EDITORIAL

Impaired super

Today I write to you as chair and founder of The Conexus Institute, a not-for-profit think tank with the sole purpose of improving retirement outcomes for Australians.

Within a budget of enormous economic consequence were a collection of super reforms which will significantly impact the superannuation system and the retirement outcomes of many Australians. I am sure the proposed measures were well-intentioned. Most will work (perhaps with some unintended consequences) but there is one area that is so flawed that, if implemented as announced, will impair outcomes for consumers.

I applaud any sensible measures which make an industry more accountable via disclosure and clarification of trustee responsibilities. Stapling super is a neat way to halt the creation of multiple accounts. It may well have some unintended consequences on industry structure over the long-term, but that might be what it takes to eradicate multiple accounts.

But the performance test is shoddy – we can do so much better. Simply put, the approach to assess performance is deeply flawed. It only looks at a small component of what drives retirement outcomes, it fails to accurately assess past performance, and it will distort the future decision-making process of trustees away from investing in the best interests of members. I’m sure this is not the outcome that Government, Treasury, regulatory bodies or any part of industry wants.

I’m no expert on performance assessment but our executive director, David Bell, lives and breathes this topic and I fully trust his views.

So how did we – all the agents involved in the super system – reach this point? There is too much to unpack here, but here are some questions to reflect on:

How effective has the interaction been between Government, Treasury, the Productivity Commission, APRA and ASIC in developing this approach to assess performance? How strong are their capabilities and experience in this area and did they seek expert guidance to make sure that this was a good recommendation?

1. Do all the above-listed groups feel like they can no longer trust the feedback provided to them by industry bodies, and view these groups purely as lobbyists? If yes, then is this an irretrievable situation for the industry bodies?

2. As an industry are we able to collaborate to develop solutions which put consumers first, or can industry not get past its agencies and ideologies? Surely some of the problems being addressed, particularly multiple accounts, could have been solved through industry collaboration.

That is why I decided to create and personally fund The Conexus Institute. We are free of agency issues and are totally focused on consumer outcomes. We are supported by an advisory board of excellent minds and strong values.

We’re very busy at the moment but we can’t let this issue pass by – the long-term impact on consumers is too significant. We’ll be more vocal over the next little while as we share our opinions, analysis and research. There is no agency or political motive. We’re available to brief all involved, politicians, regulators, industry or media.

We’re here to collaborate with anyone who wants to put the consumer first.

If you would like to work with us in any way please contact David Bell.