The Your Future, Your Super legislation should save consumers up to $1.8 billion in fees over the first three years after implementation, according to the Financial Services Council (FSC).
The FSC analysis proved that stapling consumers to a single fund, a change that the FSC had advocated for, would save unnecessary fees which were a result of holding multiple accounts.
FSC’s chief executive, Sally Loane, said the super industry could only justify calls to increase the super guarantee to 12% if the system became more efficient and the Your Future, Your Super reforms had weaknesses around the design of the new benchmarking methodology.
“To be clear, the FSC supports weeding out underperforming funds. Duds need to go, we don’t care if they are run by a profit-making company or a trade union and employer group,” she said.
“However, we want to see some changes to the design of performance benchmarks. The custodians of our superannuation system are responsible for investing $3 trillion in savings and small changes in trustee decision-making can have major ramifications for the allocation of capital in the Australian economy.
“The FSC is also concerned that while funds have been required to set CPI-linked [consumer price index] investment return targets, and have measured themselves against these targets in Government mandated dashboards, they will now be retrospectively assessed against a new benchmark.”