SUPERANNUATION – GOVERNMENT POLICY – AUSTRALIA

Future Fund’s returns good, not great

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 16-Jan-19

Data from Chant West shows that the federal government’s Future Fund achieved an average return of 10.7 per cent over the seven years to September. This is lower than the returns of major industry superannuation funds over the same period, including AustralianSuper, Hostplus and Cbus. Association of Superannuation Funds of Australia CEO Martin Fahy says the Future Fund would have lower costs and lower net returns if it were to be converted from a sovereign wealth fund into a super fund.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, CHANT WEST FINANCIAL SERVICES PTY LTD, AUSTRALIANSUPER PTY LTD, HOST-PLUS, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, UNISUPER LIMITED, THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED, RICE WARNER ACTUARIES PTY LTD

Sunsuper says top-10 approach fair

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Original article by Joanna Mather
The Australian Financial Review – Page: 4 : 11-Jan-19

Scott Hartley, the CEO of industry superannuation fund Sunsuper, has expressed support for a proposal to restrict default super regime to a list of the 10 best-performing funds. However, he says the new system would need to be gradually phased in to reduce risk. The proposed reform has been criticised by Industry Super Australia CEO Bernie Dean, and Willis Towers Watson Australasia’s former CEO Andrew Boal warns of the potential for "unintended consequences".

CORPORATES
SUNSUPER PTY LTD, INDUSTRY SUPER AUSTRALIA PTY LTD, WILLIS TOWERS WATSON, AUSTRALIA. PRODUCTIVITY COMMISSION

Labor slams attack on union super

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Original article by John Kehoe, Joanna Mather, David Marin-Guzman
The Australian Financial Review – Page: 1 & 4 : 11-Jan-19

Shadow treasurer Chris Bowen has criticised the Productivity Commission’s proposed changes to the default superannuation fund regime. He says restricting the default fund to a list of the 10-best performing funds is problematic, as returns can vary significantly over a period of time. The PC’s key recommendation is opposed by labour unions, while the Financial Services Council and the Association of Superannuation Funds of Australia have also expressed reservations. However, Treasurer Josh Frydenberg says the proposal has merit and is worth considering.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. PRODUCTIVITY COMMISSION, FINANCIAL SERVICES COUNCIL, THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY, COUNCIL OF SUPERANNUATION CUSTODIANS, SUPERANNUATION CONSUMERS’ CENTRE, BT FINANCIAL GROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC

Overhaul to boost super by $3.8bn

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Original article by Michael Roddan
The Australian – Page: 1 & 4 : 10-Jan-19

The Productivity Commission’s final report on its review of the superannuation system will be released on 10 January. It doubles down on the recommendations of an interim report that was released in May. Amongst other things, the PC recommends sweeping changes to the default super regime, including allowing new employees to choose from a list of the 10 best-performing funds. The PC estimates that its recommendations would increase the nation’s retirement savings by about $3.8bn a year. The final report of the financial services royal commission is expected to adopt some of the PC’s recommendations.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIA. FAIR WORK COMMISSION

Supercharge economy, not giant vampire squid

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Original article by Terry McCrann
The Weekend Australian – Page: 38 : 1-Sep-18

When it was introduced in the early 1990s, it was hoped that compulsory superannuation would mean an end to people needing the old-aged pension. However, that ideal is no longer practical, due to a combination of low investment returns and the reduction of permanent and secure jobs. It has been suggested that it is now time to make Australia’s superannuation system a voluntary one instead. This would deliver a number of benefits, including an increase in real wages and a big jump in personal income tax revenues.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY

Strip super from union awards

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Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 8 : 29-May-18

The Productivity Commission’s highly-anticipated report on the superannuation system has recommended major changes to the default fund regime. It proposes that an expert panel – rather than unions or employers – be given responsibility for selecting a list of 10 default super funds. The Commission says this would address problems such workers being locked into underperforming default funds and the creation of multiple accounts when people change jobs. The Commission has also made recommendations on issues such as the number of independent directors on super funds’ boards.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Labor urged to hold fire on super rise

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Original article by Andrew Tillett
The Australian Financial Review – Page: 7 : 4-Apr-18

The superannuation guarantee is currently slated to increase to 12 per cent in 2025. Labor had originally legislated for the super guarantee to reach this level in 2019, and employers’ groups have cautioned against any move to bring forward the Coalition’s revised target date. Jenny Lambert of the Australian Chamber of Commerce & Industry says any such move could dampen wages growth and would be too costly and disruptive for many businesses. Labor’s employment spokesman Brendan O’Connor stresses that changes to the super guarantee would depend on the state of the Budget.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, BUSINESS COUNCIL OF AUSTRALIA, ACTU, SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES’ ASSOCIATION, AUSTRALIA. DEPT OF THE TREASURY

Super raids to pay for health bills

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Original article by Sean Parnell, Sarah-Jane Tasker
The Australian – Page: 1 & 2 : 9-Jan-18

Government funding for the health system is under scrutiny following the release of data showing that more Australians are accessing their superannuation to finance medical procedures. The figures show that there were around 22,000 applications to draw upon super savings to pay medical bills in 2016-17, compared with just 4,000 in 2010-11. The Federal Government will review the existing rules regarding the early release of super savings, as well as out-of-pocket medical fees, which comprise about 20 per cent of spending on healthcare,

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN MEDICAL ASSOCIATION LIMITED, CONSUMERS’ HEALTH FORUM OF AUSTRALIA, AUSTRALIA. DEPT OF HEALTH, FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED

SMSF costs to blow out as $1.6m cap bites

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Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 17-Oct-17

Accountants involved in providing services to self-managed superannuation funds have called on the federal government to take a more lenient approach to new transfer balance rules. The government has imposed a $A1.6 million cap on tax-free balances, but it is requiring all SMSFs to report on their account activity, regardless of the size of their balance. The average SMSF balance for someone who is 60 and close to retirement is just $A285,000; accountants suggest only those SMSFs with a balance of more than $A1 million should have to report account activity under the new laws.

CORPORATES
AUSTRALIAN TAXATION OFFICE, INSTITUTE OF PUBLIC ACCOUNTANTS LIMITED

Bosses face super gap crackdown

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Original article by Michael Roddan
The Australian – Page: 1 & 5 : 14-Jul-17

The Australian Government will take legislative action to close a loophole that allows companies to reduce compulsory superannuation contributions if the worker has opted to make voluntary contributions via salary-sacrificing. At present employers can legally pay less than 9.5 per cent of an employee’s salary into their super fund by basing it on the worker’s post-sacrificing wage. The reform is one of several recommendations of a report that was jointly produced by several regulatory agencies.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN TAXATION OFFICE, AUSTRALIA. FAIR WORK OMBUDSMAN, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF EMPLOYMENT, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN