The Federal Government needs to produce a regulatory impact statement on its latest round of legislative changes including the annual outcomes test because it risks imposing a fresh layer of compliance, according to the Association of Superannuation Funds Australia (ASFA).
Not only has ASFA complained about the regulatory impacts of the legislative changes but the short timeframe the industry has been given to respond.
“The superannuation system requires a strong regulatory framework and regulators should have appropriate powers and instruments to ensure that the system is stable, efficient and delivers on its objectives,” the ASFA submission said. “However, the system is already subject to significant regulatory obligations and oversight and there must be a clear justification for extensions such as those proposed in the bill.”
The submission said that such justifications should include an assessment of the impacts and costs of additional obligations on superannuation fund operations and member outcomes.
“Given the bill will have a major regulatory impact on both industry and consumers if legislated, a regulation impact statement is essential to demonstrate due consideration of these elements,” it said.
The submission said ASFA was particularly concerned about the impact of a number of the proposals on the regulatory and reporting burden for superannuation funds and, in particular, the operation of the annual outcomes test and its potential to add a fresh layer of compliance and reporting for trustees.
It also pointed to the impact of the logistics of the annual members’ meeting on superannuation fund costs and resources and whether the proposed director penalties had adequate protections together with the breadth of the proposed APRA directions powers and whether they could be more precise.
