NEWS THAT MATTERS
under government’s super change
Last week’s release of APRA’s first assessment of superannuation funds investment performance confirms the strength of Australia’s world class system.
7 September 2021
A HEALTHY 93 per cent of Australians are in funds that passed the test, meaning their super investments are bringing strong returns for their retirement.
The bad news is around one million accounts are in underperforming funds that have failed the test.
These Australians deserve better.
These account holders will now receive a letter giving them that news, and then recommending they switch funds.
This could create a run on funds and a disorderly transition of those accounts into better performing funds, as the * Productivity Commission warned in 2018. (www.pc.gov.au/inquiries/completed/superannuation/assessment/report/superannuation-assessment-overview.pdf)
The Morrison Government has failed to heed that warning and has no plan to provide certainty and security for workers with underperforming accounts.
Furthermore, there are millions more accounts in underperforming “choice” funds that APRA has not been asked to assess.
The Morrison Government inexplicably excluded them despite the * Productivity Commission findings (www.pc.gov.au/inquiries/completed/superannuation/assessment/report/superannuation-assessment-overview.pdf) that choice funds produced some of the most egregious underperformance in the industry.
The Productivity Commissiuon found a “tail” of 4 million accounts and $275 billion of funds under management in high-fee, low return choice products.
There should be a focus on improving the performance of all super funds and the Morrison Government needs to * extend assessments to every APRA-regulated fund, including choice products. (www.stephenjones.org.au/media-centre/speeches/address-to-the-australian-institute-of-superannuation-trustees-conference/)
It is disappointing these warnings have been ignored by a Government that’s always focussed on the announcement and never the follow through.
Grapevine News Online
Central Coast NSW
SUBSCRIBE FOR FREE to the Grapevine News Online and to the monthly e-book edition of the Grapevine Community News. You will receive an email notification every time a news story goes live, keeping you up to date with what is happening in your community.
Our online news update and monthly newspaper is about real local news and events. We will not spam you or share your details with third parties.