PC models could increase risk of poor super products

The alternative superannuation default models proposed by the Productivity Commission could put consumers at further risk of being sold poor products by banks and other for-profit providers, Industry Super Australia (ISA) believes.

ISA’s chief executive, David Whiteley, said the models ignored the systemic underperformance of funds offered by for-profit providers and increased the ability to sell consumers poor products.

“The draft report does not address the cross-selling of for-profit funds, or the divided interests of bank-owned and for-profit funds to deliver both shareholder profits and member returns,” he said.

Related News:

“Strong protections are needed for consumers to limit the behaviour of these funds to ensure that member interests are the sole focus.”

Whiteley said a strong default system should protect disengaged workers who did not have the resources or expertise to make informed decisions on where best to place their retirement savings.

Related Content

Super returns defy volatility

Superannuation fund returns edged back into positive territory in February despite share market volatility, according to the latest data from speciali...more

LGIAsuper mandate ensures JP Morgan stays on top

LGIAsuper has renewed its partnership with JP Morgan, providing a major mandate for the custodian that should cement its position as the Australian cu...more

Capturing the SG in the gig economy

Having superannuation attaching to work performed rather than employment may be the answer to dealing with the so-called ‘gig economy’, according ...more



Add new comment