Ausfund has called for a major restructure of the lost superannuation sector with the operation of a single eligible rollover fund (ERF) to deal with all lost and unclaimed accounts.
Responding to a recent Treasury discussion paper, Ausfund executive director David Haynes said a single ERF could provide a cost-effective, streamlined, one-stop shop to address all lost and unclaimed superannuation issues.
“The ERF sector currently has too many players, relatively high fees and charges, and low levels of activity among some providers,” he said.
Therefore, he said Ausfund is advocating for wholesale change to remove inefficiencies within the system.
“It makes sense to have a single ERF servicing the whole industry and working actively to reduce both multiple accounts and the billions of dollars contained within inactive lost accounts,” Haynes said.
But in order for this to be achieved government intervention would be required, SuperRatings managing director Jeff Bresnahan told InvestorDaily.
“It’s going to take government intervention because no one is going to voluntarily walk away from what are in some cases cash cows,” he said.
“The only way it will happen is through regulation and Superannuation Minister Nick Sherry has flagged his commitment to cleaning up this $12 billion lost super problem and that certainly will be one of the alternatives we suspect would be in his mind.
“I think it will be difficult … but it could probably be achieved by putting certain pricing limits in place across the industry, which would then drive a series of mergers or sales that can only be to the benefit of members.”
Ausfund is Australia’s leading ERF and operates on the “run to profit members only” philosophy.
