Paul Costello will review default funds

An eight month review by a government-appointed panel on default superannuation funds is expected to begin next month.

The Productivity Commission will be tasked with designing a process for the selection and ongoing assessment of superannuation funds nominated as default funds.

“It seeks to develop transparent and objective criteria against which funds wishing to be eligible for default fund status can be assessed,” says a joint statement by the Minister for Financial Services and Superannuation Bill Shorten and Assistant Treasurer Mark Arbib.

Paul Costello, who was chair of the Stronger Super Peak Consultative Group and general manager of the Future Fund, has been named a part-time associate commissioner. He will assist on the inquiry.

The commission will hold public hearings and release a draft report for public comment.

Financial Services Council chief executive John Brogden says the current process of selecting superannuation funds was a a “closed shop, anti-competitive and failed to protect consumers.”

“Opening the default market to competition and creating a level playing field between all MySuper funds is crucial to ensuring fees continue to be driven down,” says Brogden in a statement. “This review is long overdue.”

BT Financial Group’s head of superannuation Melanie Evans says the certain funds are excluded as a defualt superannuation fund.

“We believe this needs to changed,” says evans in a statement. “There is a need to introduce greater transparency.”