With Government Response to Cooper Review, Australia Superannuation Funds Face Greater Scrutiny

(September 21, 2011) — Australia’s superannuation industry has unveiled stronger reforms, which it claims could result in higher member savings equivalent to a 1% increase in contributions.

In government changes revealed yesterday, Australia’s schemes will now face heightened scrutiny of their corporate governance and risk management policies. Treasurer and minister for Financial Services and Superannuation Bill Shorten outlined the major components of Stronger Super, which include the launch of “MySuper,” a low-cost simple default fund option.

Meanwhile, under additional proposals known as SuperStream, the government has established a working group that will create data and e-commerce standards to transfer employers to electronic payments of contributions.

MySuper and SuperStream emerged from the Cooper review of the superannuation system. The Cooper Review, chaired by Jeremy Cooper, was designed to overhaul the governance, efficiency, structure, and operation of Australia’s Superannuation System. The review has called for fewer, larger funds to enhance stability, making it harder for small funds to compete, unless they find a larger partner.

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