The Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 was introduced into the House of Reps on Wed 19.9.2012.
This third tranche of MySuper legislation will implement further reforms to complement the Government’s low-cost default superannuation product (MySuper), generally from 1 July 2013.
Broadly, the Bill will introduce measures relating to superannuation fees, providing intra-fund advice, insurance on an opt-out basis, disclosure of executive pay and investments, APRA collection of data, default funds in modern awards and enterprise agreements, the transition of accrued default balances to MySuper, an exception for defined benefit funds and new requirements for eligible rollover funds (ERFs).
Key amendments to the Superannuation Guarantee (Administration) Act 1992, SIS Act and Corporations Act include:
- – will apply to all APRA-regulated super funds and ADFs (but not SMSFs and PSTs), in addition to the specific fee rules for MySuper products. general fee rulesEntry fees will be prohibited, buy-sell spreads will be limited to cost recovery and it will not be possible for funds to include the cost of providing financial advice to employers in any fee charged to a member;
- intra-fund advice– specific restrictions will apply to the types of personal advice that trustees of APRA-regulated super funds can charge collectively across their membership as “intra-fund advice” (ie financial product advice that trustees may provide to fund members, where permitted). Only personal advice that is of a one-off or transactional nature will be allowed to be spread across the membership of the fund;
- insurance on opt-out basis – super funds will be required to provide life and TPD insurance to members (excluding defined benefit members) on an opt-out basis. However, the existing requirement for a default fund to offer a minimum level of life insurance will be retained;
- performance-based fees– new criteria will also apply to any performance-based fee payable to an investment manager in relation to assets of a MySuper product. An RSE licensee will also be required to elect not to charge MySuper members a fee that relates to the payment of conflicted remuneration (ie it will not be possible to deduct any amount relating to a commission payment to a financial adviser).
DATE OF EFFECT: The majority of the provisions will apply no earlier than the commencement of the first tranche of legislation – the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 (currently before the Senate having passed the House of Reps with amendments). The provisions relating to fees and intra-fund advice will generally commence after the MySuper Core Provisions Bill (being 1 January 2013 or an earlier date set by Proclamation). Insurance on an opt-out basis will generally commence on 1 July 2013. Note that the second tranche of legislation, the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012, has already been enacted.
[LTN 182, 19/9]