On this page
ASIC launches proceedings against AustralianSuper
The Australian Securities and Investment Commission (ASIC) has started civil proceedings against AustralianSuper, alleging failures to address multiple member accounts.
The regulator is alleging that the fund did not do enough to identify members who held multiple accounts and help them merge those accounts. Members with duplicate accounts continued to be charged fees for multiple accounts.
“Failing to merge duplicate accounts within a fund can have significant financial consequences for members who end up paying multiple sets of fees, eroding their superannuation balance over time,” ASIC deputy chair Sarah Court said.
ASIC says that between 1 July 2013 and 31 March 2023, approximately 90,000 AustralianSuper members were affected, and the total cost to members was approximately $69 million.
In a statement, an AustralianSuper spokesperson said: “AustralianSuper regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts. This should not have happened, and we apologise unreservedly to members.”
The fund implemented a member remediation program for the issue matter earlier this year, but ASIC is seeking declarations, pecuniary penalties and other orders against AustralianSuper in its civil proceedings.
Draft super objective open for discussion
The federal government has released draft legislation for an Objective of Super, which has been broadly welcomed by the industry.
The draft legislation defines the proposed objective of super as: ”to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.”
“The objective does not alter superannuation trustees’ existing obligations or how members’ money can be invested or accessed but it does serve as a reminder to them of their role in the super system, including to support members holistically during their working life, and their transition to retirement,” Treasury said in a statement when releasing the draft legislation.
The government is seeking stakeholder feedback by 29 September 2023.
“This proposal is in lockstep with the expectations of the community. Super is there to help provide working Australians with certainty and stability in retirement – an aspiration that should be enshrined and elevated above the day-to-day political fray,” Industry Super Australia deputy chief executive Matthew Linden said.
ART begins global search for next CEO
Australian Retirement Trust (ART) has begun a global search for a new chief executive following the announcement by current CEO Bernard Reilly that he will step down from the position in February 2024. Reilly led the merger between Sunsuper and QSuper to form the new fund.
“Bern has expertly guided Australian Retirement Trust to deliver merger benefits to our more than 2.3 million members and grow funds under administration to more than $260 billion. But I think the thing Bern should be proudest of, and a true testament to his leadership capabilities, is the culture he has helped grow across our organisation,” ART chair Andrew Fraser said.
ART has appointed leadership advisory firm Egon Zehnder to conduct the search for a new CEO.
“This is an exciting time, as Australian Retirement Trust enters its next chapter as one of Australia’s leading superannuation funds, I’m excited to continue watching the fund grow as one of its members,” Reilly said.
Experience counts for financial advisers
Financial advisers with 10 or more years’ experience between 1 January 2007 and 31 December 2021, and a clean disciplinary record, can continue practising without the need for a degree, provided they pass the financial planner exam.
This so-called ‘experience pathway’ is now enshrined in the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 in an effort to stem the exodus of experienced advisers from the industry.
“By better recognising the experience of long-serving financial advisers, the government is providing a pathway for experienced advisers to remain in the industry,” Assistant Treasurer and Minister for Financial Services Stephen Jones said in a statement after the legislation was passed on 6 September.
“This means that new entrants will have the benefit of their experience through mentoring and supervision, and more Australians will have access to financial advice.”
Consumer urged to look before they leap super funds
The Financial Services Council (FSC) is encouraging consumers to seek financial advice before making changes to their investment strategies following the Australian Prudential Regulation Authority’s most recent super fund performance results.
APRA’s most recent performance test analysed choice products for the first time. Read more about the test, and the funds that failed.
The FSC urges consumers to ensure any changes to their investment strategy align with their individual circumstances and take into account tax implications.
“Consumers in impacted products will be told their investment is underperforming, however many will be unable to move out of that investment due to tax reasons,” FSC chief executive office Blake Brigg said.
“The government is encouraged to support consumers by offering capital gains tax rollover relief to facilitate the transition to contemporary investment options.”
ASIC to sharpen focus on super funds’ retirement outcomes
Retirement outcomes are one of four strategic priorities for the Australian Securities and Investment Commission (ASIC) over the next four years.
“We will take strong action against misleading conduct and poor governance in the superannuation sector, especially where misconduct erodes members’ balances,” ASIC chair Joseph Longo said when outlining the regulator’s Corporate Plan for 2023–27.
The regulator will focus on ways superannuation trustees can strengthen their anti-scam practices and it will also take action to address poor design and distribution of financial products, including superannuation products.
“We will work to ensure that trustees properly implement new obligations (effective since 1 July 2023) that require them to file fund financial statements and audit reports with ASIC and publish those documents on the fund website,” the Corporate Plan document said.