It will be unfortunate if, in its bid to make superannuation simpler, more streamlined and understandable, the Productivity Commission ends up making it more complex and opaque.
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This would appear to be a possibility under the report released by commission chairman, Peter Harris, earlier this week.
Its recommendations, he was quick to assure us, had been framed with the best of possible intentions. One goal was to give Australians entering the workforce a real choice about what fund to enter.
This would entail ending the virtual monopoly most union linked "industry funds" have on the retirement investments of new entries at workplaces that come under an enterprise bargaining agreement.
Another goal was to eliminate the collection of multiple super funds, some with minuscule balances and all with recurrent fees, by workers as they change jobs and even industries over a working lifetime.
The commission, noting at least 40 per cent of workers had more than one scheme, said the waste totalled a staggering $150 million for every 500,000 to 600,000 duplicate accounts.
Mr Harris attempted to pre-empt the inevitable storm of criticism over the push to delink super fund choices from EBAs, employer preferences and the like.
"The only thing that seems to unite the superannuation industry (whether industry or retail funds) is its opposition to the hideous prospect of having to compete for work," he said.
The commission wants all workers to be allocated a default fund which they could stay in for life or change once they had shopped around and made a more informed decision.
So far, so good. Unfortunately, as with most things designed by a commission or a committee, a horse can come out looking like a camel. In this instance the camel is the four different options covering how the default fund should be chosen.
They range from allowing either the employer or the employee to choose from a list of government sanctioned funds, defaulting disinterested employees into a government "last resort" fund or invoking a complex tender process to determine what institution would be the national default fund for a set period.
None of these choices are idiot proof. The last appears to be fraught with commercial and political risk.
Several commentators, including Sky's Peter Switzer, picked up on these flaws almost immediately.
"The simple process is to change the rule so you stay in your first selected fund (regardless of future job changes) and let the worker decide which fund he or she goes into," he said on Wednesday.
This makes a lot of sense so long as workers have the right to switch funds of their own volition at any time in the future.
The appropriate role of government in this instance is to ensure individuals have the information they need to make informed choices; not to invoke the nanny state by telling people how they must invest their money.
