Regulator warns trustees to improve disclosure

The Australian Securities and Investments Commission (ASIC) is updating superannuation funds’ trustees to make sure they are meeting their disclosure oligations.

ASIC has added a section to the Frequently Asked Questions page on its website to clarify what trustees need to know in terms of updating members about material changes and significant events which might affect their benefits, following the introduction of choice of funds last year. Jennifer O’Donnell, executive director of compliance at ASIC, said any decision that affects a member’s investment, such as transferring a benefit without their consent, was a material change or significant event that had to be disclosed. That disclosure had to be made clearly and in a timely way that would get a member’s attention, such as a personally addressed letter, she said. “Delayed or obscured notices significantly affect a member’s ability to make an informed decision about whether to exercise their right to exit the fund,” O’Donnell said. She said signalling potential changes via a product disclosure statement was inadequate. Trustees might also need to provide comparative information to enable them to understand the impact of changes, such as when fees change, or insurance cost or cover is affected. Member benefits can be transferred without their consent, such as when they are moved into a successor fund, eligible rollover fund, or another category within the same fund.