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NEW SUPER REFORMS AIM FOR INCREASED TRANSPARENCY AND ACCOUNTABILITY

Wednesday, 23 August 2017

The Minister for Revenue and Financial Services, Kelly O’Dwyer, has announced that the Government will introduce legislation to give fund members more power over their superannuation providers.

The changes will require MySuper and other funds to hold members’ annual general meetings and to publish greater disclosure information about fees and decision making processes.

“This comprehensive package will help deliver all Australians a strong and modern superannuation system that is solely focused on outcomes for Australians who rely on these funds to secure their retirement,” the minister said.

“The package includes measures that:
- Make superannuation providers more accountable to consumers through the introduction of annual member meetings. This is already a longstanding requirement for the public companies in which superannuation funds invest their members’ money.

Require funds to report and publish annually more transparent information on how their fund is being managed, including information on how the fund sets its fees and the way it spends members’ money.

- Strengthen default MySuper products including a stronger annual assessment of MySuper product outcomes to ensure the investment and insurance strategies, fees, scale and returns are promoting the financial interests of MySuper members.

- Close a legal loophole that has been used by unscrupulous employers to short-change employees who choose to make salary sacrifice contributions into their superannuation accounts.

- Give APRA more capacity to take preventive and corrective action if it has prudential concerns about a fund or if a fund is not acting in the best interests of members.

- Give APRA greater capacity to refuse or cancel a MySuper authorisation where it believes a licensee will fail to meet its obligations.

- Provide stronger protection for consumers by requiring APRA approval before transferring ownership or control of a licensee to operate a fund.

- Will make directors of superannuation funds who breach their duties to members subject to the same civil and criminal penalties as directors of ordinary managed investment schemes.”

The minister said, “The package has been developed with a clear objective to improve outcomes for consumers. The Government believes that, given the compulsory nature of superannuation, Australians rightly expect the industry to be held to the highest standards of transparency and accountability.

The Turnbull Government has also tasked APRA with making it easier for consumers to opt-out of automatic life and disability insurance policies provided through superannuation.
“The package does not make any changes to the taxation treatment of people’s superannuation,” the minister said. “Many of the measures in this package have been recommended by past reviews into superannuation, commissioned by both Coalition and Labor governments. These are sensible reforms that are already being embedded in the practices of high performing funds,” the minister said.

The draft bill and explanatory memorandum are available on the Treasury website (see link below).

 

Click below to view source

Ministerial media release: Reforms to give consumers more power at the heart of a stronger superannuation system

Treasury: Exposure Draft - Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017

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