BT Financial Group supports key recommendations of the Productivity Commission's most recent superannuation report, saying the Westpac-owned business would welcome moving away from an "open market" MySuper model.
BTFG chief executive Brad Cooper said until now it has supported an "open market" model where any APRA-approved MySuper product is free to compete for default status as opposed to a model where an independent body, that could be susceptible to political influence, selected a shortlist.
"The PC's report, however, provides compelling analysis and has led BT to conclude that a different model is necessary to protect consumers from account duplication, underperforming funds and balance erosion," Cooper said.
BTFG is now supporting the Commission's recommendation that customers be put into default products only once, and take that fund with them when they switch jobs.
It is also on board with a recommendation the Federal Government establish an expert panel to select up to 10 "best in show" funds to help guide consumer choice, while sitting outside the industrial system.
"Clearly a lot of important detailed design work remains to be done. Nevertheless, we recognise that the report presents a unique opportunity for both sides of politics to agree a bipartisan model," Cooper said.
Cooper says it is "necessary" to take small and underperforming products off the market. Same for fund mergers having provision for permanent gains capital gains tax relief.
"Any superannuation fund that believes it performs strongly, is well governed and delivers good member outcomes should embrace competition, and by extension, the PC's proposals," he said.
The PC report was published on May 29 after a two-year long examination of Australia's $2.6 trillion retirement system. It found $62 billion worth of super held in 1.7 million accounts had been pushed into under-performing funds.
Ten million duplicate funds were found, which could erode retirement savings. Also, poor governance practices on trustee boards prevented fund merger that could have made the system more efficient.
The report pitched the reform as adding $3.9 billion to customer benefits each year, if implemented.
"We encourage Parliament move swiftly to pass the announced measures to reduce account erosion through fee capping on small accounts, the ban on exit fees, the need for independent directors on superannuation trustee boards and stronger APRA member protection powers," Cooper said.
Industry associations FSC and SMSFA also supported PC recommendations on May 30.