Super fund choice and disclosure Bills put before Parliament

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Super fund choice, superannuation fund transparency, product dashboards, portfolio holding disclosure, ATO remedial power, Parliament, Superannuation Legislation Amendment (Choice of Fund) Bill 2016, Superannuation Legislation Amendment (Transparency Measures) Bill 2016, Tax and Superannuation Laws Amendment (2016 Measures No. 2) Bill 2016The Government has introduced three superannuation-related Bills to the House of Representatives just before the Parliament rises for the long break ahead of the Budget. These Bills include expanding choice of super fund, changes to the disclosure requirements on large super funds and the Statutory Remedial Power for the ATO.

Expanding choice of super fund

The Superannuation Legislation Amendment (Choice of Fund) Bill 2016 expands choice of super fund to more employees.

“The Turnbull Government recognises it doesn’t make sense to force employees to save money in superannuation but then leave key decisions about how it is managed outside their control,” said the Assistant Treasurer Kelly O’Dwyer.

“The Choice of Fund Bill is designed to let people take control of their superannuation to improve retirement outcomes.”

“It’s about employees being able to choose the fund that best suits their needs, be it an industry fund, a retail fund, or a self-managed superfund.”

“It is expected these changes will extend choice to up to 800,000 employees who currently do not have choice of fund under enterprise agreements and workplace determinations.”

Specifically the Bill amends the Superannuation Guarantee (Administration) Act 1992 so that employees “under new workplace determinations or enterprise agreements made from 1 July 2016 have an opportunity to separately choose the superannuation fund for their compulsory employer contributions.”

It is important to note that, according to the Explanatory Memorandum:

The amendments to the choice of fund requirements only apply to workplace determinations or enterprise agreements made on or after 1 July 2016. They do not apply to workplace determinations or enterprise agreements made before 1 July 2016. Enterprise agreements that are made before 1 July 2016, but which apply after 1 July 2016, will not be affected by these amendments.

More detail:

Choice Product Dashboards and Portfolio Holdings Disclosures

The Superannuation Legislation Amendment (Transparency Measures) Bill 2016 makes changes to the choice product dashboards and portfolio holdings disclosure rules of large superannuation funds.

“Transparency through improved disclosure of information is critical to the efficient operation of Australia’s superannuation system,” said the Assistant Treasurer Kelly O’Dwyer, in regards to the Bill.

“It improves understanding, awareness and engagement for Australians with retirement savings, and can also lead to greater competition and accountability within industry.”

“The aim of these changes is to strike the right balance between enhancing transparency and comparability of information for members, and minimising the compliance burden on superannuation funds.

The Explanatory Memorandum to the Bill says:

To achieve this objective, the Government will amend the Corporations Act to limit the requirement for a trustee of a regulated superannuation fund with five or more members to produce a choice product dashboard to the fund’s 10 largest choice investment options, as measured by funds under management (FUM). The current requirement prescribes the provision of a product dashboard for all the fund’s choice investment options. A power will be provided to prescribe by regulation how the dashboard must be displayed on the fund’s website, and how information on the dashboard is to be set out.

Industry Super Australia has criticised the changes, saying it could make it “nearly impossible” to make informed decisions about super funds.

More detail:

Remedial power for ATO Commissioner

The Tax and Superannuation Laws Amendment (2016 Measures No. 2) Bill 2016 would give the ATO Commissioner the power modify the operation of taxation or superannuation laws.

This would be through the use of a ‘disallowable legislative instrument’, under the condition that it is not inconsistent with the intended purpose of the tax provision, the Commissioner considers the modification to be reasonable and the Department of the Treasury or Department of Finance advises the Commissioner that the impact on the Budget would be negligible.

Additionally an entity must not apply a modification if it would “produce a less favourable result”.

More detail:

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