Industry representative groups believe the federal government's draft on improved superannuation transparency does not go far enough, with at least $400 billion in retail fund assets escaping proposed disclosure requirements.
In submissions to government both Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) said the proposed exclusion of platforms and legacy products from public dashboard reporting would carve-out a large portion of the bank-owned and retail super sector.
ISA cites independent analysis by Rainmaker, where as at December 2014, 72% of the $572 billion of retail superannuation assets were held via platforms.
ISA said product dashboards are designed to provide consumers with a standardised and simple presentation of fees, all underlying costs, risk and net returns. It added the proposed changes mean many bank-owned super products will not have to disclose many of their underlying investment costs.
"Australians need to be able to compare the net performance of super funds to be able to make informed choices," ISA chief executive David Whiteley said.
AIST said in a superannuation system with more than 40,000 member investment choices, the exclusion of disclosure and reporting requirements from Choice options (not MySuper options), encourages greater inefficiency within the system and "fails to suitably protect members who are invested in those excluded options."
It said while some feedback has been provided by other organisations at recent meetings with regulators that the draft regulation could also include the top 10 investment options for platforms, "AIST strongly believes that full inclusion is required to ensure comparability and transparency to aide consumer protection and system efficiency."
AIST welcomes proposals for separate dashboards for each lifecycle stage but is concerned that the lifecycle has to be within a super fund's top 10 investment options. The association is also not a fan of the product dashboard comparison metric, saying it focuses on and emphasizes the importance of fees, "whereas net returns are what the member experiences."
It adds members will also need the option of examining not just the impact on a $50,000 super balance, but the options of a $10,000 and $250,000 account balance as "the differential in the impact of asset based fees - particularly on high account balances drives the need for such a disclosure."
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