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Super changes could mean $500,000 boost

AAP  |  10 Jan 2019Text size  Decrease  Increase  |  
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Australians could retire with an extra $500,000 in superannuation if the federal government makes changes to the $2.8 trillion sector, according to a new report.

Revoking the licences of superannuation funds that persistently underperform is among advice in the Productivity Commission's report, set to be tabled in parliament on Thursday.

The report - three years in the making - also recommends Australians only be given a default superannuation fund when they first join the workforce.

superannuation savings productivity commission

About a third of super accounts, or 10 million, are accidental multiples, says the PC

Beyond that, employees should be given a list of the 10 best superannuation funds to choose from when they start a new job chosen by an independent expert panel, the authority says.

That advice had been included in the commission's interim report in May, and is expected to boost Australians' retirement savings by $165,000.

Treasurer Josh Frydenberg says the report has identified "significant structural flaws in the system".

Frydenberg said there is "merit" in the idea of getting more Australians into funds that are performing well, with the current system creating a "lottery" for new members.

"There is a big idea at the heart of this report, mainly that the default system should revolve around the member, not their workplace," he told ABC's Radio National on Thursday.

The government will not make its final response to the report until it's received the final findings of the banking royal commission in February, which looked at the conduct of super funds and how they're regulated.

Asked about resistance to changes the government may face from the superannuation industry, the Treasurer said he was not interested in the sector's politics.

"I'm interested in the outcomes for the 15 million people across the country with superannuation."

The Productivity Commission has also maintained advice from its earlier report to grapple with the high number of unintended multiple accounts Australians hold.

About a third of accounts, or 10 million, are accidental multiples, the authority's investigation found.

Consumer advocacy group Choice said the report is a "clarion call" for lawmakers to fix the outdated system.

"We need the federal government and all political parties to back reform that will leave Australians with more money in retirement," chief executive Alan Kirkland said.

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