The federal government has unveiled superannuation reforms that would make funds more accountable and increase penalties for rogue directors.
The package – which does not contain changes to tax rules – includes measures that would:
- Make superannuation providers more accountable through the introduction of annual member meetings
- Require funds to publish more information on how they set their fees and spend members’ money
- Strengthen MySuper products to ensure the fees and investment strategies promote members’ interests
- Close a legal loophole that some employers have used to short-change employees who make salary sacrifice contributions
- Give APRA more power to act if a fund is not acting in the best interests of members
- Give APRA more power to refuse or cancel a MySuper authorisation if it believes a licensee will fail to meet its obligations
- Increase penalties for directors of superannuation funds who breach their duties to members
The government has also tasked APRA with making it easier for consumers to opt out of automatic life insurance and disability insurance policies provided through superannuation.
Government talks up reforms
Kelly O’Dwyer, the minister for revenue and financial services, said the government recognised the importance of having a competitive and efficient superannuation system.
“This comprehensive package will help deliver all Australians a strong and modern superannuation system that is solely focused on outcomes for all Australians who rely on these funds to secure their retirement,” she said.
“This is why we tasked the Productivity Commission to undertake a review of the system last year. The government will consider if any further changes to improve the superannuation system are required in light of any recommendations made by the Productivity Commission.”
The public has until 11 August to make submissions on the proposed legislation.
More change needed, says lobby group
Industry Super Australia chief executive David Whiteley said the government’s proposed changes were good, but did not go far enough.
“We welcome the emphasis on transparency and accountability, and urge the regulator to use the powers to investigate the cause of bank-owned super fund chronic underperformance,” he said.
“This litmus test for this legislation will be the extent to which the regulator can now explain two decades of bank-owned super fund underperformance against industry super funds.
“The regulator must ascertain whether bank-owned super funds are prioritising shareholder interests over fund member interests, and the implications of this on retirement savings.”