29 funds were reported (although not listed) as underperforming. 5 million members are currently in underperforming retail or industry funds. Some of these might be forced to close.
The Productivity Commission recommends a transparent list of top-10 performing funds for consumers to choose from.
Not-for-profit funds outperform retail funds on average.
Increasing pressure on business to review their default funds.
Increasing pressure on regulators - Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) to keep an eye on poor conduct in the super industry.
Visibility of the details and possible changes will come from the government in the lead up to the election.
Naturally, the Productivity Commission has been focused on price value for customers. Our experience with super is that it can be more complicated than that, and not to be discounted is the value of professional advice to have a heftier impact on returns. The money that someone might save in a low-cost option can be far outweighed by the returns of active monitoring and management.
Engagement in superannuation is always mixed, and especially depends on age and proximity to retirement. We liked this graphic from the Productivity Commission Report on levels of engagement. Which one are you? And can you help young people move up a step?
Competition across the $2 trillion sector is already increasing, meaning it’s a buyer’s market when it comes to Super. Don’t act in haste, but do look into your account and chat to your fund or adviser about your options. It could mean the difference of thousands of dollars, or better still, more time in more comfort. If you’d like support navigating the 200+ options available out there, just shout.