Super benefits to rise as costs are cut

Superannuation fund members will soon start seeing better benefits as technical reforms – now under way – progress.

The industry and the government both believe the new systems – and clarifications – contained in the reforms will cut costs and boost benefits.

However the Senate could still block one key proposal.  That is to use Medicare’s powerful computing systems, as a financial services clearing house.

The Federal Superannuation Minister Chris Bowen said the Opposition has threatened to use its numbers in the upper house to do just that.

However the Parliament has now passed financial market supervision reforms, which the government proposed.

Mr Bowen said these would “enhance the integrity of Australia’s financial markets.”

The superannuation industry welcomed this news, praising the government, in particular, for extending consumer protection to superannuation borrowing arrangements.

This was done by declaring that these borrowings are financial products under the Corporations act.

Though technical in nature, the Australian Superannuation Funds Association, said this would help to curb the industry’s costs and the savings would be passed on to fund members.

Mr Bowen also welcomed an announcement by three of Australia’s largest superannuation fund managers, AAS, Pillar Administration and  Superpartners, that they would accept a common set of computer protocols, to cover the movement of data and money between funds.

“This agreement will make it easier and more efficient to transfer money between funds,”
Mr Bowen said.

That, too, would result in lower costs for fund members, he added.