The Assistant Treasurer and Minister for Financial Services, Stephen Jones, has promised no more “regulatory shock” for the superannuation sector.
“What we’re keen to do is send the message, or continue the message we gave in opposition, [and that is] unless we’ve clearly identified something, we’re not going to load the sector with a whole bunch of regulatory shock,” he told SuperGuide.
In large part the minister expects to be processing the “wall of regulatory change” that occurred over the past four years under the previous government.
“All the Hayne Royal Commission Bills, together with the Design and Distribution Obligations, all of those bills need to be digested by the system, [that’s] absolutely critical,” he said.
“Managing members money in quite a volatile international environment is going to be a challenge as well. But we haven’t got a whole bunch of new things that we want to bring on the industry.”
One thing the new government will definitely be looking at, and which it promised to examine in its election campaign, is the performance test for superannuation funds under the Your Future, Your Super regulations brought in by the Morrison Government.
Those regulations require funds not meeting a performance test for two consecutive years to stop accepting new members and put contingency plans in place.
“The things we’ve identified that we absolutely know we’re going to do, will be a review of Your Future, Your Super benchmark [and] performance benchmarking in the super sector,” he said.
Jones has previously identified the unintended consequences or perverse outcomes for religious-based funds where their religion rules out some of the major components of the performance benchmark. And a number of superannuation funds that have large allocations to unlisted asset classes have said some of the benchmarks being used for those assets are not completely representative, which has the potential to penalise their funds.
“I’m seeking advice from Treasury at the moment about the best way to initiate that review and how to consult stakeholders on it, so that’s a priority,” Jones said.
Another priority is dealing with the “absolute mess” in the financial advice sector.
“We’ve basically got a regulatory environment that is not working for consumers. It’s not working for the profession. It’s not delivering the outcomes that are needed. Everything from the regulatory burden, the professional qualifications, the accrediting systems, all of this needs to be looked at, so we’ve got several projects underway to look at that,” he said.
“We know the Retirement Income Covenant won’t work unless we get the advice piece sorted.”
When asked if he had anything special in plan for self-managed superannuation funds, the Minister said they had no specific plans around the SMSF sector but it, of course, wasn’t immune from the same issues facing the rest of the superannuation sector.