The Federal Government has reinforced its hardline approach to superannuation fund performance and fees with the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, claiming inefficiencies have resulted in Australians paying $30 billion a year in super fees.
Addressing an Australian Shareholders Association Investor Conference, Hume claimed the Government’s recent reforms and those announced in the Budget were intended to make superannuation work harder for members.
“As shareholders, you’re familiar and know the scrutiny and performance standards you place on the businesses in which you invest,” she said. “Why should Australians expect anything less from those who manage their hard-earned retirement savings?”
“Australia’s superannuation system is the fourth largest in the world, managing $3 trillion in retirement savings for 16 million Australians. In fact, there are enough savings in our superannuation system to buy every company listed on the Australian Securities Exchange – one and a half times over.
“While many Australians have benefitted greatly from the system and been provided a higher standard of living in retirement, widespread underperformance, complex arrangements, and a lack of transparency have undermined outcomes for too many,” Hume said.
“As the Productivity Commission identified in its inquiry into superannuation, structural flaws in the system are resulting in lower retirement balances for millions of members. For too long, superannuation fund members have not been able to get clear answers to some very simple questions:
- How is my super fund performing?
- Where is my money being invested and how is it being spent?”
“They are questions that deserve answers. Inefficiencies in the superannuation system have resulted in Australians paying $30 billion per year in fees,” Hume said. “In comparison, Australian households pay $27 billion on their energy bills.
“The inefficient design of default arrangements also means members can fall victim to what the Productivity Commission described as the ‘unlucky lottery’ in which they may be placed into underperforming products.
“Disengagement means often people languish in a ‘dud’ fund for years at enormous to their retirement outcomes. Further, there are currently 6 million unintended multiple accounts within the system that are unnecessarily draining the superannuation savings of 4.4 million Australians.
“We can do better than this.”