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During the October 2020 Federal Budget, Treasurer Josh Frydenberg unveiled Your Future, Your Super, a raft of new provisions aimed at improving the accountability, transparency and performance of superannuation funds. These provisions are an extension of previous My Super regulations and now impact all “trustee-directed products”.1 In essence, they will rank the relevant products by fees and investment returns with underperforming products publicly marked as “underperforming” and barred from new members.
QIC supports the drive for performance in the superannuation industry and believes members’ financial interests must be paramount to all decision making. However, we also believe there are unintended consequences from some of the drafted frameworks which will adversely impact Australian super fund members and the broader community.
That is why QIC is signalling its willingness to work with industry partners, regulators and government to ensure members get the surety and security they deserve from Australia’s super funds, and all communities continue to benefit from long-term sustainable investments into their social and physical infrastructure.
QIC’s main cause of concern focuses on the proposed performance test which will compare superannuation trustees’ non riskadjusted returns to passive listed indices via an annual performance test.
In short, we see the proposed changes as an erroneous treatment of the key principle of investing – the balance of risk and return – with the real consequence of an erosion of the ability of our nation’s super funds to meet the retirement needs of all Australians, as well as investing into Australia’s vital economic rebuild following COVID.