The Productivity Commission’s review into the competitiveness and efficiency of Australia’s superannuation system is underway with public consultation now occurring.
Industry participants will be relieved, however, that this first round of consultation will not produce anything drastic – the Productivity Commission is only consulting on its present mandate to develop assessment criteria by November 2016 ahead of a full review into the superannuation system to commence after 1 July 2017, on which we have previously reported.
Accompanying the call for public submissions is an issues paper to highlight relevant research and market issues as a guide for those making a submission to the public consultation. Although the Productivity Commission has posed a wide range questions on the topics of competition and allocative, operational and dynamic efficiency, we anticipate a wide divergence in public opinion on many of the questions posed, including:
- What is the degree of substitutability between different types of superannuation funds and products?
- How would you measure the extent of competitive pressure from the SMSF segment on the rest of the superannuation system?
- What are the most reliable and relevant assessment criteria for benchmarking operational efficiency of the superannuation system?
- What elements of regulation have the greatest effect on the operational efficiency of the system and which aspects of operations are affected?
- How can the magnitude and cost of principal-agent problems be assessed?
- What are the most important behavioural biases and cognitive constraints affecting the key superannuation saving, investment and withdrawal decisions of users?
- What are the key impediments to dynamic efficiency and how could they be measured?
Submissions can be made to the Productivity Commission’s consultation until 20 April 2016.