ASFA warns on 'deadweight' compliance

Many of the disclosure requirements imposed on superannuation funds have become a millstone that have not achieved their original objectives, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission to the Productivity Commission’s annual review of regulatory burdens on business, ASFA said that while it was satisfied that superannuation regulations had been optimised to protect members’ interests and benefits, it also believed there were a number of areas in which the current regulatory regime needed to be reviewed.

Looking at disclosure, the submission said that it had become a millstone and had not achieved many of its objectives, particularly with respect to the transfer of Chapter 7 of the Corporations Act, which had “arguably been counterproductive for the superannuation industry and has involved super funds in excessive compliance costs”.

The submission then went on to list other examples of what it described as “deadweight compliance costs” including paper-based communications, particularly annual reports, the amount of resources required to undertake the annual Australian Prudential Regulation Authority reporting process, breach reporting across all regulators and complex contribution rules.

The ASFA submission also pointed to tax and prudential law inconsistency.