In this edition:
Research and submissions
ASFA made a submission to Treasury in response to the exposure draft of the Superannuation Industry (Supervision) Amendment (Your Future, Your Super – Addressing Underperformance in Superannuation) Regulations 2023. ASFA supports the need for an objective test that assesses and benchmarks the performance of superannuation products. In the submission ASFA expresses support for some of the proposed changes, however notes that others should be revised including the draft ‘pro-forma’ notification letter to members where a product(s) has failed the performance test.
ASFA made a submission in response to the consultation on updates to the Australian Financial Complaints Authority’s (AFCA’s) Approach to claims for non-financial loss. In the submission ASFA welcomed the amendments proposed to be made to AFCA’s Approach to non-financial loss claims. The submission also highlighted that the wording in the current version of the Approach may cause confusion and could create unrealistic expectations for a complainant in terms of the potential outcome of their complaint.
ASFA made a submission in response to the Consultation Paper: Better targeted superannuation concessions (Consultation Paper). In the submission ASFA expressed support for the measures to improve the equity and long-term sustainability of the superannuation system. The submission supported a focus on minimising the compliance burden and cost that may be imposed on funds.
ASFA made a submission in response to the Committee’s inquiry into the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (the Bill). This submission focuses on Schedule 3, which contains amendments introducing an entitlement to superannuation in the National Employment Standards. ASFA supports measures to address the issue of unpaid Superannuation Guarantee contributions, highlighting in the submission that unpaid superannuation contributions come at a significant cost to superannuation member retirement outcomes.
ASFA made a submission in response to the exposure draft Treasury Laws Amendment (Measures for Future Bills) Bill 2023: Thin capitalisation interest limitation (Draft Bill). In the submission ASFA welcomed the carve-out of complying superannuation entities (that is, both complying superannuation funds and pooled superannuation trusts) from the operation of the proposed rules. However, ASFA has called for greater certainty as to the operation of this carve-out.
ASFA made a submission in response to the consultation on the Government’s response to the Privacy Act Review Report. The submission was broadly supportive, however did call for consideration to be given to Fraud and the timing of the implementation.
International policy update
In late March US President Joe Biden used his first presidential veto to reject legislation which proposed to prevent US pension fund managers from basing investment decisions on environmental, social and corporate governance (ESG) factors. The Republican sponsored Bill, which passed Congress before being subject to veto, would have overturned an existing US Department of Labor rule which makes it easier for employer retirement plan managers to consider ESG issues for investments in companies, and shareholder rights decisions such as through proxy voting.
President Macron signed into law his government’s pension reforms that raise the retirement age gradually from age 62 to 64 by 2030. This followed the decision of the Constitutional Council – France’s highest constitutional authority – to rule in favour of the change, although the Council rejected other minor elements of the government’s reform package. The Council’s ruling re-ignited mass public protests in opposition to the reforms.
There are ongoing concerns in South Korea about their cost and adequacy of retirement income arrangements. Korea is currently facing various issues, such as a declining birth rate and a decrease in the working-age population, which highlight the need for pension reform, and the Korean Government is exploring various directions for pension reform and preparing alternatives accordingly.
Media
ASFA’s Retirement Standard was featured in articles in the West Australian and Money Magazine.
Results of the 2023 ASFA Member Survey were featured in articles in Financial Newswire, Super Review, Investment Magazine, Financial Standard and The Daily Telegraph.
ASFA’s support for the proposal to mandate the payment of superannuation in alignment with wages was featured in articles in Financial Newswire, Super Review and Financial Standard.
ASFA’s submission on the Thin Capitalisation Rules was featured in an article in Financial Newswire.
ASFA’s submission to AFCA regarding the non-financial loss issue was featured in an article in Financial Newswire.
Events and Learning
The ASFA team will be delivering the following events, discussion groups and learning workshops in May:
- RG 146 Virtual Workshop: 15, 17, 19 May
- Stephen Jones Briefing, Sydney: 17 May
- VIC Member Insured Discussion Group: 23 May
- RG 146 Face-to-Face Workshop, Melbourne: 24 & 25 May
- RG 146 Superannuation Refresher Virtual Workshop: 30 May
- SMSF Discussion Group: 30 May
- VIC/WA Member Services Discussion Group: 31 May
