Today’s announcement of a Productivity Commission study to develop criteria to assess the efficiency of the superannuation system provides a valuable opportunity for improvement, says the Association of Superannuation Funds of Australia (ASFA).
ASFA notes, however, that it is important that the Productivity Commission study explicitly recognises some of the important benefits of the current system, including the ability to choose a fund, members investment choice, active investment management of default portfolios as well as the provision of insurance and advice.
“We have a world-class system, and these are some of the important benefits that set us apart,” explained Pauline Vamos, CEO, ASFA.
“There is always room for improvement, but it’s important to start by recognising what our system does well.
“We need to make sure that the way we evaluate the system is fair, and that we are measuring the right things in terms of efficiency. For example, we can’t assess the efficiency of the industry effectively unless we exclude external forces like economic conditions and the broader tax and regulatory environment.”
ASFA suggests that costs can be kept under control through the reduction of government red tape, removal of barriers to the consolidation of legacy products and simplification of regulatory compliance.
ASFA also notes that the full implementation of SuperStream and MySuper will further improve efficiency, although it will still be some years before the full benefits of these reforms are realised.
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