New calls for greater standardisation in super

There is a strong need for standardisation across asset allocation and fund descriptors as part of the broader task of defining the purpose of superannuation, according to the Institute of Public Accountants (IPA).

The IPA has used its submission to the Productivity Commission inquiry into the competitiveness and efficiency of the superannuation system to point to disparate descriptors and terminology currently prevalent in the superannuation industry.

The IPA submission said that one of the main issues needing to be resolved at fund level was "the wide variety and lack of standardization in asset allocations even among similarly described diversified funds".

"The Institute of Public Accountants believes that greater standardisation and uniformity of products, particularly within the default market, is likely to facilitate greater competition and therefore efficiency," the submission said.

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It went on to suggest that the "introduction of a more homogeneous or standardised product and greater transparency of performance indicators" might be relatively easily addressed and would "enable members to more effectively compare funds and choose an offering that best suits their needs".

"This should result in a simpler and easier to understand super system, reduced fees, better risk adjusted returns, a better service offering and more innovative products particularly at the pension phase," the submission said.