Underperforming MySuper products costing millions in retirement

mysuper/super-consumers-Australia/Choice/superannuation/

25 September 2019
| By Chris Dastoor |
image
image
expand image

Research from Super Consumers Australia, the consumer research group backed by Choice, shows the superannuation system put over 176,000 people into a poor performing MySuper product in 2017-18 costing up to half a million dollars in retirement.

Those accounts were put into MySuper products in the bottom 25% of performers, which joined over one million total accounts held in those same MySuper products.

The Productivity Commission (PC) had concluded there was chronic underperformance of MySuper products and a person unlucky enough to be defaulted into one of these would be $502,000 worse off by the time they retired.

Super Consumers Australia has urged the Federal Government to take on the PC and Royal Commission reports to end the creation of duplicate accounts and ensure people are defaulted into the best performing funds.

Xavier O’Hallaron, Super Consumers Australia acting director, said these superannuation “laggards” continue to attract tens of thousands of new members each year through badly designed default system.

“What’s worse is that we know the industry is resisting changes which would ensure people end up in better performing products,” O’Hallaron said.

“The Productivity Commission proposed a suite of options, including ‘best in show’, which would have the immediate effect of stopping more people’s retirement savings ending up with products that would cost them in retirement.”

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS