Superannuation shake-up could leave Australians $500,000 richer in retirement
Australians could be more than $500,000 richer in retirement under the biggest-ever proposed shake-up of the superannuation system.
A Productivity Commission report has found the current system is “harming millions of members” with underperforming funds, multiple accounts and excessive fees.
Super funds that underachieve over the long term would be booted from the industry under the Commonwealth agency’s proposal.
New workers would also be steered towards the industry’s top performers, with an independent panel creating a ‘best in show’ shortlist of 10 funds to choose from.
“I think there is merit to this idea that we can ensure that the better performing funds are taking up by more members,” Treasurer Josh Frydenberg said.
“Because what the report did find is that right now it is a lottery for members as to the quality of the funds.”
Even a worker aged 55 would be better off by nearly $80,000 if every recommendation was adopted.
The Federal Government tasked the commission with its investigation about three years ago.
Many of the recommendations today build upon similar ones released last year in the commission’s interim report and Mr Frydenberg said the Government would consider all options.
“The Government will await the final report of the banking royal commission, which is examining the conduct of super funds and the regulators, before finalising its response to the Productivity Commission report into superannuation,” Mr Frydenberg said.
More to come.