Your home for profit-to-member Super
Join the leading voice in profit-to-member super
Our full list of member super funds
View the upcoming courses in your city
AIST's flagship educational program
Explore the history, rules and regulations of superannuation and how it fits into Australia’s economic landscape – and become RG146 compliant.
Listing of all upcoming events
The premier idea sharing and networking event for Australia’s $1.5 trillion profit-to-member super sector
AIST's annual Superannuation Investment conference
Research, insights and advocacy on the most pressing topics in super
Our response to changes in the political and policy environment
From AIST's governance code to practical guidance and toolkits
Industry news, latest resources and event updates
Stay connected to the latest policy news
Photo, audio and video content
Our mission, vision and values
Meet our team
Our board of directors, constitution and committees
News, insights and resources as they unfold.
Stay up-to-date with the issues affecting super.
The Morrison Government’s proposed new super laws fail to adequately address underperformance in the super system and could lead to adverse member outcomes, the Australian Institute of Superannuation Trustees (AIST) warned today.
Releasing AIST’s submission response to the Your Future, Your Super legislation, AIST CEO Eva Scheerlinck said while AIST strongly supported the policy intent of the legislation to empower members and hold funds to account for their performance, this would not be achieved without substantive changes to the legislation and additional measures.
Currently in draft form, the proposed legislation requires only some products to undergo performance testing leaving many very poor performing funds without the same level of scrutiny. It also ignores Productivity Commission recommendations to allow the regulator to wind up underperforming funds.
Ms Scheerlinck said existing members of persistently underperforming super funds were most at risk.
“The new laws will see many disengaged members stapled to dud super products where they could languish for years,” Ms Scheerlinck said. “The priorities of this legislation are the wrong way around. Underperformance in our super system must be substantially addressed before any stapling occurs.”
While not intending to downplay the importance of reducing unintended multiple accounts, a SuperRatings analysis in AIST’s submission highlights the importance of addressing super underperformance before stapling begins. Using a hypothetical member with a salary of $73,000 and a super balance of $140,000, the research showed that, after seven years, the member was nearly 40 per cent (or $34,200) better off being in several large high-performing default funds than stapled to one poorer performing fund.
Ms Scheerlinck said the Government’s reliance on consumer disclosure as the primary means to get people to switch out of underperforming super products was another concern.
“When it comes to complex financial products such as superannuation, the Productivity Commission, ASIC and the Hayne Royal Commission have all previously warned about the dangers of relying heavily on disclosure to improve consumer outcomes,” Ms Scheerlinck said. “Rather than putting the onus on individuals to take action on their fund’s underperformance, as per the Productivity Commission’s recommendation the Government needs to give the regulator the power to transfer existing members of all underperforming products to better products.”
Media enquiries: AIST Senior Media Manager, Janet de Silva 0448 000 499.
AIST is the peak body for the $1.4 trillion profit-to-member superannuation sector
07 January 2021