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Labor welcomes research on super fee disclosure.



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SENATOR NICK SHERRY

SHADOW MINISTER FOR RETIREMENT INCOMES AND SAVINGS

MEDIA RELEASE 6 May 2003

Labor welcomes research on super fee disclosure

Labor welcomes the release of research by the Association of Superannuation Funds of Australia (ASFA) on fee disclosure.

It is clearly time for the Government to act on ensuring consumers have access to meaningful information on fund fees and charges.

The ASFA testing based on a group of consumers found the following:

É The Government’s now abandoned disclosure model was confusing and unhelpful; É Clear tables showing the impact of fees over time were useful; É Percentage figures should be shown with dollar examples; É Past-performance figures could mislead consumers about future returns; and É Disclosure must be in plain English, not financial jargon.

These are many of the things Labor has called for all along to ensure Australians know what they are paying on their super.

The need for better disclosure is clear from the ANZ study of adult financial literacy, released last week, where more than half of those surveyed did not understand superannuation fees and charges.

ASFA has presented an effective model for fee disclosure involving the comparison of fees over time. The Government should consider this, and similar models, as an urgent priority.

In September last year, the Government failed consumers by refusing to negotiate a better model for fee disclosure. As a result, their flawed regulations were disallowed by the Senate. Since then, they have taken the lazy approach of letting the superannuation and financial services industry sort out disclosure themselves.

This light-touch approach is not good enough. The Government must act now implement compulsory, industry-wide, disclosure standards.

Of course, fee disclosure by itself is not sufficient. The Government must also act to ban exit fees and advisor commissions on compulsory superannuation.

For more information or comment please contact: Senator Nick Sherry 0418 482 807 Scott McNamara (03) 6424 8241 or 0409 210 688