Retail superannuation funds would struggle to be considered for default fund status on a net benefit to members’ basis, according to a new assessment from SuperRatings.
The assessment, issued following last week’s Productivity Commission (PC) draft report on alternative default models named the ten top funds in terms of net benefit to members, all of which were not for profit funds, headed by Australian Super and including Telstra Super.
SuperRatings chief executive, Adam Gee said the outcome suggested retail fund sector might continue to struggle to be named as defaults unless a broader assessment of measures was utilised.
Commenting on the PC interim report and SuperRatings own findings, Gee said that while SuperRatings remained supportive of the PC’s broad intentions, it believed limiting a default list to only 10 funds would result in some outstanding value for money funds missing out on default fund status.
He warned this might then sound the death knell for many of such funds, despite the excellent outcomes they were delivering for members.
Gee said that SuperRatings remained concerned that insurance had been excluded from the assessment criteria being utilised by the PC.
“The exclusion of insurance from the assessment is fraught with danger, given the important role it continues to play within superannuation and the community more broadly,” he said.
“In line with its value assessment of a superannuation fund, SuperRatings continues to believe that a broad assessment of quality is required in order to select a default superannuation fund,” Gee said. “This must include an assessment of a range of underlying metrics in respect of investments, fees, insurance, member servicing/advice, administration and governance, to ensure that every facet of a superannuation fund’s offering can be appropriately interrogated.”