Super news for July 2023

Super trustees’ compliance gaps exposed

The Australian Securities and Investments Commission (ASIC) is calling on superannuation fund trustees to deal appropriately with members’ money when it is first received and to do more to consolidate duplicate member accounts within their funds.

This follows an ASIC review of a sample of 12 superannuation trustees to understand how they met their requirements for dealing with money received as set out in the Corporations Act 2001.

“Our review identified compliance gaps – all but one trustee failed to ensure their practices or disclosure aligned with their obligations,” ASIC Commissioner Danielle Press said.

As financial product providers, super fund trustees are required to safeguard incoming funds in certain ways as prescribed under the Corporations Act 2001.

“While no significant individual member impact was identified in our review, we were very concerned to find the trustees hadn’t given enough consideration to these important obligations, in some cases for decades, potentially putting members’ money at risk,” Press said.

In a separate review of nine trustees of both industry and retail super funds, ASIC assessed how the trustees were meeting obligations to annually identify and automatically consolidate duplicate member accounts within their fund.

“Trustees should be proactively merging duplicate member accounts within the fund to not only help their members avoid extra fees but also to ensure their funds avoid costly remediation in the future. However, our review highlighted that they are not doing enough,” Press said.