The majority of Australians only have a vague knowledge of the Your Future, Your Super stapling measures and this lack of engagement could lose them thousands in retirement.
A survey of over 1,000 respondents by Industry Super Australia (ISA) found only 38% were unaware of any changes and 42% only had a vague understanding of the reforms. Only 20% said they knew what the changes were.
Almost three-quarters of respondents were unaware of the term ‘stapling’ in relation to superannuation. The change, which would see a member stapled to a particular super fund for their career came into force this week.
This was concerning, ISA said, as it could mean people were unaware that they could be stuck in an underperforming fund which cost equate to losses of thousands of dollars in retirement. They could also be stuck in a fund which had failed the Your Future, Your Super performance test unless they chose to switch super fund.
ISA recommended super members should only be stapled to those funds which had passed the performance test, a view backed up by 70% of survey respondents.
ISA chief executive, Bernie Dean, said: “Being stuck to a dud fund could punch a huge hole in a person’s nest egg, and that is going to limit how much they enjoy life in retirement – people should make sure they are with a good fund.
“Given the risks to so many people’s livelihoods the government needs to tighten up protections to make sure people are only stapled to the best funds that have passed the performance tests.”