SINGAPORE (Jan 14): Australia’s A$2.8 trillion ($2.7 trillion) pension system faces a potential shake-up after a government review said underperforming funds should be closed and recommended that new employees be allowed to choose from a list of the 10 best-performing funds.

In its final report released on Jan 10, the Productivity Commission said default investment options that have lagged over eight years should be withdrawn unless they improve over 12 months.

While the government is not obliged to adopt the recommendations, an overhaul of the industry that has been under intense scrutiny in the past year seems inevitable.

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