Fee rules

New investment-manager fee rules aiming to align performance targets with the long-term nature of superannuation investing could also be part of MySuper.

The government proposes that performance fees, paid to managers once they reach agreed return targets, be subject to checks against excessive risk-taking with long-term capital. These may include “claw back” provisions, which recoup past performance fees to compensate for poor current performance, and “high-water marks”, which require managers to recover losses before becoming eligible for performance fees.

Other changes in fee rules will ensure that MySuper funds be banned from paying commissions to financial advisers or charging entry fees to investors. Only cost-recovery fees will apply to members switching between options, exiting the fund and for incurring buy-sell spreads.

MySuper funds will exclusively form the list of funds eligible for modern industrial awards.