Australia’s current super system is “harming millions of members” through underperforming funds, multiple accounts and excessive fees.
That’s the damning assessment of the Productivity Commission (PC) in a new report containing a number of contentious recommendations, which – if implemented – will see the super industry face yet another upheaval. From forcing long-term underachieving super funds out of the super industry to the creation of a shortlist of funds for new workers to select from, the recommendations could usher in significant change.
Fund members, however, shouldn’t wait for the Government or their fund to act, as there are a number of steps they can take right now to protect their super nest egg and overcome many of the problems highlighted in the PC report.
The Productivity Commission report originally come from a recommendation made in the 2014 Financial System Inquiry. Subsequently, the Federal Government tasked the commission with holding an investigation into Australia’s super system and it has released several reports on its efficiency and competitiveness, and a new model for how new employees are placed into default super funds.
Problems in the super system
The report highlights a number of areas the Productivity Commission believes need addressing to better meet the needs of a “modern workforce and growing pool of retirees”.
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Janine has over 25 years’ experience writing about superannuation, including a decade as Managing Editor of the ASFA’s highly respected industry magazine, SuperFunds. She has worked with a range of super funds and leading institutional investment managers.
Her work has appeared in the Australian Financial Review personal finance section and she has been a regular contributor to Money Management and Financial Planning magazines.
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