Super reforms ‘to save billions’, says Jane Hume

Superannuation Minister Jane Hume has pushed back at fund managers and Labor over the government’s superannuation reforms.

Superannuation Minister Jane Hume. Picture: Daniel Pockett

Superannuation Minister Jane Hume has pushed back at fund managers and Labor over the government’s superannuation reforms, declaring that the major overhaul of the $3 trillion system will pump billions of ­dollars into the pockets of working Australians.

Senator Hume said “no one likes change, particularly when you’re on a good wicket”.

“The superannuation sector has lobbied hard against the measures we’ve taken, and Labor has been their megaphone on the floor of the parliament. But, in the end, it’s hard to argue with changes that make super fund members, not super fund managers, better off,” she said.

Writing online for The Australian after the government introduced its Your Future, Your Super package into parliament on Wednesday, Senator Hume stresses that the ­reforms are aimed at ensuring fund managers deliver value for money.

“There are still funds out there that are persistently underperforming, but it’s hard to tell which ones they are and what the alternatives might be. There are also still funds that don’t think twice about how they are spending your retirement savings,” she writes.

“And while we’ve consolidated much of the stock of duplicate funds, each time you change jobs, there’s a chance that you’ll accidentally open yet another.”

The reform package announced in the October budget has been estimated to save Australians $17.9bn over 10 years.

The proposed laws, scheduled to commence on July 1, would ensure superannuation accounts follow employees when they start new jobs, and create an comparison tool ranking fund performance.

The Treasury Laws Amendment (Your Future, Your Super) Bill, which responds to Productivity Commission recommendations, has been designed to combat super fees, totalling $30bn a year, and address the three million accounts sitting in funds worth over $100bn.

The new laws will force superannuation products to meet annual objective performance tests and strengthen obligations for trustees to act in the best financial interests of their members, including disclosing portfolio holdings and providing more detailed information before AGMs.

Senator Hume said the reforms were primarily aimed at keeping pressure on the super fund giants to “drive competition, transparency and choice”.

“There are still funds out there that are persistently underperforming, but it’s hard to tell which ones they are and what the alternatives might be. There are still funds who don’t think twice about how they are spending your retirement savings.”