The Your Future Your Super bill has passed the House of Representatives and will now be voted on after the Government dropped the controversial investment veto powers.
Labor will challenge the move in the Your Future, Your Super Bill mandating that employees should be stapled to underperforming funds when it comes to its third reading.
AIST chief executive, Eva Scheerlinck, said: “While we welcome the shift on more appropriate benchmarks and administration fees in the performance measures, the regulations unfortunately confirm widespread carve-outs to performance testing, including for the worst performing super products.
“Crucially, some of the worst-performing superannuation products have been carved out of performance testing, putting consumers at risk of being stapled to a dud fund for life which will actually reduce retirement outcomes.”
Scheerlinck said at least one-third of super funds, including those identified by the Productivity Commission as worst performers, would not be subject to the performance test, and any new MySuper products would not be subject to the test for the first five years.
Administration fees are one of the biggest drains on retirement savings and including them in the test will drive fast improvements to the super savings of over a million super members, according to Super Consumers.