No end in sight for super fight By Lachlan Maddock 28 April 2021
A barrage of criticism has seen the Morrison government make major alterations to its Your Future, Your Super reforms. But by backing down from a fight, can they really avoid it?
The government’s sweeping changes to the YFYS reforms are likely to be met with much relief from within the superannuation industry. The indices against which funds will be benchmarked have been modified to ensure that allocations to infrastructure don’t see them unfairly penalised, while administration fees will now also be included in the performance test.
But it’s an abrupt about-face for a government that just months ago was insisting that it was impossible to objectively measure the impact that admin fees had on returns.
Super lobby ups ante against âregulatory kill-switchâ
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The governmentâs backflip on the superannuation performance test got a tick of approval by the sector, but lobby groups are pushing for a controversial measure that allows for ministerial influence over investment decisions to be axed.
The government revealed on Wednesday an updated approach it would use to benchmark the performance of superannuation funds, acknowledging that a prior method could have discouraged funds from investing in unlisted infrastructure and property.
The Australian Financial Review on Monday, the government has also done an about-face on the inclusion of administration fees as well as investment fees in the performance test, having conceded that dodgy trustees could game the system.
Superannuation reforms hand too much power to politicians, industry says theage.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theage.com.au Daily Mail and Mail on Sunday newspapers.
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Amid Government back-bench criticism of how much superannuation funds pay to be members of industry organisations and lobby groups, one of Australia’s largest industry funds, REST, has revealed it pays well over $130,000 a year for just two memberships.
Those back-benchers have questioned the Australian Prudential Regulation Authority (APRA) one whether the payment of such subscriptions should be formally scrutinised to determine whether it would comply with the proposed new members best financial interests test.
Answering questions on notice from a hearing of the Senate Standing Committee on Economics, REST revealed that it normally pays an annual membership of $52,250 to be a member of the Australian Institute of Superannuation Trustees (AIST) and $82,533 to be a member of the Association of Superannuation Funds of Australia (ASFA).
Member engagement needs to be back at the top of the agenda moneymanagement.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from moneymanagement.com.au Daily Mail and Mail on Sunday newspapers.