ASFA cautions O’Dwyer on CIPRs

Superannuation fund trustees will need a “safe harbour” defence if they are to be empowered to ‘nudge’ members into comprehensive income products in retirement (CIPRs), according to the Association of Superannuation Funds of Australia (ASFA).

ASFA chief executive, Dr Martin Fahy has written to the Minister for Revenue and Financial Services, Kelly O’Dwyer pointing out some of the pitfalls the organisation believes are likely to be encountered as a result of the Government pursuing a Retirement Income Covenant or framework with respect to CIPRs.

The ASFA submission specifically pointed to the prospect of a mass-customised CIPR and super trustees being expected to ‘nudge’ or ‘soft default’ members into the products and makes clear that in such circumstances “the concept of ‘nudge’ or ‘soft default’ will need to be defined” and that there will need to be clarification as to who should, and should not be, ‘nudged into’ a CIPR.

Related News:

The submission also pointed to the interplay between ‘nudging’ and ‘soft default’ in the context of the provision of personal financial advice and the design and distribution obligations which might be legislated in the future.

“There will be a need for a ‘safe harbour’ to protect trustees from liability arising from an inappropriate ‘nudge’/ ‘soft default’ as a result of ‘mass customisation’ and there being insufficient information about the member,” it said.

The ASFA document said any nudge/soft default carried with it considerable risk.




Related Content

Allow super pooling, says research

Female workers would be assisted if couples were allowed to pool their superannuation fund balances, according to new research undertaken by Supe...Read more

Vision Super doubles FUM to $10 billion

Industry super fund Vision Super yesterday hit $10 billion in funds under management (FUM), doubling its size in the last five years.The fund put the ...Read more

SuperFriend outlines recommendations for mental health

SuperFriend, the workplace mental health and wellbeing partner for the superannuation and insurance industry, has responded on behalf of its partners ...Read more

Author

Comments

Comments

Leaving any politicking out of it. Generally and more often than not; the Industry Super Funds have continually outperformed the others. Just look at the Rating tables and refer these : https://www.superratings.com.au/ratings/winners http://investmentcentre.moneymanagement.com.au http://investmentcentre.moneymanagement.com.au/news/752515/who-underperformed-in-the-aussie-equities-space?

One of those Industry Super funds takes over 9 months to pay out funds to beneficiaries upon death. Another Union fund takes 4 weeks to carry out a withdrawal and excepts instructions only via some unknown device called a fax and outsources members work to Lithuania. Another Industry/Union fund is called a balanced fund and yet has 87% in growth assets and compares it to another fund with balanced in it's title with 59% in growth assets.

Add new comment