The Industry Super Network (ISN) has called for all non-advised superannuation accounts to be transferred into MySuper by 2015 to prevent millions of Australians “paying money for nothing”.
ISN Chief Executive, David Whitely, said that the tax breaks afforded to members of retail superannuation funds, estimated at around $3.75 billion, are effectively swallowed up by commissions.
He cited new research, commissioned by the industry funds and conducted by Rainmaker Research, which estimated that nearly $3 billion in commissions were paid by retail super fund members during 2010. Commissions paid on life insurance held within superannuation made up approximately one-third of the total payments ($1 billion).
The report also projected that over the past three years approximately $1.9 billion has been paid in commissions to financial planners on employees’ compulsory super contributions.
Where these commissions are being paid… without any financial advice being received by the member, these payments are morally indefensible
Mr Whitely said the research illustrated why reform was urgently needed:
“Where these commissions are being paid on compulsory superannuation and without any financial advice being received by the member, these payments are morally indefensible.
“On this basis all existing account balances must be transferred into no-commission MySuper accounts from 1 July 2015.”
