Assuming Cooper’s key recommendations are effectively implemented most Australian workers should – at least in theory – be better off in retirement.

One of Jeremy Cooper’s central aims was to design a system that delivered low-cost, commission-free super to most Australians regardless of their level of engagement. If Cooper succeeds on this front, then he will have achieved a fundamental shift in the way our compulsory super system operates. Already we have seen some retail funds respond to the Review’s preliminary findings by launching new products that replicate the key features of not-forprofit funds.

For the millions of workers who belong to low-cost not-forprofit funds, the benefits of some of Cooper’s recommendations will mainly arise from Cooper’s recommendations on improving system efficiencies and the provision of intra-fund advice. It’s been estimated that efficiency measures – which include modernising back-office operations, promoting the uptake of e-commerce processing procedures among employers and broadening the use of the Tax File Number for use in member identification – could be worth thousands of dollars at retirement for the average fund member.

Just how long it takes before the benefits of such reforms translate into real value for members, remains to be seen. All reforms have implementation costs and should these costs blow out, member end benefits will be eroded, rather than boosted, in the short term. Another concern for the notfor- profit sector is Cooper’s reform agenda on the governance front. In a recent speech, Jeremy Cooper, noted that good governance was “generally the solution” to fixing problems in the super industry.

Most trustee directors of not-for-profit funds would wholeheartedly agree, which is why many are scratching their heads over Cooper’s recommendation to dilute the model of governance – the so-called equal representation trustee system – which lies at the heart of not-for-profit superannuation. It is this system of governance that has driven down costs, increased competition, and established new and innovative investment vehicles. Without it, we’d all be paying high fees to financial institutions and trailing commissions to financial advisors.

There is no hard evidence to suggest that equal representation is failing fund members. To the contrary, the available quantitative and independent evidence points to the equal representation system outperforming every other governance system in the land in addition to those in operation overseas that have led to spectacular pension system failures. It’s a well-known fact that not-for-profit funds dominated performance league tables for the past decade. They have a proven track record of driving a hard bargain on fees for services and delivering these gains back to members. Anyone who doubts such claims only has turn to the latest research from APRA – into the outsourcing arrangements of 112 super funds – which puts into sharp focus the extent to which bank-owned super funds use outsourcing of services to related parties to generate profits at the expense of their members.

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