Kyle Purcell, Your Money, 29 April 2019
How a $64K super loss launched a super business
The shock realisation that led to a light-bulb moment.
Like almost half of all Australians, Mark MacLeod joined his employer’s default superannuation fund without a second thought.
Years later, he got a nasty surprise when he realised his under-performing fund had eaten into $64,000 of his balance over just a short period of his working life.
While that kind of loss would be devastating for anyone, MacLeod told Your Money Live that it was the shock that spurred him into action.
“Instead of just leaving it there, I decided I’d do some further research into the default super market,” he said.
He wanted to work out what could be done to help other people that had been ripped off by the system – not an uncommon scenario as he soon found out.
In January, a Productivity Commission report into the sector found a number of issues including high fees and poor investment options had resulted in chronic under-performance of many super funds.
“According to the Productivity Commission, this is a complete market failure,” said MacLeod.
Read: How the super industry reacted to calls for reform
That realisation is part of what led MacLeod to develop his platform, Roll-It Super, which offers employees access to a wide range of superannuation and investment choices on the market.
He thinks it can help to resolve what he believes is one of the major underlying problems in system: default super.
While the system was developed as a way to ensure all employers had universal access to super, MacLeod argues that it has instead created a monopoly.
Last week, Australian retail store Kmart came under fire after it was found to have locked some of its staff members into the REST super fund as part of a controversial new agreement.
That’s a situation MacLeod says companies should be actively trying to avoid.
“Transparency in the market and people having to compete for your superannuation money is how you get efficient market outcomes and a better outcome for consumers,” he says.
“With something like Kmart, choice and competition is getting removed and effectively there is a monopoly in place.”
To avoid this, MacLeod says Australians need to have completely unbiased access to super fund options – something he says his new platform offers.
“We knew that getting people actively involved in their super was a workplace issue and so we wanted to help employers, instead of providing employees with one default option.”