The government today released the Final Report into the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Below are the 9 recommendations concerning superannuation.
Recommendation 3.1 – No other role or office
The trustee of an RSE should be prohibited from assuming any obligations other than those arising from or in the course of its performance of the duties of a trustee of a superannuation fund.
Recommendation 3.2 – No deducting advice fees from MySuper accounts
Deduction of any advice fee (other than for intra-fund advice) from a MySuper account should be prohibited.
Recommendation 3.3 – Limitations on deducting advice fees from choice accounts
Deduction of any advice fee (other than for intra-fund advice) from superannuation accounts other than MySuper accounts should be prohibited unless the requirements about annual renewal, prior written identification of service and provision of the client’s express written authority set out in Recommendation 2.1 in connection with ongoing fee arrangements are met.
Recommendation 3.4 – No hawking
Hawking of superannuation products should be prohibited. That is, the unsolicited offer or sale of superannuation should be prohibited except to those who are not retail clients and except for offers made under an eligible employee share scheme. The law should be amended to make clear that contact with a person during which one kind of product is offered is unsolicited unless the person attended the meeting, made or received the telephone call, or initiated the contact for the express purpose of inquiring about, discussing or entering into negotiations in relation to the offer of that kind of product.
Nominating default funds
Recommendation 3.5 – One default account
A person should have only one default account. To that end, machinery should be developed for ‘stapling’ a person to a single default account. Recommendation 3.6 – No treating of employers Section 68A of the SIS Act should be amended to prohibit trustees of a regulated superannuation fund, and associates of a trustee, doing any of the acts specified in section 68A(1)(a), (b) or (c) where the act may reasonably be understood by the recipient to have a substantial purpose of having the recipient nominate the fund as a default fund or having one or more employees of the recipient apply or agree to become members of the fund. The provision should be a civil penalty provision enforceable by ASIC.
Recommendation 3.7 – Civil penalties for breach of covenants and like obligations
Breach of the trustee’s covenants set out in section 52 or obligations set out in section 29VN, or the director’s covenants set out in section 52A or obligations set out in section 29VO of the SIS Act should be enforceable by action for civil penalty.
Recommendation 3.8 – Adjustment of APRA and ASIC’s roles
The roles of APRA and ASIC with respect to superannuation should be adjusted, as referred to in Recommendation 6.3.
Recommendation 3.9 – Accountability regime
Over time, provisions modelled on the BEAR should be extended to all RSE licensees, as referred to in Recommendation 6.8.