The Association of Independent Retirees (AIR) has welcomed the implementation of the Your Future, Your Super legislation due to the ability of the new rules to produce better outcomes for superannuants and the retirement savings system in general.
Specifically, the consumer group suggested the new laws would improve the accountability of super fund trustees, enhance the efficiency of the system, boost investment performance and reduce member fees.
“The superannuation reforms [will] increase accountability by compelling superannuation trustees to act in the best financial interests of their members and increase transparency with better information about how they managed and spent members’ retirement savings during the previous year,” AIR president Wayne Strandquist said.
The obligation for super fund trustees to act in the best financial interest of members also applies to SMSFs.
According to Strandquist, efficiency gains will be made by eradicating the situation where individuals end up having multiple retirement savings accounts.
“The new legislation also ensures that a new super account is not automatically created each time a worker changes their employer. Your super account will follow you (also called stapling) thus preventing the creation of unintended multiple super accounts with duplicate fees and insurance premiums,” he said.
“With approximately 6 million multiple super accounts in the system and about 850,000 created every year, this reform is most welcome.”
The consumer body also recognised compulsory fund comparisons under the law would facilitate better performance for members.
“The Your Super comparison tool will enable super fund members to compare the investment performance and costs of their fund and switch to a better-performing fund if appropriate,” Standquist said.
“Super funds will be benchmarked via an annual performance test including fees. If a fund fails the test, members of the fund must be informed. APRA (Australian Prudential Regulation Authority) will have the ability to prevent persistently underperforming super products from taking on new members.”
