ASIC says there are “significant changes” coming to the way superannuation funds disclose fees and charges, making them more transparent and easier to understand.
New rules for super fund fee and cost disclosure come into effect from 30 September 2017, with the end of a transition period. The changes were originally to apply from 30 January 2017, but ASIC allowed an extension.
The regulator says the changes will help bring consistency across the superannuation industry to what must be included in PDSs (Product Disclosure Statements).
“And, from later in 2018, the changes will also ensure that the information in PDS and in periodic statements will match more clearly. As a result, consumers will be better able to understand the fees and costs. The consistency and more accurate disclosure of fees will also help ensure that funds are competing more fairly,” said a statement by ASIC.
These changes come after ASIC identified a “significant amount” of under-reporting of fees and “considerable inconsistency” in the way fees and charges are disclosed by super funds.
“ASIC found this made it very difficult for consumers to understand how much they were paying, what they were paying for, and to compare funds.”
“ASIC will make amendments to provide more certainty around the relevant requirements and undertake compliance checks throughout the industry, to ensure funds are meeting their obligations.”
Following “extensive” industry consultation ASIC has also agreed to extend the deadline for certain disclosures. The disclosure of “property operating costs in the investment fee or indirect costs” will now be from 30 September 2018.
“The extension on this component will help provide additional time for discussions between ASIC and industry about how to calculate these fees,” said ASIC.
“ASIC has also extended the deadline for certain disclosures in periodic statements that require changes to the internal systems of funds. This is to ensure the change can be made in a cost effective manner. Those requirements will have effect for annual statements for the year ending 30 June 2018.”