More detail needed on super stapling scheme to ensure consumer protection: AIST Federal Budget response

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The Government's announcement of a new super stapling measures will need careful consideration to ensure all members' interests are protected, the Australian Institute of Superannuation Trustees (AIST) said tonight.

AIST CEO Eva Scheerlinck said there was no place for underperformance in the super system, but the industry would need to see more detail about how individuals would be stapled to a fund for life.

"We need to ensure that people are not in danger of being mis-sold or stapled to an underperforming fund outside the default system," Ms Scheerlinck said. "In particular, we are concerned that the scheme does nothing to protect people who already in dud funds."

Ms Scheerlinck said she was also deeply concerned that individuals could find themselves uninsurable because they were stapled to a fund whose insurance does not cover their occupation.

"For instance, someone whose first out-of-school-job is working in call centre who then goes on to work in the mining industry may be stapled to a fund where they don't qualify for insurance protection," Ms Scheerlinck said.

On the Government's announcement of a consumer comparison tool for super and an annual performance test based on net returns, Ms Scheerlinck said both measures were long overdue but the comparison tool should extend to all super products.

Ms Scheerlinck said it was disappointing that there was nothing in the budget to improve retirement outcomes for vulnerable Australians.

"This budget is a missed opportunity to deliver greater financial security in retirement for low income earners and women, especially those who have been forced to deplete their super savings by accessing early release due to the COVID pandemic," Ms Scheerlinck said.

AIST will continue to call for the Government to abolish the $450 monthly income threshold and pay super on paid parental leave. It has also called on the Government to consider a one-off contribution to super accounts of low-income earners who accessed their super early.

 
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