Industry Super Australia has called on the Senate to agree to amendments in the Your Future, Your Super bill to prevent workers being trapped in underperforming products.
It wants workers to only be stapled to those funds which have passed a performance test as up to 2.6 million workers were invested in funds that could fail a performance test, it said.
Remaining stapled to an underperforming fund for their lifetime could cost up to $230,000 in lost savings.
It also said $500 billion would be ‘shielded’ from performance tests as they sat in the for-profit fund-dominated ‘Choice’ sector which had been found to be ‘littered with high-fee charging duds’ but was excluded from the YFYS performance tests.
ISA urged the Government to pursue amendments in:
- Expanding performance tests to all fees and products;
- Mandating members can only be stapled to super funds that pass the performance test; and
- Ensuring best financial interests duties also applies to the up to $10 billion a year profit creamed off the top of members’ savings.
Bernie Dean, ISA chief executive, said: “Senators know full well that most people don’t spend a lot of time thinking about super and deserve to be protected from ending up chained to a dud fund.
“The Senate can boost members savings and stop them ending up with too many super accounts by simply mandating workers can only be stapled to the best-performing funds.”