12% super bid looks beached
The Age
Wednesday March 30, 2011
KEY superannuation industry members have called on the government not to let the latest wrangling over its mining tax package derail plans to increase compulsory super contributions to 12 per cent.Delegates at the Conference of Major Superannuation Funds on the Gold Coast responded with dismay to news the Greens opposed a key element of the package the planned cut to the company tax rate, which would, in part, compensate for the requirement to make higher super contributions."If the company tax cut is taken off the table it will be really hard to get business to take up 12 per cent super," Australian Institute of Superannuation Trustees chief executive Fiona Reynolds said. "It brings the focus back to the mining tax and company tax, rather than the good that could be done by increasing super."The institute has launched a campaign to generate support for higher contributions. Assistant Treasurer Bill Shorten told the conference that it should not assume 12 per cent super would pass through Parliament without outside support.But Industry Fund Services chief executive David Whiteley said with many business groups already opposed to the increase in compulsory super, the Greens' stance was likely to make little difference.Funds were also told to get behind big-picture changes, such as the introduction of low-cost MySuper accounts, rather than dwelling on details and misconceptions.Stronger Super consultative group chairman Paul Costello said MySuper would give funds an opportunity to get away from the "value-destroying" practices of measuring themselves against their peers and refocus on benefits for members."It's an opportunity to step back and be more explicit about the kind of return we're trying to generate for people and also to be more explicit about the risks we're taking to achieve that," he said.He said there was still confusion about MySuper in the industry but funds should not fall into the trap of developing the lowest-cost product possible and stripping away some of the features they now offer to cut costs."The government's real focus is not on cost reduction but delivering value to members," he said.Mr Costello said the government was also keen on a code of governance. He said that the government had not said what it wanted in a code, but was clear it wanted to achieve best practice in super fund governance.
© 2011 The Age
