THE Minister for Revenue and Financial Services Kelly O'Dwyer, announced today the Federal Government proposes overhauling Australia's superannuation legislation.
Under discussion is the role of providers and the prudential framework in delivering a more transparent and accountable compulsory retirement savings system.
"This comprehensive package will help deliver all Australians a strong and modern superannuation system that is solely focused on outcomes for all Australians who rely on these funds to secure their retirement," Ms O'Dwyer said.
The objective of the Superannuation Member Outcomes Package is to improve outcomes for consumers.
The package includes -
- Make superannuation providers more accountable to consumers through the introduction of annual member meetings. This is already a longstanding requirement for the public companies in which superannuation funds invest their members' money.
- Require funds to report and publish annually more transparent information on how their fund is being managed, including information on how the fund sets its fees and the way it spends members' money.
- Strengthen default MySuper products including a stronger annual assessment of MySuper product outcomes to ensure the investment and insurance strategies, fees, scale and returns are promoting the financial interests of MySuper members.
- Close a legal loophole that has been used by unscrupulous employers to short-change employees who choose to make salary sacrifice contributions into their superannuation accounts.
- Give APRA more capacity to take preventive and corrective action if it has prudential concerns about a fund or if a fund is not acting in the best interests of members.
- Give APRA greater capacity to refuse or cancel a MySuper authorisation where it believes a licensee will fail to meet its obligations.
- Provide stronger protection for consumers by requiring APRA approval before transferring ownership or control of a licensee to operate a fund.
- Will make directors of superannuation funds who breach their duties to members subject to the same civil and criminal penalties as directors of ordinary managed investment schemes.
- The Turnbull Government has also tasked APRA with making it easier for consumers to opt-out of automatic life and disability insurance policies provided through superannuation.
The package won't make any changes to the taxation treatment of people's superannuation.
Ms O'Dwyer said the Government recognises the importance of having a competitive and efficient superannuation system which has been in place since 1993 and is currently valued at about $2 trillion.
"This is why we tasked the Productivity Commission to undertake a review of the system last year," Ms O'Dwyer said.
"The Government will consider if any further changes to improve the superannuation system are required in light of any recommendations made by the Productivity Commission."
The Exposure Draft Bill and Explanatory Memorandum are available on the Treasury website with submissions be accepted until Friday, 11 August 2017.