Super reforms “super” Industry funds

Superannuation fund members can expect bigger payouts on retirement, if planned new curbs on commissions become law, according to industry insiders.

The planned curbs are part of the Federal government’s MySuper reforms, which will soon be debated by Parliament.

Australians have invested more than $1.2 trillion in superannuation.

An exposure draft of the proposed legislation has just been released.

The union based Industry Superannuation Network (ISN) welcomed the proposed changes, saying that – if the bill becomes law it “will bring an end to costly commissions on compulsory superannuation.”

Private funds also welcomed the government’s plan to give the Australian Prudential Regulation Authority power to regulate the industry.

This, too, is part of the proposed reforms.

However the Australian Superannuation Funds Association (ASFA), which represents the private funds, make no specific comment on commissions in its statement.

?The ISN’s Chief Policy Adviser, Matt Linden, said the planned ban on the financial inducements that private super funds once traditionally offered to the financial planners, who bring them new business, would have been “unthinkable” just a few years ago.

But that had changed.

??”Now there is virtually unanimous agreement that financial inducements from product providers to planners must end,” Mr Linden said.
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“This is a giant step forward for the professionalisation of the industry,” he declared.

“Industry Super Network looks forward to working with the Government on the fine detail of the legislation released today to ensure it achieves all of the intended policy objectives,” Mr Linden added.

ASFA chief executive officer, Pauline Vamos, said her association had supported APRA having a standard making power for the superannuation industry for some time.

“So we are pleased to see the beginning of the consultation period,” Ms Vamos said.
 
“The superannuation system is an important delivery mechanism for both social and economic policy,” she added.

” It is right at this time, with the growth of the sector and its responsibility for delivering in post-retirement, that its regulatory framework has a similar footing to the banking and insurance industries.
 

While standards of governance and disclosure are already high in the superannuation sector, the new prudential standards will both formalise – and document – what fund trustees should be doing.
 
“Current disclosure requirements can make it difficult for trustees to provide simple, open disclosure – it is time to revisit this area,” Ms Vamos said.
 
“We will be carefully reviewing the Discussion Paper in consultation with our members over the coming weeks, looking in detail at what is specifically being proposed,” she added.?