Key elements of the financial services industry are pushing for the Federal Government to avoid defining the purpose of superannuation within the existing legislative regime around superannuation.
The Financial Services Council (FSC), the SMSF Association, and now the Association of Superannuation Funds of Australia (ASFA) have all urged the enactment of stand-alone legislation to define the purpose of superannuation, effectively separating from the legacy issues of the existing regime.
SMSF Association chief executive, Andrea Slattery most clearly stated the reasons for wanting stand-alone legislation saying the objectives of superannuation “will influence a number of policy areas including superannuation, taxation, social security, health and aging”.
“Accordingly, the objective should be legislated in a stand-alone Act rather than in existing superannuation or taxation legislation,” she said.
The ASFA submission argued that “a new, stand-alone piece of legislation, the Objective of Superannuation Act, could hard code an agreed definition and place an obligation on the relevant Minister to make a ‘statement of compatibility’ with the objective of the system when legislation is introduced to the parliament that impacts on superannuation.
This is consistent with the approach of the FSC which used its submission to Treasury to lobby for stand-alone legislation claiming “there are practical difficulties arising from the alternative (enshrinement in existing superannuation legislation), including:
- The numerous superannuation, social security and tax laws across which the ‘superannuation system’ is built; and
- The potential impact of enshrinement on traditional approaches to statutory interpretation, including its possible interaction with the sole purpose test”.
“It is important that the objective should not address, or impact upon, the currently legislated best interest duty provided for in the Superannuation Industry Supervision Act 1993. The best interest duty is already enshrined in law and its meaning is established and well understood for superannuation trustees,” the submission said.
