Super fund portfolio disclosure draft legislation released

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superannuation fund portfolio holdings disclosure (PHD) and choice product dashboards, exposure draft legislation, Superannuation Legislation Amendment (Transparency Measures) Bill 2015: Product dashboardsThe Treasury has released exposure draft legislation containing changes to the portfolio disclosure and product dashboard requirements for large superannuation funds.

“The existing choice product dashboard and portfolio holdings disclosure requirements were introduced in 2012 but the supporting regulation has not yet been made. ASIC Class Order [CO 14/443] delays the commencement of the requirements until 1 July 2016,” says Treasury.

Under the current law super funds with five or more members, excluding SMSFs, must publish a product dashboard for each investment option in the fund’s choice products. Under the draft legislation funds would be required to publish a dashboard for each of the fund’s ten largest choice investment options. There are also changes to the requirements on MySuper and choice lifecycle products.

Additionally, disclosure of portfolio holdings would be limited to assets held directly and by associated entities.

“These refinements provide a balance between improving member outcomes and minimising compliance costs for the superannuation industry,” said Treasury.

“The two measures contained in the Bill, portfolio holdings disclosure (PHD) and choice product dashboards, will achieve an appropriate balance between improved consumer outcomes and reduced industry compliance costs. PHD is aimed at increasing the market, as well as members’, awareness of what specific investments are being made by superannuation funds. This will enable members and analysts to better assess the level of diversification and risk in particular products.”

Kelly O’Dwyer, the Assistant Treasurer and Minister for Small Business, said the draft legislation “implements the Government’s election commitment to improve the quality of information available to super fund members and employers so that they can make informed decisions when comparing the relative performance of funds.”

“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 draft bill is titled Superannuation Legislation Amendment (Transparency Measures) Bill 2015: Product dashboards. Submissions close 20 January 2016.

Treasury has also released draft legislation for changes to expand choice of super fund for employees under some industrial agreements.

Super fund industry welcomes Portfolio Disclosure and Product Dashboard changes

Super fund industry bodies have welcomed the draft legislation.

“The reforms proposed today by the Assistant Treasurer will assist consumers while limiting the costs of implementation, which are ultimately paid for by fund members,” said ASFA CEO Pauline Vamos.

According to ASFA, under the proposed legislation, super funds will not be required to “disclose commercially sensitive information”.

The Australian Institute of Superannuation Trustees (AIST) also welcomed the draft changes, but said they do not go far enough, particularly in only requiring product dashboards for the 10 largest choice investment options.

“Around 90 per cent of fund investment options will not be required to have dashboards,” said AIST Executive Manager, Policy, David Haynes.

“Basically, we are only allowing members in certain options to know all the facts.”

He said AIST will “continue to work” to make dashboard disclosure useful for consumers and other stakeholders.

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