Superannuation regulators need to put more time and effort into engaging fund members rather than concentrating on paring back the system into its simplest form through the MySuper initiative, according to the chief executive of an industry body.
“I think Cooper said if you’re talking about the engagement model, then SMSFs (self-managed superannuation funds) are the pinnacle and this is where we should be striving towards,” Small Independent Superannuation Funds Association chief executive Michael Lorimer said.
“That’s not to say everyone needs an SMSF – it’s more about how do we get this 80 to 90 per cent of the public who would appear to be totally disengaged down to 70, 60 or 50 per cent,” he said.
“Instead, the regulators seem to be wanting to dumb down this default option and have the industry, at enormous expense, create all these no-frills solutions – and that’s the policy.
“Energy should be exerted to get the public more engaged, and that’s not just for the sake of a particular sector of the market, that’s for the sake of the future of this entire industry.”
Lorimer realises there will always be an element of superannuation members who will remain disengaged despite the industry’s best efforts to increase the interest of the individual.
However, he flagged the dangerous apathy towards retirement savings MySuper might end up encouraging among the public.
“If you spend too much time at the MySuper level, the risk you are going to run is that no one will really be in a position, from a public perspective, to be engaged enough to want to make the transition from MySuper to another form of super fund,” Lorimer said.
