Australians spent over $31 billion annually in fees to superannuation funds. Tax concessions on super contributions are established at$16.5 billion. The public holds $2.8 trillion in superannuation assets.
It is critical that we get this right.
Self-sufficiency in retirement has been a shared vision for both parties for generations.
Self-sufficiency requires choice. Choice should extend to the management of your retirement funds. Superannuation funds should be managed for the sole purpose of providing for your retirement. Unfortunately, this does not describe our present reality. Large superannuation funds charge billions in fees and apply funds for purposes such as advertising, political donations, directors’ fees, and payments to trade unions.
Superannuation funds must be made to work harder for their members. This means recalibrating the scheme to provide members with flexibility and autonomy.
Why do we have superannuation? What is it supposed to do? How is the scheme working? How can it be fixed?
Answering these questions is a big part of why I wrote the book: Bad Egg, How to Fix Super.
In taking a granular examination of superannuation, I came up with a series of concrete proposals to improve the current system:
- Establishing a default national superannuation fund administered by the government and invested by the Future Fund.
- The sole purpose test, which requires superannuation to be managed for the sole purpose of benefitting members in retirement, should be applied more rigorously and restrain funds from spending money on advertising, lobbying, and political donations.
As a member of the Senate Economics Committee I have taken regulators to task on these issues.
- Receiving precise figures from Treasury on about the total cost of fees to members of the superannuation system.
- Campaigning against erroneous calculations used as a form of self-promotion by industry super funds.
- Getting answers from APRA on weather enforcement action will be pursued in respect of super fund advertising.
- Following up ASIC on law enforcement practices.
I have worked closely on several major legislative reforms aimed at getting a better deal for members.
The Your Future, Your Super reform package will save Australians $17.9 billion over 10 years.
This is achieved by correcting unnecessary duplication, strengthening consumer standards, and empowering employees to select their existing fund rather than relying on default funds. Workers will also be able to access clearer information and comparison tools to aid them in choosing a fund.
- Superannuation funds will also be subjected to annual performance tests.
- Super trustees will be required to act in the best financial interests of members.
Please See Media Coverage on Bad Egg: How to Fix Super below
3AW interview with Heidi Murphy here.
Sky News interview with Keiran Gilbert here.
2GB interview with Ben Fordham here.
ABC interview with James Valentine here.
News journalist Samantha Maiden's story here.