MySuper not the only problem: AIST

The Australian Institute of Superannuation Trustees has hit back at newly launched consumer group Super Consumers Australia after it unleashed an attack on MySuper products yesterday.

AIST chief executive Eva Scheerlinck moved to play down the significance of the Super Consumers Australia's (SCA) comments on underperformance in MySuper today, noting underperformance was not only limited to one sect of the superannuation system.

Her comments come just a day after the new consumer group slammed MySuper - and the superannuation lobby - by revealing research which showed more than 170,000 people were placed in a poor performing super product in 2017-18.

SCA acting director Xavier O'Halloran yesterday said more than 176,000 new accounts were created for MySuper products in the bottom quartile for performance, pointing the finger at a "badly designed default system" and labelling super an "unlucky lottery".

But Scheerlinck hit back, reminding SCA that underperformance across the industry was problematic, and adding Rice Warner research shows workers who stay in non-default (choice) funds could be up to $50,000 worse off on average.

"In a compulsory super system, long term underperformance by any fund is unacceptable," Scheerlinck said.

She added that the focus of regulators should be broadened to include the choice sector.

"While the regulator's recent move to examine underperformance in the MySuper is welcome, the millions of consumers who are being ripped off by high fees and poor performance are in danger of being ignored," she said.

"Extending regulatory focus to the non-default (choice) sector, where underperformance is endemic, must not be delayed."

The AIST boss also said the lobby group was looking forward to working with SCA, because its focus "has always been to deliver the best outcomes for superannuation members."

"Profit-to-member funds are structured in a way that puts members' interests front and centre," she said.

"Unlike bank-owned super funds and other for-profit providers, profit-to-member super funds do not return profits to commercial shareholders and have a non-conflicted governance structure - both key reasons why the profit-to-member sector has delivered outstanding returns for members for more than two decades."

Read more: MySuperSCASuper Consumers AustraliaAISTAustralian Institute of Superannuation TrusteesEva ScheerlinckRice WarnerXavier O'Halloran
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