Super reforms will save consumers money: FSC

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.

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“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.”

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