The Productivity Commission’s draft recommendation for a “best-in-show” shortlist of super funds has been commended as a measure that should help improve the efficiency and performance of the superannuation system.
The commission’s 571-page draft report, released yesterday, included a recommendation whereby up to 10 superannuation products should be presented to all members who are new to the workforce, or do not have a superannuation account, from which they can choose a product.
Members should not be prevented from choosing any other fund, including an SMSF.
The SMSF Association welcomed the key findings and recommendations of the report, which largely focused on improving the efficiency and performance of the default super system for the millions of Australians who are members of large super funds.
“Proposed reforms such as a ‘best-in-show’ shortlist of super funds, employees being allocated a default super fund only once, and preserving choice and competition are worthy ideas that should be considered to improve the competitiveness and efficiency of the super system,” association chief executive John Maroney said.
“These reforms will ensure that members’ interests are placed first and foremost at the heart of our superannuation system that embraces a more modern, flexible workforce.”
Commenting on the report’s questioning of the quality of advice provided to super fund members, Maroney said it reinforced the association’s long-held view that SMSF advice should be provided by specialist professionals who have attained high standards of education and accreditation.
“When SMSFs are recommended, it should be done by specialised SMSF advisers who provide quality and justified advice in the best interests of their clients,” he said.
In addition, it was pleasing the commission found engagement is highest with those who have an SMSF, highlighting the role SMSFs play in encouraging choice and competition in the super system, he noted.
The draft report published findings on SMSF performance, costs, financial advice, limited recourse borrowing arrangements and member engagement.
