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Rethink needed on member notification: ASFA
The Association of Superannuation Funds of Australia (ASFA) has criticised the Government's superannuation notification process draft exposure for being too prescriptive, and said the proposed standards needed a "fundamental rethink".
In a submission to Treasury, ASFA said the draft ignored existing processes and reporting procedures and greatly increased the pressure on super fund trustee resources.
"ASFA strongly recommends that there be a fundamental rethink of the notification process due to the number of issues identified with the process proposed in the exposure draft," it said.
The requirement of superannuation funds to notify members of contributions was largely redundant according to ASFA, who said it would only be relevant for a member who does not monitor an employer's contribution information.
ASFA said legislation should encourage the use of existing processes such as access to online portals, with trustees required to send members six-monthly contribution notifications and regular information on how to access information online.
Reporting periods did not add up with the end of Superannuation Guarantee contributions periods or with funds that used substituted accounting periods, according to the industry body.
ASFA said the draft did not recognise specific circumstances such as insurance only products and measures were poorly targeted.
It did commend Treasury on its work into the intrafund consolidation of superannuation interests and said it had listened to industry in imposing a higher level trustee obligation, which should also apply to the reporting standards.
But it said wording contained in the draft should be amended to include defined benefit interests and pension accounts in the assessment of multiple superannuation interests.
ASFA also said that after the consolidation legislation was enacted, the Australian Prudential Regulation Authority should give immediate attention to funds trying to implement a process to identify multiple superannuation interests, with a view to granting relief.
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