Why the disruptive super reforms will leave members better off
The crackdown on superfluous accounts and underperforming funds and products is already producing tangible improvements.
Deborah Ralston
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Compulsory superannuation has been a key pillar of our retirement system. It allows people to achieve a retirement income that reflects their pre-retirement income, and as the system matures, people will increasingly fund more of their own retirement to the benefit of both individuals and Australian taxpayers.
The current system has two main problems, however. First, the focus of superannuation has often been on building larger balances through increased contributions without sufficient regard for lower fees and higher investment returns. And second, while compulsory contributions ensure a better retirement outcome, members are often disengaged and don’t make the right choices to maximise retirement savings.
12 funds to manage majority of super assets: KPMG investordaily.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investordaily.com.au Daily Mail and Mail on Sunday newspapers.
30.5%
KPMG projections in the report show that by 30 June 2021, industry funds will have overtaken SMSFs and, by 2025, will represent 36 percent of the market.
The report says that seven mergers have been announced since 30 June 2020 and many more are in discussions. when the current merger activity completes, based on 30 June 2020 data, 76 percent of AUM and 77 percent of member accounts will be managed by the top 12 funds / providers with AUM >$50bn and 47 percent of AUM and 43 percent of member accounts will be managed by 5 $100 billion + ‘mega funds’ [QSuper/Sunsuper/PostSuper, AustralianSuper, IOOF & MLC, Aware Super, AMP]
Linda Elkins said: “The Your Future, Your Super package will further shape the reforms envisaged in the Royal Commission report. The potential effect of stapling a member to their existing super fund is expected to provide some funds a significant challenge attracting new members. For many funds, meeting rising member expectations will lead to increas