Lobby group Industry Super Australia says that its multimillion-dollar advertising spend is in the best financial interests of members.
Speaking to the Senate economics legislation committee, ISA deputy chief Matthew Linden denied that its advertisements around the superannuation guarantee increase were “misleading and deceptive” and said they were attempts to better inform members.
“You’d have to be living under a rock to not understand that there are very significant efforts being made to alter the arrangements around the superannuation guarantee and proposals to breach the preservation rules and allow people to access their superannuation for a whole range of purposes,” Mr Linden said.
“This would have very significant consequences for their retirement savings. Not proceeding with the increase in the super guarantee or breaching preservation rules or allowing people to opt-out would leave a couple around $60,000 worse off at the time of retirement.”
The majority of ISA’s $23 million annual budget is spent on direct advertising, with a recent “reassurance campaign” featuring chair Greg Combet and media around the superannuation guarantee accounting for “about a third of annual advertising expenditure”.
While ISA acknowledged that APRA was looking into the appropriateness of its advertising campaigns – which it claims are “highly cost-effective compared to alternatives” – it also told the committee that individual funds were unable to opt out of campaigns they might feel breached the sole purpose test.
“If a fund did not agree with ISA’s program, then it could leave the collective if it wished to do so,” Mr Linden said, adding that funds considered their commercial arrangement with ISA “in detail” on an annual basis.