SMSF Adviser first reported on the draft legislation of the proposal in December last year.
SMSFA chief executive Andrea Slattery said superannuation guarantee contributions are foregone income by employees and as such, each individual member should have the right to choose which fund should save and invest on their behalf.
“Giving people the right to choose where their superannuation contributions are made will give them the opportunity to become more engaged and informed about their retirement savings,” she said.
“It will allow them to select a superannuation fund that they believe best suits their circumstances and retirement savings goals.”
The association firmly believes choice of fund will improve the system’s efficiency because of the likely drop in the number of superannuation accounts people will hold, Ms Slattery said.
“At present, it is believed that most individuals have at least three accounts,” she said.
“This will help reduce the amount of fees and insurance premiums deducted from an individual’s superannuation, boosting their retirement income over the long term.”
Allowing all employees choice will reduce the need for people to transfer funds from their default fund account to their account of choice – such as an SMSF, retail fund or another industry fund – minimising costs and complexity, according to Ms Slattery.
“Choice of fund will also ensure that all funds are on a level playing field in acquiring and retaining members, ensuring healthy competition in the marketplace that will drive better outcomes for members,” she said.