AUSTRALIA - Prime Minister Julia Gillard said a re-elected Labor government will allow Australia's pension industry to offer a new standardised fund recommended by a government-commissioned review.
The fund, called MySuper, was proposed by the Cooper Review last month (Global Pensions: July 5, 2010). The review said it could cut fees paid to asset managers by 40%, helping the average worker retire with an extra A$40,000 ($36,000).
Should the Labor Party be re-elected on 21 August, MySuper would be introduced from 1 July, 2013, Gillard said.
"Access to safe, low-cost and simple superannuation is essential to help Australians' retirement savings go further," she said. By 2050, almost 25% of Australians will have reached retirement age, compared with one in seven today, she added.
The study of the A$1.1trn pension system was overseen by Jeremy Cooper, former deputy chairman of Australia's markets regulator. The Treasury estimates long-term savings of about A$2.7bn per year from MySuper, along with more efficient back-office operations.
Financial Services Council chief executive officer John Brogden said while he was pleased there had been improvements made to the original MySuper proposals, the Labor Party should break open the union/industry super funds monopoly on industrial awards.
"The MySuper proposal announced by the Labor Party today is an improvement on the flawed Cooper model released several weeks ago. However we seek further commitments from them," Brogden said.
"At the moment union/industry super funds have a monopoly on superannuation in awards through (workplace relations tribunal) Fair Work Australia.
"Opening the default market to competition is crucial to ensuring fees continue to be driven down. Retail superannuation funds have some of the cheapest products on offer with the best services and product features, yet these funds are excluded from award super by Fair Work Australia.
"Without fixing the default fund award provisions, the whole reform package is undermined."
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