ASFA submits Cooper Phase Three response
ASFA lodged its Cooper Phase Three submission on Friday 19 February. Further to the points raised in the joint submission (see below), ASFA highlighted five main issues –
- Insurance and its place within super – in particular, the benefits that default insurance cover provides outweigh the downside of super balances being eroded by premiums.
- As a minimum the $50,000 contributions cap for people over 50 needs to be extended for another 10 years. The $25,000 annual concessional contribution cap for people under age 50 should be increased to $50,000 and the $450 threshold for the payment of SG contributions should be removed.
- The FSR licensing exemption for accountants should be abolished
- That self managed superannuation fund (SMSF) auditors be placed on a Register of Approved SMSF Auditors that is administered by the ATO.
- The absence of naming conventions for SMSFs needs to be addressed.
The full ASFA response to Cooper Phase Three can be viewed here.
You can direct all questions and comments on the Cooper Review to Jon Echevarria of the ASFA Policy Team.
Joint response to Cooper’s “Choice Architecture”
Four of the leading bodies for Australia’s superannuation industry have called for the Cooper Review Panel to reconsider its ‘choice architecture’ recommendations from the Phase One Preliminary Report, saying they will not ultimately benefit members of funds.
ASFA, along with the Australian Institute of Superannuation Trustees, the Investment and Financial Services Association and the Corporate Super Association, took the unprecedented step of sending a joint submission to the Cooper Review on this issue.
The industry bodies acknowledge the need for governance structures that fit the circumstances and the needs of fund members, but have sent a clear message that the major structural changes proposed in the Report would adversely impact the industry. Some of the concerns expressed in the joint submission include -
- The proposal seeks to fundamentally alter the existing structure and as such will add to industry costs, not reduce them.
- The proposed model fails to recognise that those currently in a balanced or default fund are not necessarily disengaged with their superannuation. To determine the member’s level of engagement, which also depends on their age and stage of life, can be difficult and will more than likely require direct consultation with the member concerned.
- The proposed “universal option” with a “lifecycle investment” overlay makes assumptions for which the industry has serious misgivings, in particular as to the appropriateness of lifecycle funds.
- The Panel’s view that disconnected members should be provided with a conservative investment strategy appears to be counter intuitive as even the disengaged should also be growing their account balances.
The joint submission can be viewed here .