The Federal Government has signalled its intention to ensure that default superannuation is broken away from the industrial relations agreements.
The Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume has told a superannuation forum that Australia’s superannuation system had matured to a stage where it no longer needed “the coddling of the industrial relations system”.
“… as a universal coverage system, those who gave birth to it can be proud of its origins as a workplace entitlement,” Hume said. “But like many parents who have a 28-year-old still living at home can attest, it has developed some strange habits and the odd hang-up. Like multiple accounts. Like complexity and opacity. Like high fees. Like underperformance without accountability and a bad sense of entitlement.”
“If we are to address these bad habits of our superannuation system, it’s time for the child to grow up and leave home. The retirement savings system no longer needs the coddling of the industrial relations system,” she said. “It’s $3 trillion dollars. It’s bigger than the ASX [Australian Securities Exchange]. It’s bigger than Australia’s GDP [gross domestic product]. It’s big enough to stand on its own two feet.”
Hume said that while payment of superannuation savings was just as much a workplace entitlement, as the payment of wages, choice of superannuation fund should not be dictated by a person’s workplace.
“So while I’m not going to say where the Government will land on the question of default fund choice, stapled accounts, best-in-show and all the various other models out there, I will venture to suggest we won’t get to our desired destination of an efficient, single default while the superannuation child is still living at home,” she said. “In two years’ time our compulsory super system turns 30. It’s time it grew up.”