A key Government initiative intended to drive down administration costs to superannuation fund members – Superstream - appears to have fallen well short of its money-saving objective with a succession of superannuation funds claiming that the cost of implementation outweighed any benefits achieved.
The significantly lacklustre success of Superstream has been revealed in answers provided to a Parliamentary committee with the superannuation funds making clear that while some cost-savings have been delivered to members, those savings were not attributable SuperStream.
One of the most recent superannuation entities to drive home this message has been the National Australia Bank (NAB) and MLC-owned NULIS which echoed the sentiments of a number of industry superannuation funds in suggesting SuperStream had been a costly exercise which had yet to deliver the intended the results.
NULIS, which covers the MLC Super Fund (MSF), the MLC Superannuation Fund (MLCSF), the DPM Retirement Service (DPMRS), and the PremiumChoice Retirement Service reflected the broad industry vierw when it stated: "The reduction in cost of transferring funds was offset by the high cost of implementing SuperStream”.
It said that NULIS had “implemented a number of fee reductions over time, which have taken into consideration cost efficiencies from simplification of products, systems and processes”.
The chairman of the House of Representatives Standing Committee on Economics, Liberal backbencher, Tim Wilson, had asked the funds whether “since the introduction of Superstream, which has standardised the transfer of funds, has there been:
a. A reduction in the cost to the fund for transferring funds, and if so, by how much?
b. A reduction in the fees charged to members reflecting any saving, and if so, by how much?”
For its part, major industry superannuation fund Hostplus said it outsourced its administration function and any efficiency gain cost savings were inbuilt into Hostplus’ administration agreement.
“Hostplus is therefore not able to directly attribute the value of cost savings specifically related to the implementation of Superstream. Hostplus does, however, factor in any reduction in costs that can in part be attributable to system processing efficiencies, including the implementation of Superstream, into the pricing of administration agreement renewals,” it said.