Super bills ‘leave pass’ for banks
Superannuation bills reintroduced by the Federal Government into Parliament yesterday pose a risk to the not-for-profit superannuation sector and give the banks a “leave pass” on new transparency and disclosure requirements, according to Industry Super Australia (ISA).
Responding to the government’s reintroduction of the bill, ISA argued the government’s agenda was not about improving governance and transparency but furthering the commercial interests of the banks.
“The Strengthening Trustee Arrangements Bill will dismantle the successful industry super and not-for-profit super governance model,” ISA said.
“The Improving Accountability and Member Outcomes in Superannuation Bill 2017 will enhance trustee obligations and regulatory powers in the default super sector but not 83 per cent of retail sector assets dominated by big bank-owned funds.”
The government’s package includes making super funds more transparent on how they spend members’ money through new reporting of expenses, giving workers choice of their own super fund if they were currently prevented from doing so due to enterprise bargaining agreements or workplace determinations, and legislating a consistent minimum standard for one-third independent directors, including an independent chair.
ISA also argued the government had not presented any evidence their proposals would improve members’ returns.
“The evidence is clear: for the 10 years to 30 June 2017, SuperRatings monthly data shows, on average industry super funds have outperformed bank-owned super funds by more than two per cent a year,” it said.
It also cited examples where banks have had to provide customers compensation including ANZ paying an extra $10.5 million to 160,000 customers after the Australian Securities and Investments Commission (ASIC) found it had incorrectly processed members’ super contributions and failed to deal with lost inactive member balances correctly.
It also cited the Commonwealth Bank (CBA) having to repay an estimated $105.6 million for charging fees where no advice was provided.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
