The Government on Fri 27.4.2012, released the Exposure Draft – Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 which seeks to implement the 3rd tranche of its Stronger Super reforms, including the remaining legislative elements to give effect to MySuper (ie intra-fund advice, insurance and the transition to MySuper).
The Minister for Financial Services and Superannuation, Bill Shorten, said the draft legislation seeks to give effect to the Government’s commitment that MySuper will be commission-free. By prohibiting commissions and putting downward pressure on fees, the Government estimates that MySuper will reduce the total fees paid by superannuation funds members by $1.7bn per year over the longer term, Mr Shorten said. (Source:Minister for Financial Services media release No 021, 27 April 2012.)
Broadly, the draft legislation proposes to amend the SIS Act, Superannuation Guarantee (Administration) Act 1992 (SGAA), APRA Act to:
- fees, costs and intra-fund advice – ban entry fees and set the criteria for the charging of other fees in superannuation, including rules for the charging of financial advice;
- insurance on opt-out basis – require all superannuation funds to provide life and TPD insurance to members (excluding defined benefit members) on an opt-out basis;
- APRA collection of data – enable APRA to collect information on a look-through basis;
- disclosure of executive pay and investments – require the disclosure and publication of key information in relation to superannuation funds;
- modern awards and enterprise agreements – allow only MySuper funds to be eligible as default funds in modern awards and enterprise agreements;
- defined benefit members – provide exceptions for members of defined benefit funds;
- transition to MySuper – requires trustees to transfer certain existing balances of members to MySuper; and
- eligible rollover funds – provides rules in relation to ERFs.
DATE OF EFFECT: When enacted, the majority of the provisions are proposed to apply from no earlier than the commencement of the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011.
SUBMISSIONS are due by 16 May 2012 to: Manager, Superannuation Unit, Financial System Division, Treasury – Email: strongersuper@treasury.gov.au.
[LTN 79, 27/4]]