In a draft report, the Productivity Commission has released its proposed framework to assess the efficiency and competitiveness of Australia's $2 trillion superannuation system.
Commissioner Angela MacRae said that a framework would allow an assessment of the super system in achieving its primary purpose, that is, to provide retirement income.
“Our superannuation system is large, complex and has broad reach. This means even small system improvements can offer significant financial benefits to Australian workers, particularly in their retirement.”
This study represents the first in three stages of superannuation work by the Commission.
“This is the first important step in our work. Undertaking a system-wide assessment of the competiveness and efficiency of our super system is challenging and novel. It has not been done before. Getting the foundations right matters most — and we know there are no silver bullets,” said Productivity Commission deputy chair Karen Chester.
The draft report proposes a comprehensive framework to be used in stage 3 to assess the super system's efficiency and competitiveness. The framework comprises system-level objectives, corresponding assessment criteria and a suite of performance indicators supporting each criterion.
The system-level objectives for superannuation identified by the Commission are specific to competition and efficiency and revolve around the best interests of members.
“Competition is not an end in itself. It will be assessed in terms of the benefits it can deliver for members,” said Chester.
The Commission is seeking feedback on whether the objectives, criteria and indicators are fit for purpose. The Commission will also be consulting with stakeholders via industry roundtables, and will be releasing a final report later in the year. National Seniors met with the Productivity Commission for the first stage earlier in 2016.