POWERED BY MOMENTUM MEDIA
ASFA argues against funding cross-subsidies
Superannuation funds should not be required to cross-subsidise entities under the new Australian Financial Complaints Authority (AFCA) regime, even under the interim industry funding model.
That is the bottom line of a submission filed with the AFCA by the Association of Superannuation Funds of Australia (ASFA) which has noted the likelihood of cross-subsidisation occurring with respect to both Retirement Savings Accounts (RSAs) and Small APRA Funds (SAFs).
The ASFA submission pointed out that Retirement Savings Account providers, general banks, would not be subject to the same levy arrangements as superannuation funds but would be covered by the levies paid by the banks.
“The exclusion of RSA providers from contributing to levies for superannuation trustee members provides the potential for cross‐subsidisation (in particular, where there is a complaint in respect of a RSA product),” it said. “In this regard, AFCA could consider incorporating RSA providers into the interim levy regime for superannuation trustee members.”
The submission made a similar point with respect to SAFs noting that there were 2,085 SAFs with total assets of $2.2 billion.
“ASFA understands that under the interim funding model SAFs will not pay levies as superannuation trustee members,” it said. “Instead, SAFs will pay a general minimum membership levy. This arrangement is similar to arrangements under the APRA levy regime – where all SAFs pay the same flat fee ($590 in 2018‐19). As is the case for RSA providers, the exclusion of SAFs from contributing to levies for superannuation trustee members provides the potential for cross‐subsidisation.”
Recommended for you
A major super fund has defended its use of private markets in a submission to ASIC, asserting that appropriate governance and information-sharing practices are present in both public and private markets.
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
