Government should give regulators more teeth on super

While AustralianSuper chief executive Ian Silk welcomed the objectives of the reforms, saying they were “wholly supported by AustralianSuper”, he believes more detail is needed and punishments should be steeper. 

“Much of the detail remains to be revealed in the legislation and in regulations, but from what we have observed through the budget night announcements, there are a number of areas that we would propose to the government – and we’ll seek to do that when the bills are available – to improve the likelihood of those objectives being met,” Mr Silk told the standing committee on economics on Friday. 

“This is not a mealy-mouthed ‘agree in principle’ … we’re looking to raise the bar, not weaken it.”

Mr Silk believes the reforms should apply to all superannuation funds and options, and questioned why they only measured investment fees, calling the decision to exclude administration fees “an oversight”.

“The government has quite rightly said ‘people are interested in what lands in their account’, and what lands in their account is a function of contributions and investment returns, less investment fees and less admin fees,” Mr Silk said. 

“The government’s proposal seems to take out admin fees from the calculation. We say that, self-evidently, it should include all fees, so that’s a really critical change we think should apply.”

Mr Silk also wants the government to beef up penalties for underperformance, saying the current penalties put the responsibility on members to take action to protect their super while doing nothing to help those currently stranded in a dud fund. 

“The onus should be on regulators to get rid of the poor-performing funds,” Mr Silk said.

“There should be a much stronger, more punitive approach taken to poor-performing funds rather than relying on individuals to respond.”