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ASFA concern on unitisation
The Association of Superannuation Funds of Australia (ASFA) is canvassing the views of members on the issue of reporting rates of return in periodic statements in circumstances where it believes the current situation being administered by the Australian Securities and Investments Commission (ASIC) is unworkable.
In a discussion paper sent to members this week, ASFA argues that the existing situation is unworkable for three reasons, including that it is unclear how rates of return should be reported where the fund’s investments are unitised at the investment option level and where crediting rates are applied more often than once during a reporting period.
It said ASFA had requested guidance from ASIC on how trustees should report the rate of allotment of net earnings in periodic statements.
The ASFA discussion paper said that while a 1995 Insurance and Superannuation Commission circular had provided some guidance on the original Superannuation Industry (Supervision) Regulation, this did not appear to provide guidance to funds that were unitised.
“Unfortunately, the regulations provide no guidance on how to report earnings rates where the fund unitises at the investment option level rather than at the whole fund level,” it said. “Given the widespread incidence of member investment choice and of unitisation at the investment option level, this is likely to be an issue for a large number of funds.”
AUTHOR
Mike Taylor
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