First State Super’s chief operating officer Graeme Arnott is concerned at the amount of MySuper regulations that remain unresolved as the launch date approaches. However, he has pledged to take the fund’s MySuper product live on July 1, unlike funds such as Sunsuper, which is delaying the launch of its products to more easily comply with last-minute changes to regulation. Arnott said the fund is on time so as not to inconvenience employer clients who are nervous about not being fully compliant.
Of particular concern
Matters that remain unresolved include the current consultation on regulations around the MySuper product dashboard and portfolio holdings.
First State is particularly concerned at whether it will have to classify three types of member instead of two and change its systems to match.
Arnott said questions remain unanswered over whether choice members who are partially invested in First State Super’s default fund are a MySuper member under the regulations or a choice member – a matter complicated when a MySuper product, such as First State’s, has a lifecycle investment strategy that changes depending on a member’s age.
“Because of the lead time, we are making calls now. We knew we had to launch on July 1 as we did not want to make it hard for employers, so they did not have to worry about compliance,” Arnott said.
Development and further delay
By contrast, Sunsuper is to delay its MySuper launch until later this year.
Andrew Nicholson, product manager at Sunsuper, said: “Given the large amount of legislative change this year and to ensure delivery of a compelling Sunsuper offering, we have allowed for additional time beyond July 1 for development and launch of our MySuper product.”
Nicholson added that he recognised that the disclosure of product dashboard and portfolio holdings remained a challenge and that the superannuation industry would need to work closely with the government to finalise these reforms.
David Haynes, project director at the Australian Institute of Superannuation Trustees, said one piece of good news for funds had been the Australian Prudential Regulation Authority’s proposal to delay the disclosure of full portfolio holdings until July 2014.
“We are pleased that the government has deferred implementation of portfolio holdings for six months because that will give the industry an opportunity to digest all the MySuper changes that are going through at the moment.”
Haynes said AIST’s position is not to generally call for delay, but notes “genuine issues that need to be worked through over a reasonable period of time”.
The current consultation for amendments to MySuper legislation closes to submissions on May 15.