The Cooper superannuation review has held a highly interventionist method to regulation after enumerating extensive cases of market failure in Australia's $1.3 trillion superannuation industry.

Superannuation Minister Chris Bowen said he honoured the two key findings of the report, MySuper and SuperStream.

Review chairman Jeremy Cooper has used proposals that require superannuation funds to provide consumers low-cost MySuper funds as compulsory default funds for superannuation investors.

Based on the recommendations, the Australian Prudential Regulation Authority would be tasked to police the entry of funds into MySuper.

APRA's role would include calculating whether funds could meet MySuper benchmarks such as the necessary scale to provide funds at a cost 40 per cent lower than the current average.

''MySuper providers would be exposed to scrutiny and pressure on this issue and would be required to consider each year whether they had sufficient scale,'' according to the report.

The review also wanted to terminate several other unfriendly industry features, including a prohibition on commissions on insurance products and ending investors being unwillingly ''flipped'' into more expensive products.
The report reached its 177 recommendations after recognizing how superannuation industry settings created in 1993 had failed to deliver adequate services for investors.

Instead of depending on the ''efficient markets'' hypothesis of a rational investor acting rationally, adopted by the Wallis inquiry of 1997, the report found the assumption and disclosure was not able to offer a competitive, transparent market.

''Competition has not effectively driven prices down far enough or created the efficiencies that we think are quite easily available to it,'' said Mr Cooper.