Super win for big banks
SUPERANNUATION funds owned by the big banks are notching up a win, after the government struck a last-minute agreement with the industry over the design of its low-cost super plan.
SUPERANNUATION funds owned by the big banks are notching up a win, after the government struck a last-minute agreement with the industry over the design of its low-cost super plan.The Assistant Treasurer, Bill Shorten, yesterday said super funds would be able to charge members different fees under MySuper, a no-frills super product being introduced from July 2013.MySuper is set to spark the biggest overhaul for the $1.3 trillion super industry since its introduction in 1992, by requiring all funds to offer a no-frills product with low fees and no commissions.However, in a reprieve for the for-profit sector, final details unveiled by Mr Shorten went against earlier Treasury recommendations that MySuper funds be required to offer a single pricing point.Retail funds had lobbied fiercely against uniform pricing, saying it would prevent them from offering better deals to large employers, while union-affiliated industry funds had sided with Treasury.The chief executive of the Financial Services Council, John Brogden, welcomed yesterday's announcement of flexible pricing, describing the package as "balanced and measured"."The improvements announced today are a big win for a more competitive and flexible MySuper," Mr Brogden said.Mr Shorten defended his decision, saying he would not stop funds offering discounts to large employers."One thing we are determined to do is to see as many good deals as possible for people and still maintain transparency," he said.After last-minute talks with the industry, Mr Shorten also revealed the final timetable for MySuper's introduction.Workers who have not chosen a fund will have their super contributions paid into a low-cost MySuper fund from October 2013, while all default balances will be shifted to MySuper by 2017."By 2017, the vast majority of superannuation balances in Australia will be commission-free and by 2013 all new superannuation contributions will be commission-free," Mr Shorten said.The final details have been reached after months of intense discussion with industry through a working group chaired by the former general manager of the Future Fund, Paul Costello.While retail funds welcomed the changes on pricing, the government will also make sure discounts are not used as hidden subsidies to win new business, by requiring discounts to be published.The chief executive of the Industry Super Network, David Whiteley, said it also would be crucial to ensure discounts were not paid for by other members' funds.Reforms are also intended to deal with "lost super".