With all the dismal news around and another year of negative returns looming for most super fund members, it seemed around Budget time that the Government was ignoring super and may have even placed it into the too hard basket. We also heard that the longest running Senate Select Committee — that on superannuation — might be terminated by the end of this month.
But those who thought super was off the agenda were soon proved wrong. The minister for revenue and assistant Treasurer, Senator Helen Coonan, has since been bombarding us with announcements.
At the time of going to press, she was poised to introduce legislation into Parliament to establish a co-contributions scheme (where the Government matches personal contributions of up to $1000 made by low income earners) and to reduce the surcharge from 15 to 10.5 per cent over three years.
She also repeated her support for choice-of-fund and released draft portability regulations for public comment. The Government, she added, would reveal some important changes to the Choice of Superannuation Bill to be debated in the Spring sittings. And it would rekindle the debate on the splitting of superannuation contributions between spouses .
Coonan also announced a review of the laws allowing financial assistance for funds hurt by fraudulent conduct or theft, and she released draft legislation on superannuation safety, which will force trustees to be licensed and super funds to be registered by the Australian Prudential Regulation Authority (APRA).
The safety announcements contained no surprises, mainly because they are much the same as what APRA executives have been saying on the conference circuit lately. The draft was well accepted by the superannuation industry although some experts caution there could be hiccups when more details are released.
The Government’s introduction of legislation into Parliament to overhaul APRA, in response to recommendations from the HIH royal commission, was followed by news that APRA CEO Graeme Thompson would quit his post at the end of the month.
There’s certainly been plenty to keep reporters busy and trustees on their toes, and while Coonan is not likely to get all her initiatives passed that easily in Parliament, she’s provided plenty to scare more weary employers down the outsourcing path and to accelerate the winds of change blowing across our industry. Its not only super funds that have to keep adapting, but also their service providers who are under pressure as their client pool shrinks. Some will adapt innovatively. Others will die.
