The Cooper Review - what's it all about?

Provided by Mercer. The information in this article does not necessarily reflect the views of the Trustee.

We've been hearing a lot about the Cooper Review released recently by the Government- we'll tell you what it's all about.

First of all, let's take a look at the intention of the Review. On 29 May 2009, the Government asked Jeremy Cooper (former Deputy Chairman of the Australia Securities and Investments Commission) together with a Panel of experts to review the governance, efficiency, structure and operation of the Australian superannuation system. That meant taking a close look at every facet of superannuation with the ultimate goal of improving the retirement savings of all Australians.

The Panel handed their Final Report to the Government on 30 June 2010 and it was released publically on 5 July 2010. The Panel delivered 177 recommendations in its report, which were broken up into 10 'packages' or key themes.

The full report is available at, however here we highlight two of the key packages that were presented - MySuper and SuperStream.

What is My Super?

MySuper, is designed to be a simple, efficient superannuation product for the majority of super fund members for the whole of their life. It's designed for those people who are comfortable to hand the decision making about their super to someone else. It's intended that MySuper members would "receive the protection afforded by the duties imposed on a traditional trustee who is a fiduciary acting single mindedly in the best financial interests of members"*.

Broadly, MySuper members would be in a product that offers them one diversified investment strategy which would provide insurance on an opt out basis, however the product would have very few other features. It is also envisaged that there would be a limited role for external advice because "intra-fund advice would be 'embedded' in the product"** and also due to the fact that there would be limited choices to be made by members. In addition, the trustees of MySuper products would not being able to pay or fund any product-based up-front or trailing commissions or other similar payments- by curbing payment of commission it is intended that the fees payable by members would be limited.

It is also intended to provide MySuper members with standardised reporting, so they can understand how their superannuation fund is performing and to also provide retirement benefit projections so they can see how they are tracking towards their retirement savings goal.

Whilst MySuper offers a super arrangement for people who are comfortable with a "hands off" approach to their superannuation, members can still choose a different super arrangement which involves more active decision making (such as being able to choose their own investment strategy) and participation in their retirement savings. Further, self managed superannuation funds will still form an important element of the superannuation market.

This provides the option for members to be engaged as much or as little with their super as they want.

What is SuperStream?

SuperStream is the name the Panel chose to describe their ideas about enhancing the 'back office' operations of superannuation. SuperStream focuses on transforming and standardising back office operations across the industry to improve efficiency and accuracy. This includes improving the use of technology and e-commerce solutions in order to reduce paper-based transactions and thus the costs of running a super fund.

An important aspect is the use of Tax File Numbers (TFNs) as a unique identifier when locating members' lost accounts and when people take action to consolidate their super or switch between funds. Of course any use of TFNs will required strict privacy controls.

** Super System Review Final Report, "Chapter 1 – MySuper and choice architecture", page 20,
** ibid


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