Superannuation funds will have to virtually compete on fees and performance to attract members under a new regime foreshadowed by the Federal Government in Tuesday’s Budget.
Under the Your Future, Your Super package regime announced by the Federal Treasurer, Josh Frydenberg announced an annual objective performance test for superannuation funds.
As well, superannuation funds will be required to hold Annual Members’ Meetings in the same fashion as the annual general meetings of publicly-listed companies.
He said that those funds that failed to meet those test objectives and were regarded as persistently underperforming would be prevented from taking on new members.
“To protect members from poor outcomes and encourage funds to lower costs the Government will require superannuation products to meet an annual objective performance test,” he said. “Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.”
“The Government will increase trustee accountability by strengthening their obligations to ensure trustees only act in the best financial interests of members. The Government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of Annual Members’ Meetings,” Frydenberg said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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