financial system. It is not the employer's money. It is not the union's money. It is not the government's money. It is not the superannuation fund's money. It is not the employer association's money. It is not the Fair Work Commission's money. It is the employee's money. All employees should have the freedom to choose their superannuation fund," it said.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
