Industry backs sole purpose test changes

The superannuation industry appears split on the question of whether the funding of political advertising represents a breach of the sole purpose test.

A survey conducted by Super Review during the recent Association of Superannuation Funds of Australia (ASFA) conference has revealed a significant superannuation industry split on the question of what represents a breach of the sole purpose test, particularly where political advertising is concerned.

Asked to comment on suggestions to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that advertising campaigns such as the so-called “fox in the henhouse” might represent political advertising, more than 40 per cent of respondents agreed.

The same respondents also agreed that the funding of such advertising by superannuation funds represented a breach of the sole purpose test.

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However nearly 60 per cent of respondents said they believed that the advertising was neither political nor a breach of the sole purpose test.

What is more, around 70 per cent of respondents said they believed the sole purpose test should either be modified to give it more flexibility or abandoned altogether.

Asked what they believed the future of the sole purpose test should be, 28.5 per cent of respondents said it should remain as it is while 42.8 per cent said it should be modified to give it more flexibility while 28.5 per cent said it should be abandoned.