The Australian Institute of Superannuation Trustees (AIST) has warned that funding for the new Australian Financial Complaints Authority (AFCA) must avoid cross subsidisation.
AIST said it was “essential that AFCA is appropriately funded to ensure it can provide an effective and efficient dispute resolution service to consumers and scheme members”.
AIST CEO Eva Scheerlinck said there was a moral and legal obligation on super funds to ensure their members’ savings weren’t funding the resolution of complaints from other sectors of the financial services industry.
“It would be unacceptable, inequitable and unfair if members’ retirement savings were used to fund the resolution of disputes unrelated to superannuation, such as complaints against banks and financial advisers,” said Ms Scheerlinck.
AIST has raised concerns about a lack of transparency in AFCA’s proposed funding model, in a submission.
“We request that AFCA release detailed cost projections for each dispute resolution stream to enable super funds to better understand how members’ savings are going to be used and how much will be collected from each industry sector providing the funding,” Ms Scheerlinck said.
AIST also calls for more clarity in AFCA’s cost recovery model, the need for a breakdown of funding and allowing the industry sufficient time to respond to future funding proposals.
The final AFCA funding model is expected to be released in “early September 2018”, and commence on 1 November 2018.