Super funds to be scrutinised by Parliamentary Committee

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Super funds and industry organisations are will be scrutinised by a Parliamentary committee as part of a continuing inquiry into the banks and other financial institutions.

Chair of the House of Representatives Standing Committee on Economics, Liberal MP Tim Wilson, announced there would be hearings to scrutinise the superannuation sector as part of the ongoing review of the major banks and other financial institutions.

Wilson said the “hearings are an important part of the committee’s scrutiny of the financial sector”.

“As the superannuation system is a significant mechanism enabling Australians to support themselves in retirement, it is crucial that the superannuation sector is operating effectively, fairly and to the benefit of fund members.”

Organisations appearing before the Committee include AustralianSuper, IOOF, Suncorp, REST, Hostplus, AMP, Industry Super Australia, and the Association of Superannuation Funds of Australia.

The Committee will hold the hearings on 21 and 22 November.

Part of the Committee’s work, according to the statement by Wilson, will be monitoring the superannuation sector’s progress on “implementing relevant recommendations” of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

However, the superannuation recommendations of the Royal Commission were for legislative and regulatory changes. Two of the superannuation recommendations have already been implemented by Government, with six more expected to be completed by mid or late 2020, according to the Government’s Financial Services Royal Commission Implementation Roadmap. But one of the recommendations – for people to have only one default super account – has no timeframe given in the roadmap. The roadmap says this recommendation will be considered in the context of the Productivity Commission’s report on superannuation – which the Government has had since December last year.

ASIC to appear before Committee

ASIC is also set to appear before the House Economics Committee, for a review of the regulator’s performance, on Wednesday 16 October from 11.05am to 1.50pm.

Wilson said the “hearing will provide the committee with the opportunity to question ASIC on its performance and operation and, in particular, how it is implementing the recommendations of the Hayne Royal Commission”.

“A common theme across the Royal Commission was that ASIC needs to take a stronger stance on enforcement. Australians expect the big banks and others to fear their regulator. There were too many examples where ASIC had not adequately penalised those it regulates.”

“Since the committee’s last hearing with ASIC, the government has passed a comprehensive package of legislation that broadens and strengthens ASIC’s powers as well as providing a range of tougher penalties for wrongdoers.”

“The committee will scrutinise ASIC on its new enforcement strategy and supervisory approach as well as its efforts to restore trust, eliminate conflicts of interest, and raise standards of professionalism in Australia’s financial services industry.”

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