There have been mixed reactions to the Labor Party’s recent release of the first two installments of its Retirement Incomes Savings Policy.
The Federal Government accused Labor of pilfering its superannuation policies. Assistant Treasurer, Senator Helen Coonan, claimed that Labor had “borrowed heavily” from the Government’s approach to choice-of-fund and the consolidation of superannuation accounts.
The “carve out” of those working for small business represents “outrageous discrimination”, she said, adding that Labor’s plan would burden Australian business with more red tape, more prescription and more regulation without any real benefit.
“It’s difficult to see Labor’s point when so much detail is lacking, but what is evidently clear is Labor’s recipe for Australia’s super system is regulation, regulation, regulation.”
The Association of Superannuation Funds of Australia (ASFA), however, described Labor’s safety proposals as “long on good intentions but short on detail and practicality, and occasionally misdirected”.
ASFA director of policy and research Michaela Anderson approved of Labor’s commitments to better and standardised disclosure on super fees and charges, adequate resourcing for the regulators and ensuring that trustees were competent and knowledgeable.
“But some of the proposals are disappointing in that they lack a clear articulation of how they will be implemented. At face value, there may be legal or practical difficulties with one or two of the proposals, so more detail of how they will operate is needed.”
The Australian Institute Of Superannation Trustees (AIST) claimed that members of super funds would come out ahead if Labor’s proposals were adopted.
AIST president Susan Ryan described Labor’s policies to simplify super as sensible. “Automatic consolidation of super as a worker moves round the workforce would reduce member fees and reduce the amount of lost super,” she said.
“Labor’s requirement that all funds offer retiring members the choice of a pension or an annuity, as an alternative to a lump sum, makes sense and would be of great assistance to many retirees who have difficulty managing their retirement savings.”
Investment and Financial Services Association CEO Richard Gilbert welcomed Labor’s support for the concept of choice and remained hopeful that the major parties could come to the table and negotiate a choice regime for the benefit of all Australians saving for their retirement.
He added: “Labor’s focus on improved consumer education is also welcomed, as it is clear there is an increasing demand on the part of Australian consumers to demystify some of the terms and jargon used throughout the financial services industry. We look forward to the release by both major parties of a benchmark for adequate retirement income in the run up to election 2004.”
