Should the sole purpose test be more flexible?

While a number of superannuation funds seek to deal with pointed questions from the Royal Commission around the sole purpose test, a new Super Review survey has revealed support for making the test more flexible.

The survey, sponsored by EISS Super and conducted during the recent Conference of Major Superannuation Funds (CMSF) in Brisbane, found nearly 55 per cent of respondents believed the sole purpose test contained within the Superannuation Industry (Supervision) Act (SIS Act) should be modified to give funds greater flexibility.

A smaller number of respondents believed that flexibility should go even further allowing funds to compete in more areas of the financial services industry.

In all, 51.8 per cent of respondents said they believed the sole purpose test should be modified to give funds greater flexibility, while a further 3.7 per cent said it should be abandoned to enable funds to compete in all areas of financial services.

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The same survey found a similar break-down in responses with respect to the coverage of the Royal Commission into Misconduct in Banking, Superannuation and Financial Services.

The survey revealed that just 55 per cent of the superannuation fund trustees and executives who responded to the survey believed superannuation should have been excluded from the Royal Commission.

The support for injecting more flexibility into the sole purpose test accords with the findings of a similar survey conducted by Super Review at November’s Association of Superannuation Funds of Australia national conference in Sydney.