The Industry Super Network (ISN) has welcomed the release today of the final report of the Cooper Review which is designed to protect and enhance the super savings of millions of Australians.
ISN Chief Economist, Dr Sacha Vidler, said the final review contains a range of important recommendations which are essential to deliver the best possible retirement outcomes for workers.
“Industry Super Funds have since their inception offered low cost commission free superannuation to Australian workers. It is now apparent the review has proposed a regulatory framework for super that industry super funds members have enjoyed for years,” Dr Vidler said.
The reforms proposed by the review are comprehensive and if adopted by Government will prevent billions of dollars in unnecessary costs being lost from the system. This is especially important in light of the proposed increases in contributions announced by the Government as part of its tax reform package.”
The key recommendations welcomed by the industry super funds include:
Default funds – ‘MySuper’
- introducing a new product type “My Super” for the bulk of members (including disengaged members) that optimises and protects their retirement savings by ensuring these products meet a range of objective criteria.
Commissions and advice
- banning commissions on superannuation, including on insurance;
- an end to bundling of advice with superannuation, including the requirement for members to renew annually their approval for any advice provided with their superannuation; and
- recognition of the increasing role of intrafund advice to efficiently satisfy the bulk of members’ advice needs throughout accumulation and retirement phases.
Administration & Disclosure
- ensuring the data super funds receive will be accurate – by requiring employers to provide accurate information along with their SG contributions;
- enabling funds to track members using the TFN as a unique identifier;
- providing a model for reducing multiple accounts by requiring funds to validate a TFN with the ATO and the ATO to check for existing lost accounts on that TFN;
- licensing and regulation of administrators, SMSF auditors and clearing houses; and
- increasing scope for APRA to determine consistent performance reporting standards of return and risk, and to provide performance data on MySuper options as well as whole of fund.
“The comprehensive nature of the review and its recommendations will mean ongoing industry involvement will be essential to ensure reforms can be implemented smoothly and to prevent any unintended outcomes,” Dr Vidler concluded.