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AUSTRALIAN BANKERS' ASSOCIATION SAYS FREEDOM OF CHOICE CAN'T WAIT
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Sydney, 13 August, 2003: Australian Bankers’ Association (ABA) hopes that customers will soon be able to manage their superannuation account balances in the same way that they now take for granted the choices they can make in banking products and services.
In a submission to the Senate Select Committee on Superannuation, the ABA supports amending regulations to remove the impediments to superannuation portability, so that all customers are given the choice to consolidate their multiple accounts, and save on fees.
David Bell, Chief Executive of the ABA said: “We don’t know how many superannuation accounts customers would have if they were free to choose, but the more accounts they have the more likely it is that fees will add up. Therefore, there will be more incentive for customers to consolidate their accounts.”
“The ABA supports the changes, noting that together they are sensible in how they bring about choice and introduce greater competition.”
“If there are concerns about transaction costs in transferring from one account to another, or churning, then surely more competition and greater transparency is the answer - not less.”
“If the concern is that superannuation members are unable to compare fees and funds, and will make poor choices, then the solution is to deal directly with literacy, education and information, rather than restrict customers’ choices.”
“The ABA supports impartial and independent consumer education, to assist customers to make informed and responsible decisions, and to weigh up the benefits of greater choice.”
Portability is only the first step, as these regulations cannot address the problem of multiple accounts in its entirety without proposed choice legislation to enable employees to direct which fund their Superannuation Guarantee contributions are paid into.
Mr Bell said for consumers to enjoy portability of superannuation accounts depends on a bipartisan approach – in particular, recognition from the Australian Labor Party and the minor parties and independents in the Senate that these reforms are needed.
Note for editors:
For a copy of the Australian Bankers’ Association submission – please visit the website for the Senate Select Committee on Superannuation:
http://www.aph.gov.au/Senate/committee/superannuation_ctte/index.htm
For further information:
Heather Wellard
ABA Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
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