POWERED BY MOMENTUM MEDIA
Government choice trumps members under super practice guide
The Association of Superannuation Funds of Australia (ASFA) has called the treatment of accrued default amounts under Australian Prudential Regulation Authority (APRA) draft prudential practice guide SPG 410 as akin to the Government interfering and overriding valid financial decisions made by super fund members.
ASFA said the current definition of 'accrued default amount' did not recognise the directions given to trustees of previous funds in the case of a successor fund transfer, and included members that chose the default option and gave direction to investment choice.
ASFA said the paradigm within which MySuper had been constructed - with its focus on the underlying investment options and the member - was flawed, as the focus on 'choice' and MySuper money meant a member could fluctuate between the two by virtue of daily switching.
"The current interpretation effectively denies choices that members have made with respect to their fund and/or their investment options/strategies," ASFA stated.
MySuper should have been created as a notional category or division of membership, where the person either does not participate in investment choice and is placed in the MySuper category, or does participate and is placed into the 'choice' category.
It would also allow funds to re-badge investment options, retaining the same insurance and fees across the categories.
"Accordingly, we suggest that members who have chosen to have an amount invested in a default option should be treated as a choice member and not have any amounts moved into MySuper," ASFA said.
It said the charging of administration fees for members who had split their retirement savings between choice and MySuper options was unclear, as was the application of accrued default amounts to funds with lifecycle options and multiple default options.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
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.
Big business has joined the chorus of opposition against the proposed Division 296 tax.
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
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
