Federal Parliament has started to act against superannuation trustees overseeing underperforming funds or products, yesterday finally passing the Treasury Laws Amendments (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill.
The Bill was originally introduced to Parliament 18 months ago but underwent amendments to strengthen it in the wake of both the Productivity Commission’s super report and the Banking Royal Commission’s findings last year.
The amendments included requirements for performance benchmarking of individual MySuper and Choice options, fund level assessments to expose product complexity and issues with scale, and disclosure of hidden investment costs.
The Bill would also see the Australian Prudential Regulation Authority’s (APRA’s) powers to deal with related entities in vertically integrated institutions enhanced, adding to the tougher civil and criminal penalties trustees breaching their fiduciary duties were already facing.
Industry Super Australia deputy chief executive, Matt Linden, said these changes would “end the super gravy train”, “put[ting] the acid on trustees to perform or exit the industry”.
“This sets out the regulatory framework that will pave the way to weed out dud, underperforming super funds and products [and giving consumers confidence their savings are being invested in better performing products,” he said.
Parliament also passed the Treasury Amendment Laws (Design and Distribution Obligations and Product Intervention Power) yesterday, which Linden believed would also help protect super fund members and consumers.