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Home News Merit-based selection preferable to current superannuation safety net
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TAGS Grattan Institute, Superannuation
The government should set up a merit-based tendering process for default superannuation accounts to save customers billions, says a report from the Grattan Institute. The findings reinforce conclusions from the Cooper Review, Productivity Commission and the Financial System Inquiry.
Reducing superannuation fees could save more than $2 billion per year but recent policy initiatives “will not cut fees much”, argues a report by think tank the Grattan Institute.
Grattan says Australians pay $4 billion per year above what would be charged by lean funds, and that cutting fees to what high-performing, lean funds charge “could save more than $2 billion a year.”
Currently the total cost of running superannuation is about $21 billion in total — 1.2% of funds under management per year, or $16 billion across the collective funds, plus about $5 billion in self-managed super.
There is “little evidence” that funds charging higher fees provide better member services, argues the report.
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The Mandarin is where Australia's public sector leaders discuss their work and the issues faced within modern bureaucracy. Join today to discover the latest in public administration thinking and news from our dedicated reporters, current and former agency heads and senior executives.
David Donaldson is a journalist at The Mandarin based in Melbourne. He's previously written for The Guardian and Crikey and holds a masters in international relations.
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