After more than a year and half languishing before parliament, Australian workers will finally benefit from stronger laws designed to protect their retirement savings from being eroded by underperforming products and funds, Industry Super Australia says.
Industry Super Australia’s Deputy Chief Executive, Matthew Linden welcomed the passage of the Treasury Laws Amendments (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill by the Parliament today saying it will put the acid on trustees to perform or exit the industry.
“From when the Bill was originally introduced in September 2017 Industry Super Funds argued the bill needed to be strengthened to protect members irrespective of the type of super fund or product they were in,” Mr Linden said.
Although it took a Royal Commission and a major Productivity Commission review the Bill has been significantly amended to require:
· rigorous performance benchmarking of individual MySuper and Choice super products;
· fund level assessments which will expose product complexity and issues with scale;
· disclosure of hidden investment costs that erode returns;
· enhancements of APRA powers to deal with related entities in vertically integrated institutions.
“Coupled with tougher civil and criminal penalties for superannuation trustees who breach their fiduciary duties, these new laws should raise the performance bar,” Mr Linden said.
“This sets out the regulatory framework that will pave the way to weed out dud, underperforming super funds and products – giving consumers confidence their savings are being invested in better performing products.”
Separately, Industry Super Australia also welcomed the passing of the Treasury Amendment Laws (Design and Distribution Obligations and Product Intervention Power) yesterday.
“Taken together these Bills are a significant improvement however it is likely further changes may be necessary to protect super fund members and consumers generally,” Mr Linden said.