Productivity Commission just added more bureaucracy - lawyer
The Productivity Commission's recommendations around default funds under modern awards have added yet another layer of bureaucracy to an industry already struggling with multiple agendas and a crippling reform agenda, according to a partner with law firm Holding Redlich, Jenny Wilcocks.
Wilcocks pointed to the level of work being undertaken by funds to comply with the Government's Stronger Super changes.
She said if the Productivity Commission's recommendations were accepted these funds faced a secondary regulatory hurdle if they wished to retain their default fund status within a modern award.
She said that, effectively, funds seeking to retain default fund status would be forced to undergo a second investigation largely applying the same criteria already fully investigated by the Australian Prudential Regulation Authority (APRA), but under a different regulator applying different regulation.
Wilcocks said it was possible a fund could pass muster with APRA with respect to MySuper but fail with respect to the Default Superannuation Panel (DSP) within Fair Work Australia.
She said that even if a fund succeeded in its application by being selected as a default fund, it could still be disadvantaged if the DSP chose to identify those funds it considered to be best.
"Funds applying for a MySuper authorisation will incur considerable expense in obtaining APRA's authorisation," Wilcocks said.
"That authorisation will be of little use to a superannuation fund that loses its status as a default fund in modern awards."
AUTHOR
Staff Writer
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.
