Industry superannuation funds should not be required to cross-subsidise financial planners and others who appear before the newly-constituted Australian Financial Complaints Authority (AFCA), according to the Australian Institute of Superannuation Trustees (AIST).
On the same day that the chair of the AFCA, former Liberal minister, Helen Coonan confirmed that AFCA would be funded by an APRA-style levy, the AIST warned against cross-subsidies by stakeholders, including superannuation funds.
AIST chief executive, Eva Scheerlinck, said there was a moral and legal obligation on super funds to ensure that members’ savings were not used to fund the resolution of complaints in other areas of the finance sector.
“It would be unacceptable, inequitable and unfair if members’ retirement savings were used to fund the resolution of disputes unrelated to superannuation, such as complaints against banks and financial advisers,” Scheerlinck said.
AIST’s submission to AFCA also raised concerns about a lack of transparency in AFCA’s proposed funding models for three different stages covering transition, interim and long-term funding.
“We request that AFCA release detailed cost projections for each dispute resolution stream to enable super funds to better understand how members’ savings are going to be used and how much will be collected from each industry sector providing the funding,” Scheerlinck said.
Comments
But it is OK to fund the Unions. Good thinking AIST
I'm sure the industry funds believe their in-house financial planners are immune from providing inappropriate advice, particularly as they act in the best interest of their members recommending to retain their default fund.
They are immune because ASIC has never audited financial advice provided by Industry Super Fund in-house planners.
" a moral and legal obligation on super funds to ensure that member's savings were not used to fund the resolution of complaints in other areas of the finance sector" ??????
But it is ok that between 2013/14 to 2016/17, a total of $26.14 million of Industry Fund member money was paid to third parties and of that amount, a total of $18,438,516 was paid to Trade Unions !
I have no doubt the Industry Super funds are able to argue all payments are legal, but how do they argue that these payments are morally acceptable and within the definition of the Sole Purpose Test ?
The volume of member monies that flow out of Industry Super to fund an ideological supporter base in the form of the Trade Unions is against the purpose of superannuation and the Govt should have the courage and guts to stand up and put an end to it.
Unfortunately, I am unsure as to whether Malcolm in the Middle really has the fight in him to take it up to them and make it happen.
It seems lately he is eminently more comfortable being seen in an Akubra hat with his sleeves rolled up making out that he is everyone's man.
Take it up to the Trade Unions Malcolm and you will need to leave your sleeves rolled up for the punch up that will undoubtedly ensue. They will not let the super cash cow go without a massive and ugly attack.
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