POWERED BY MOMENTUM MEDIA
(December-2003) A new guard in Labor super policy
The Labor party is set to unveil more superannuation policy statements early in the new year — the first setting a national savings goal and the second, a package of measures to achieve this goal.
This follows its release last month of two tranches of its Retirement Incomes Policy.
The first chapter was unveiled at the Association of Superannuation Funds of Australia’s national conference in Brisbane by the then Shadow Treasurer Mark Latham and includes seven specific proposals aimed at simplifying the current super system.
Among these are a call for automatic consolidation of super accounts (using members’ tax file numbers), and requiring all super funds to offer a minimum of five investment choices, follow a standard reporting format and provide a range of pensions and annuities.
Labor also proposes introducing choice-of-fund with appropriate consumer safeguards such as verifiable documentation, anti-coercion measures, clear disclosure of charges and regulation of some fees.
Latham said choice-of-fund would not override industrial agreements or Australian Workplace Agreements and would not apply to small business. Labor also promised to ensure equal rights for same sex couples in super.
The second installment, aimed at boosting the safety of super savings, was unveiled a week later in Melbourne by the then Labor leader Simon Crean and shadow minister for retirement incomes Senator Nick Sherry.
It called for the banning of inducements by financial providers to employers to attract employee super contributions, the regulation of death and disability insurance costs, increasing the powers of the regulators and a crackdown on some fees and commissions with entry and exit fees prohibited and a system of flat fees for advice.
Crean said commissions on superannuation guarantee (SG) contributions would be prohibited when an individual alone joined a fund, but not when individuals joined as a group, subject to strict criteria.
All large and medium funds would have to offer online access to members, trustees would be required to obtain a minimum level of education and the member protection regime threshold would rise from $1000 to $1500.
Not only did Labor propose full compensation in the event of theft and fraud of super, it said it would also extend its compensation provisions to include negligence by trustees, post-retirement annuities and pensions, and unpaid 9 per cent SG when a business failed.
AUTHOR
Zilla Efrat
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