The Financial System Inquiry has made seven recommendations in its final report to government with direct reference to superannuation. All of these plus one observation on taxation (which was outside the scope of its inquiry) are listed below. In reviewing the report yesterday, Pauline Vamos, chief executive of the Association of Superannuation Funds of Australia calculated that 28 of the reports 44 recommendations had some bearing on superannuation. Amongst these are recommendations on ASIC, impact investing and corporate bonds.
What is the objective of superannuation
“Seek broad political agreement for, and enshrine in legislation, the objectives of the superannuation system and report publicly on how policy proposals are consistent with achieving these objectives over the long term.”
Greater competition in MySuper
“Introduce a formal competitive process to allocate new default fund members to MySuper products, unless a review by 2020 concludes that the Stronger Super reforms have been effective in significantly improving competition and efficiency in the superannuation system.”
All funds to have a pre-selected retirement product
“Require superannuation trustees to pre-select a comprehensive income product for members’ retirement. The product would commence on the member’s instruction, or the member may choose to take their benefits in another way. Impediments to product development should be removed.”
Greater member choice
“Provide all employees with the ability to choose the fund into which their Superannuation Guarantee contributions are paid.”
Funds to have a majority of independent trustees
“Mandate a majority of independent directors on the board of corporate trustees of public offer superannuation funds, including an independent chair; align the director penalty regime with managed investment schemes; and strengthen the conflict of interest requirements.”
Direct borrowing to end
“Government should restore the general prohibition on direct borrowing by superannuation funds by removing Section 67A of the Superannuation Industry (Supervision) Act 1993 (SIS Act) on a prospective basis.”
Retirement income projections for all
“Publish retirement income projections on member statements from defined contribution superannuation schemes using Australian Securities and Investments Commission (ASIC) regulatory guidance. Facilitate access to consolidated superannuation information from the Australian Taxation Office to use with ASIC’s and superannuation funds’ retirement income projection calculators.”
