Reforming the superannuation system to ensure it worked harder for all Australians was a key focus for the Morrison Federal Government.
Addressing the Ipswich Chamber of Commerce breakfast this week, Minister for Superannuation, Financial Services and the Digital Economy and Minister for Women’s Economic Security, Senator Jane Hume, said superannuation needed overhauling to cut waste, hold underperforming funds to account and strengthen protections for the retirement savings of millions of Australians.
The 100-plus attendees heard Australians were paying $30 billion in super fees each year and 3 million Australians had funds in “under-performing” funds.
Locally-based Sen Paul Scarr said it was great to have Sen Hume visit Queensland’s fastest-growing region to hear firsthand the issues in high-growth suburbs with workers and young families.
Sen Hume said the Your Future, Your Super reforms, scheduled to start 1 July, were aimed at saving Australian workers $17.9 billion over 10 years.
“Not all super funds are managing members’ funds as well as they could. This is money held in trust, and fund managers and practices need closer scrutiny,” Sen Hume said.
Under the Morrison Government’s reforms super would follow workers around. Every worker would have a “stapled fund” – with “tie-breaker” rules for determining which fund was to be an employee’s stapled fund where they had multiple existing funds.
Sen Hume said the reform package built on the Morrison Government’s legislated superannuation changes which include consolidating 3.3 million unintended multiple accounts worth $4.3 billion, capping fees on low-balance accounts, banning exit fees and ensuring younger Australians did not pay unnecessary insurance premiums.
To bring Australia’s $3 trillion superannuation industry into the 21st Century, individual funds needed far greater scrutiny on their performance, what fees they charged members and other areas of spending, including sponsorships using members’ funds.
Sen Hume questioned the merits of funds sponsoring football teams and sports stadiums. She said reforms would include stronger methodology for the annual performance test, as well as requirements for notifications to members.
With too many super funds failing the performance test, funds would be ranked by YourSuper comparison tool online with better disclosure to members of portfolio holdings.
“These changes will bring Australia’s superannuation industry into line with global best practice,” she said.
