While there is a possible danger of members remaining in poorly-performing super funds, this is the better option than them accumulating multiple accounts and paying multiple fees.
That is the bottom line from the Grattan Institute on the ‘stapling’ changes to superannuation which were announced in this week’s Budget.
Treasurer Josh Frydenberg announced super members would be ‘stapled’ to a super fund to avoid people accumulating multiple super fund accounts when they changed jobs.
However, superannuation executives were concerned millions would be left stapled to an underperforming fund for their working lives and relying on disclosure to establish if that fund was an underperformer.
Speaking to Money Management, Danielle Wood, chief executive of the Grattan Institute, acknowledged people may hold off from proactively moving out of a poor performer but it was unlikely to happen.
“There is a danger but it is the lesser of two evils compared to people having multiple super funds and paying multiple fees on them.
“It is always hard to change things but, on balance, this will lead to better outcomes,” she said.
“People tend to start off their careers in a big fund that performs better so it is unlikely people will be stuck in a bad performer.”
Senior superannuation industry executives have already suggested super funds which cover young people early on their careers such as REST and HostPlus stood to benefit from the stapling changes.
