After last week's leak, the Cooper review has now made its MySuper plans public. And, of course, the industry bodies weighed into the debate with a variety of opinions, but the big sticking point was would MySuper affect the level of fees that super fund members pay?
In a piece published in The Australian Financial Review, Jeremy Cooper, the chairman of the Super System Review, rejected the notion that MySuper would increase costs.
"If funds think that extra costs would flow from MySuper, let's work through these issues. So far we have not seen any evidence that MySuper would materially increase costs," he said in the article.
In fact, according to Cooper, the biggest aim of MySuper would be to lower overall costs, "while maintaining a competitive market-based, private sector infrastructure for super".
"We want to make super better value for money and we have designed the MySuper concept with this in mind," he said.
According to an Australian Financial Review article about a Deloitte report commissioned by the Cooper review, which was also released this week, the estimated cost of a default fund within a large super fund would be between 0.32 per cent and 0.66 per cent, rather than the current industry average of 1.2 per cent.
However, the Investment and Financial Services Association (IFSA) hit back and said the major superannuation funds already provided super products with low fees.
"There is nothing in MySuper that isn't available in the market today at similar cost and with consumer choice and control," IFSA chief executive John Brogden said.
He commented that fees in large retail master trusts had fallen by 0.45 per cent to average 0.79 per cent.
However, as the newspaper pointed out, Brogden was referring to fees on corporate master trusts.
"The two products could not be more different - one is a retail product and the other a wholesale product for employees of a particular company," Australian Financial Review journalist Andrew White wrote.
So confusion reigns and Brodgen also had issue with the MySuper default arrangement, saying that it would be a case of "legislating apathy".
But Association of Superannuation Funds of Australia chief executive Pauline Vamos said that was not the case, rather MySuper would ensure trustees operated fund in a transparent and accountable manner.
"This is the first step in clearly articulating a super fund's trustee's duties where the member does or does not make investment choice," Vamos said.
"We know that there are many efficient, low-cost options. The industry has age-based defaults and asset class diversification. Many of these services have been developed in response to different needs of members. We now need to ensure the impact of MySuper enhances the value to members, not detracts from it."
While IFSA had issues with fees, the opposition also came out this week with concerns that the introduction of MySuper was simply another example of government over-regulation and intervention in the financial services industry.
Speaking at an Association of Financial Advisers (AFA) lunch this week, opposition treasury spokesman Joe Hockey said he had concerns over government intervention due to the findings of the Cooper review.
"I am always nervous about government prescribing new financial products. Instinctively I say that this isn't the role of the government, but of the industry," Hockey said.
This echoed comments made by opposition superannuation spokesman Luke Hartsuyker earlier in the week.
"The coalition thinks we should be encouraging innovative investment strategies from trustees rather than limiting you to standard investment choices offering standard returns to disengaged members," Hartsuyker said.
Brodgen agreed.
"What the Cooper review doesn't understand is that Australians want control and choice in superannuation," he said.
"Instead, MySuper will deny people the control and choice they want in their super with a dumbed down, one-size-fits-all approach."
With all the talk about fees and control, it seems the battle for Australia's super system has come down to party lines.
Hockey told the AFA lunch that the Labor government was going to be more sympathetic to industry funds.
"The industry funds are union friendly, and the unions fund the Labor Party and they're tied up with the government. This isn't a joke . this is a poltical reward for union support," he said.
