LABOR has sparked a major fight with the superannuation industry by backing a plan to create a new no-frills "MySuper" account.
This new super account would help to slash member fees by up to 40 per cent, The Australian reported.
Superannuation Minister Chris Bowen yesterday flagged his support for an independent review that also called for the administration of the system to be cleaned up and modernised and tougher rules imposed on trustees.
Sections of the superannuation industry angrily rejected the plan for the mandatory MySuper product that would have to be offered to the 80 per cent of fund members who rely on a fund's default investment option.
And with superannuation looming as a key election battleground, the opposition reserved its position but backed the industry's concerns.
Led by former ASIC deputy chair Jeremy Cooper, the review provides a blueprint for the most wide-reaching reforms to the $1.3 trillion superannuation sector since the introduction of compulsory super in 1992.
If implemented, the changes would deliver an extra $40,000 to the final balance of the average member and eventually save the system about $2.7 billion a year.
Among its 174 recommendations, the report also called for the banning of commissions, including for insurance products, and for changes that would make it easier for consumers to compare super funds.
Mr Bowen said the government would release its response within two months but declared that superannuation needed to be "dragged into the 21st century".
"These recommendations go to giving Australians a better chance at a more comfortable, more dignified retirement ... through improving the efficiency of the system and reducing fees over their working life," he said.
Read more on The Australian.
