Superannuation is a universal good and works to better the social fabric and overall quality of life for all Australians.
While the Australian default superannuation model has been exceptionally successful in raising individual participation, super fund complacency is rife, with underperforming funds exploiting member and employer apathy, and enterprise workplace agreements leading to the collection of increased contribution inflows while delivering high fee, utility-oriented products.
Most superannuation fund trustees genuinely believe they have their member's best interests at heart. However, belief is not the same as evidence, and the evidence is that some superannuation fund trustees are lawfully, ethically and morally conflicted, unable to put member interests before commercial self-interest.
Fortunately, Australia has been well served by both the Productivity Commission and Banking Royal Commission as it relates to superannuation, and the final Productivity Commission Report is an exceptional assessment of the sector.
Unlike incumbent super funds and their peak bodies, I am a strong advocate of the best-in-show 'assisted employee choice' recommendations.
I had the privilege of presenting to commissioners Karen Chester and Angela MacRae at the Melbourne public hearings, and to anyone attending the hearings it was clear that neither commissioner had any patience for vested industry interests or political populism.
Their recommended panellists, consisting of the heads of independent government agencies such as the Reserve Bank, ACCC and the Parliamentary Budget Office and a consumer representative, is as practical and unbiased as any of the other recommendations contained in the report.
While an opinion that the proposed default super changes should not be pursued because they are 'experimental' or 'unproven' abounds, this is the very reason the sector stubbornly rejects change and even low paid Australian workers stand to retire with over $500,000 less savings.
In the absence of strong consumer-led competition in the default super segment, the proposed best-in-show model is an excellent step towards improving retirement outcomes for everyday Australians; the recommended model protects members from multiple accounts by only defaulting them once when they enter the workforce.
The curated shortlist of default super products also ensures disengaged members are not defaulted into underperforming products by restrictive enterprise workplace agreements, or employers either ill-equipped to select a fund or conflicted and failing to act for the sole benefit of employees.
Behaviourally, it is doubtful that the recommended default reforms will address employee disengagement with super, and 'doing nothing' will continue to be the default choice of most employees. While this will result in a less than ideal allocation of a super product via sequential allocation, it still addresses supply-side market failures with a blunt, yet practical approach to protecting member interests.
The ideal of increased consumer-driven competition in superannuation must continue to be pursued - private sector innovation will lead to greater efficiency, transparency and relevance in a sector sorely lacking in competitive market dynamics.
So regardless of whether the government of the day has the will to implement the Productivity Commission's recommendations, private enterprise must innovate to further member interests and achieve greater competition in the default superannuation sector.
The hope is that the super industry pivots away from entrenched industrial relation positions that place individual retirement saving outcomes in the hands of employers and workplace agreements.
Perhaps the prospect of criminal charges and tougher regulatory oversight will force pro-active leadership from those running our nation's super funds.
Let the days of selling underperforming super products to unsuspecting employees be numbered - greater prosperity for all Australians is the goal.