Last week, Jeremy Cooper and his panel finally joined Bernie Ripoll and Ken Henry in releasing his report to government.
Cooper released 177 recommendation in total to help finesse Australia’s superannuation system.
In a moment of surprise, it seems much has come out of Cooper’s review. Despite the speculation and jeers that the public leaks would do nothing but leave the finished report an empty shell branded with official-looking stamps, it appears to have delivered – at least in part.
The response varied. Some were elated. Others impressed. The remainder gasped at an opportunity lost.
In one of his first public addresses, newly appointed FPA chief executive Mark Rantall deemed Cooper as one of the latter.
Rantall declared the report as a “lost opportunity” to address the inadequacy of superannuation to provide for Australian’s income in retirement.
He said it portrayed advice from intermediaries as something to be discouraged in both MySuper and in the Choice environment; it focuses instead on reducing costs.
Rantall said while some of the recommendations in the report work to improve superannuation for consumers, it does not address a number of shortfalls as outlined in the FPA’s detailed submissions.
Though all was not gloomy, with recommendations for Self-Managed Superannuation Funds (SMSFs), and, in parts, MySuper were applauded.
“The recommendations for SMSFs emphasise the importance of advice. The FPA supports the need for SMSF auditor independence and agrees that competence should be raised,” he said.
“Also, MySuper as a whole-of-life product through the inclusion of a mandatory retirement income stream model will benefit many Australians.”
Yet while the FPA supports some elements of MySuper, ultimately they have deemed it too narrow.
“It limits choice, reduces competition, disconnects employers from their employees and reduces member engagement with their superannuation,” Rantall said.
AIST Chief Executive Fiona Reynolds said the review’s MySuper model recognised that all working Australians deserve the protection and benefits of commission-free, low-cost super, already provided to the estimated six million-plus workers who belong to not-for-profit funds.
“Many people find super confusing. If these reforms lead to more Australians understanding their super and helping them to keep track of it, then Cooper will have achieved a fundamental shift in the way our compulsory super system operates,” she said.
However, despite supporting much of the review, Reynolds said many Cooper recommendations would require further analysis and clarification, including capital requirements for super funds, a review of superannuation in the Award system and some of the governance proposals suggested by the panel.
Investment and Financial Services Association chief executive John Brogden called the review a far-reaching, comprehensive blueprint, though warned against the review’s MySuper proposal.
What are your thoughts on Cooper?
