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PC models could increase risk of poor super products
The alternative superannuation default models proposed by the Productivity Commission could put consumers at further risk of being sold poor products by banks and other for-profit providers, Industry Super Australia (ISA) believes.
ISA’s chief executive, David Whiteley, said the models ignored the systemic underperformance of funds offered by for-profit providers and increased the ability to sell consumers poor products.
“The draft report does not address the cross-selling of for-profit funds, or the divided interests of bank-owned and for-profit funds to deliver both shareholder profits and member returns,” he said.
“Strong protections are needed for consumers to limit the behaviour of these funds to ensure that member interests are the sole focus.”
Whiteley said a strong default system should protect disengaged workers who did not have the resources or expertise to make informed decisions on where best to place their retirement savings.
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The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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59.27 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
32.82 3 y p.a(%)
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32.44 3 y p.a(%)
5
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32.01 3 y p.a(%)
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