Special Briefing with The Hon. Bernie Ripoll
The superannuation industry is under enormous pressure from regulators, the Productivity Commission, and the Federal Government. The current view of the government is to remove the right of industry funds to receive contributions from employees entering their industries.
When the Productivity Commission released its draft report into superannuation, our colleague, The Hon. Bernie Ripoll spent the week talking to the key players in Canberra to assess the political landscape on both sides of politics. We spoke to him about the future of super and what individual funds and the industry can do about it. The videos below include a few highlights from that discussion.
Our proposal for a better version of the 'Best in Show'
Given that the Productivity Commission agree that there are many funds out there doing a great job (actually the majority of industry funds) – it’s seems counterproductive to dramatically alter the system.
This doesn't mean that a better system can't be developed. We believe that going forward a such a system would be one which:
- Ensures that performing funds have a competitive advantage
- You don’t have construction workers as members of a fund designed for health employees
- That we solve the multiple member balance issue with “automated member account portability”
The way this could work would be:
- The Federal Government sets up a panel to establish whether funds are either Tier 1, Tier 2 or Tier 3
- When a person enters the workforce they can either choose their own fund or default into their employer/award's recommendation (no change from the present)
- When they move jobs, the auto-account-portability system kicks in:
- If your new employer/award’s default fund is of a higher tier than your current Fund, you are automatically switched into the new fund
- If your new employer/award’s default fund of an equal or lower Tier, you stay in your existing fund and your new contributions go to the old fund as well
These features would ensure that members:
- Have one super fund
- It’s aligned to the industry they have had something to do with
- There is increased competition for super contributions
Potentially the system could be overseen by a panel similar to the one proposed by the Productivity Commission.
This at least could be the starting point for a conversation with the powers that be. Let us know if you think we should take this idea forward as a submission to the Productivity Commission.