Opposition leader Bill Shorten has raised the prospect of a major shakeup of retail superannuation funds to ensure members’ retirement saving interests are put ahead of profits.
Speaking at a dinner in Melbourne on Thursday night, Mr Shorten said he would consider giving financial regulators the power to force bank-owned super funds to appoint independent trustees to ensure best practices.
He also flagged giving the Australian Prudential Regulation Authority powers to sack trustees of habitually underperforming funds, The Australian reported.
Mr Shorten’s comments follow a Productivity Commission report this year that found that the not-for-profit sector – which includes industry and public sector super funds – was dramatically outperforming the for-profit ‘retail fund’ sector, which is dominated by big banks and investment companies like AMP.
The Opposition Leader argued there was a conflict for banks running superannuation funds in the interests of their members and shareholders.
“One idea that has emerged from some quarters is: should banks actually be in superannuation?” Mr Shorten was quoted as saying.
“I don’t know about that. One idea, and it’s only an idea … you could require for-profit funds to outsource the trusteeship to genuinely independent organisations,” he said.
“Of course you would need the regulators to help you enforce that genuine independence.’’
Mr Shorten said his biggest concern was with underperforming superannuation funds, adding that his comments were “initial thoughts’’ and would require further examination.
At the financial services royal commission in August, industry super funds, by and large, avoided controversy, while retail funds were questioned on apparent serious breaches, including charging fees for no service, using loopholes to maintain commissions after they were banned, and charging fees to dead people.
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