Federal government set to overhaul superannuation

The federal government is expected to overhaul the superannuation sector and implement recommendations from a Productivity Commission review.

Assistant Minister for Superannuation and Financial Services Jane Hume has set a deadline of 2021 for the shake-up, the year the compulsory superannuation guarantee is set to rise from 9.5 to 10 per cent.

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The changes include reintroducing legislation to make all superannuation opt-in for under-25s, saving $2.6 billion in fees, according to The Sydney Morning Herald and The Age.

Senator Hume plans to act on the Productivity Commission’s recommendations for the sector after a review found workers could be entitled to an extra $500,000 for retirement.

“Which is why we have to get rid of high fees, duplicate accounts, underperforming funds and unnecessary insurance, because that is what makes the system inefficient,” she told the newspapers.

“If a system is compulsory and it quarantines nearly $1 in every $10 that you earn for up to 40 years, it is imperative that the government make that system as efficient as possible.

“In my mind, no government in good conscience can demand workers compulsorily quarantine more of their money.

“I don’t think the government can morally ask workers to give up more of their current earnings and put them into an inefficient system.”