Industry Super Australia (ISA) has welcomed the Government’s commitment to implementing the Royal Commission recommendations, but say they need to remain focused on other reforms, particularly underperformance of funds and unpaid super.
Bernie Dean, ISA chief executive, said the Government had set out an ambitious legislative timetable to deliver important consumer protections.
These included annual renewals for ongoing free arrangements, introduction of a new disciplinary system for financial advisers and bans on ‘hawking’ of super products.
“The Royal Commission did a very good job of identifying where the problems and misconduct were – now the Government must get on and fix them,” Dean said.
“We welcome the Government’s commitment and the ambitious reform progrsam they have set out and we stand ready to work with them as they implement these important protections for consumers.
“While this important work is underway, we urge the Government not to lose sight of the other challenges such as chronic underperformance and the fact that one in three workers are not even getting paid super.”
The issue of ‘stapling’ a default superannuation account to individuals would be dealt with as part of the Government’s response and the ISA stated they were keen to work with the Government on the issue.
Industry super funds preferred model would be to automatically combine individual super accounts each time there is a job change, into a single quality checked account.
Analysis from KPMG found it would deliver $416 billion in performance dividends to members and eliminate multiple accounts, adding an estimated $200,000 more in super over an individual’s working life.