AYB240 Lecture Notes - The Australia Institute, Universal Default, Financial Literacy
Document Summary
Lecture 7: member decision making fund and investment choice. Two types of choices: which superannuation fund to join, choose an investment option within their chosen superannuation fund. In 1996 - coalition policy to introduce fund choice. In 1997 newly elected coalition government moved to implement choice policy: rationale for choice of fund. Increase competition and efficiency in the superannuation industry. Lead to improved returns on superannuation savings. Place downward pressure on fund admin charges: during following years several attempts to introduce choice. Two senate committee inquiries ; a round table discussion; wide-ranging consultation with superannuation industry leaders and others: consensus on proposals not reached, choice not opposed but concerns about. Choice of fund legislation passed in 2004 with support of minority parties in the senate: came into effect 1 july 2005. Employers required to offer employees choice of fund. Included in the superannuation guarantee (administration) act 1992: commenced 1 july 2005. Generally applies where 9% superannuation guarantee contributions are required.
