The government is rightly pursuing reforms to weed out underperforming funds and eliminate multiple accounts – but there are concerns “stapling” members to a fund for life could leave them tied to a dud.
The superannuation reforms outlined in the Budget to ‘staple’ members to their existing super fund and stop underperforming funds from taking on new members is not the most effective way to remove multiple accounts. Instead members’ money should be automatically rolled over into a new fund when they change jobs.
The issues of underperformance and multiple accounts must be tackled but with far more ambitious reforms and a more rigorous performance assessment.
Being stuck in a chronically underperforming fund and paying fees across multiple accounts are a big drain on member savings – costing some member more than $500,000 at retirement.
However, the policy details outlined in the budget need re-calibration and strengthening to fully realise benefits for members.