The Cooper Review, formally known as the Super System Review, was an independent inquiry commissioned by the Australian Government in 2009 to examine the efficiency and effectiveness of Australia's superannuation system. Chaired by financial services expert Jeremy Cooper, the review aimed to identify ways to make the system more transparent, efficient, and better serve the interests of superannuation fund members.
Background and Mandate By 2009, Australia's superannuation system had grown into one of the largest and most complex pension systems globally, with significant assets under management. However, concerns had emerged regarding its complexity, high fees, lack of transparency, and the potential for members to be in underperforming funds, particularly following the Global Financial Crisis. The government tasked the Cooper Review with:
- Assessing the system's structure, governance, and administration.
- Evaluating the default superannuation arrangements.
- Considering the role of financial advice within the superannuation context.
- Proposing reforms to enhance member outcomes and system efficiency.
Key Recommendations The Cooper Review delivered its final report in June 2010, making over 100 recommendations. Some of the most significant included:
- MySuper: The introduction of a new class of simple, low-cost, and transparent default superannuation products, designed for members who do not actively choose a super fund. These products would feature a single diversified investment option, fewer fees, and clearer disclosure.
- Increased Transparency and Disclosure: Recommendations for super funds to provide clearer and more standardized information to members regarding fees, investment performance, and conflicts of interest.
- Improved Governance: Proposals for enhanced governance standards for superannuation trustees, including board composition, risk management, and member representation.
- SuperStream: A push for greater standardization and automation of superannuation data and payment processing to reduce administrative costs and errors across the industry.
- Financial Advice: Suggestions for improving the quality and accessibility of financial advice related to superannuation, ensuring it is in members' best interests.
- Retirement Income: A focus on how the superannuation system could better support members transitioning into and living in retirement.
Outcomes and Impact The Cooper Review had a profound impact on the Australian superannuation landscape. Many of its key recommendations were subsequently adopted and implemented through legislative reforms, most notably:
- MySuper: Legislation was passed to introduce MySuper products, which became mandatory for default superannuation contributions from 2014. MySuper aimed to address the issues of excessive fees and complex investment options in the default segment of the market.
- SuperStream: The SuperStream data standard was gradually implemented, leading to significant efficiencies in superannuation contributions and rollovers.
- Stronger Super Reforms: The government's "Stronger Super" package of reforms incorporated many of the Cooper Review's proposals, including enhanced governance standards for super funds and increased transparency requirements.
The Cooper Review is widely regarded as a pivotal moment in the ongoing evolution of Australia's superannuation system, driving reforms that aimed to improve efficiency, transparency, and ultimately, retirement outcomes for millions of Australians.