Skip to content
Skip to main menu
Australian Government - Stronger Super website

Stronger Super

Attachment
Government Response to the Review into the Governance, Efficiency, Structure and Operation of Australia's Superannuation System

Chapter 10: Regulatory settings

Recommendation 10.1

APRA's mandate should be broadened to include the task of overseeing and promoting the efficiency of the funds it regulates and the system in which they operate.

Government response

Do not support

The Government will ensure that the Financial Sector (Collection of Data) Act 2001 enables APRA to collect data that will allow information to be made available on the operation and efficiency of superannuation funds.

Recommendation 10.2

APRA should be given general standards-making power in relation to superannuation (including prudential matters) in order to address the recommendations in this report and to drive efficiencies in the industry.

Government response

Support

The Government will give APRA the power to issue prudential standards in relation to superannuation. Prudential standards will allow APRA greater flexibility to respond to industry developments and enforce the MySuper criteria.

Recommendation 10.3

That APRA's mandate be broadened to include the collection and publication of data aimed at the efficiency and outcomes of superannuation funds and research into issues arising from that data to assist trustees in achieving better outcomes for members.

Government response

Support

The Government will broaden APRA's ability to collect and publish information on the operation and efficiency of superannuation funds.

Recommendation 10.4

Legislation should be amended to give APRA an administrative power to impose fines, contestable in a court, as an alternative to criminal prosecution in relation to selected SIS Act provisions.

Government response

Support in principle

The Government will consider this recommendation further and will consult with relevant stakeholders.

Recommendation 10.5

The Government should explore with APRA and ASIC ways in which the two regulators can work more closely together in discharging their superannuation mandates, in particular in implementing the Review's recommendations in relation to MySuper and increased efficiency more generally.

Government response

Support in principle

The Government will ask APRA and ASIC to work closely together to implement these reforms, noting the existing strong working relationship between the regulators.

Recommendation 10.6

The Government should ensure that the ATO is adequately resourced to continue its existing superannuation responsibilities, including the new functions it will administer under SuperStream and other Panel recommendations.

Government response

Support

The Government will recoup the cost of implementation through industry levies.

Recommendation 10.7

The Government should consider arrangements for the Productivity Commission to assess, in relation to the Review's recommendations implemented by the Government, five years after the Government's response to this report:

  1. the implementation and impact of the MySuper regime;
  2. the implementation and impact of the SuperStream changes; and
  3. the functioning of the market for retirement products.

Government response

Noted

The Government will consider arrangements for such an assessment, including its timing and scope.

Recommendation 10.8

The Government should have the Productivity Commission assess and advise on possible improvements to the regulatory framework for superannuation five years after the Government response to this report.

Government response

Do not support

The Government considers its response to the Review provides a long-term blue-print for the regulatory framework of superannuation and an important outcome is a period of certainty for members, employers and the superannuation industry.

Recommendation 10.9

The SIS Act should be amended so that the successor fund transfer test is one of 'no overall disadvantage' rather than 'equivalence'.

Government response

Support in principle

The Government will consider this recommendation further in the context of the work currently underway on product rationalisation in other industries.

Recommendation 10.10

The Federal Court should be given new jurisdiction to determine and facilitate product rationalisation in the superannuation industry where the successor fund transfer regime (as amended by the recommendation made in this Review) still does not fulfil legacy product rationalisation objectives.

Government response

Support in principle

The Government will consider this recommendation further in the context of the work currently underway on product rationalisation in other industries.

Recommendation 10.11

CGT rollover relief should be given to superannuation funds in the terms previously afforded by the Tax Laws Amendment (2005 Measures No.2) Act 2005 and should be permanently available to the industry.

Government response

Do not support

The Government does not support an extension of the existing capital gains tax (CGT) rollover relief, however, does support in principle, appropriate relief for superannuation funds which are required by APRA to merge in order to meet MySuper licence conditions and will consult with relevant stakeholders on implementation aspects.

Recommendation 10.12

New Retirement Savings Accounts should not be allowed to be established after MySuper becomes effective and a mechanism should be considered for facilitating existing RSAs to be transferred to MySuper or other superannuation products.

Government response

Do not support

Retirement Savings Accounts (RSAs) will be able to be offered as a choice product. However RSAs, which are capital guaranteed, will not be able to meet the conditions to be a MySuper product and therefore will not be able to be offered as a default product.

Recommendation 10.13

New Approved Deposit Funds should not be allowed to be established after MySuper becomes effective and a mechanism should be considered for facilitating existing ADFs to be transferred to MySuper or other superannuation products.

Government response

Do not support

APRA will continue to monitor the role of Approved Deposit Funds.

Recommendation 10.14

The Government should legislate to abolish the member protection rules.

Government response

Support in principle

The Government will consider this recommendation further and will consult with relevant stakeholders.

Recommendation 10.15

The SIS Act should be amended to create a specific RSE licence class for trustees of ERFs. ERF trustees should be subject to very similar duties as apply to MySuper trustees (bearing in mind the different functions and characteristics of ERFs).

Government response

Support in principle

The Government supports separate licensing of eligible rollover funds (ERFs) and additional duties for trustees of ERFs, and will consult with relevant stakeholders on implementation aspects.

Recommendation 10.16

In order to have ERFs more effectively fulfil their intended function:

  1. The RSE licence for each trustee of an ERF should be subject to the condition that they actively cross match with any active fund seeking the service. All ERF licensees must provide an online facility for people to search for lost super; and
  2. All funds should be required to cross match with ERFs for a new member.

Government response

Support in principle

The Government supports cross matching of accounts in the ERF sector to assist members to locate and consolidate their lost superannuation and will consult further on implementation issues.

Recommendation 10.17

The name of the SCT should be changed to reflect more appropriately its role. 'Superannuation Appeals Tribunal' is suggested.

Government response

Do not support

The Government does not support this recommendation. The Superannuation Complaints Tribunal (SCT) deals with superannuation complaints relating to the decisions and conduct of trustees, insurers, and other decision makers, rather than appeals.

Recommendation 10.18

The SIS Act should be re-written and restructured to separate and to identify clearly those provisions that are common for all sectors of the superannuation industry and those provisions that are only applicable to particular sectors under the choice architecture model.

Government response

Support in principle

The Government will consider this recommendation further and will consult with relevant stakeholders.

Recommendation 10.19

GEERS should be extended to cover up to three months of unpaid employer SG Act contributions.

Government response

Do not support

The Government announced as an election commitment that the General Employee Entitlement and Redundancy Scheme (GEERS) would be replaced with an improved Fair Entitlements Guarantee. The Government announced measures in Securing Super to strengthen SG compliance. The Government does not consider further changes necessary at this stage.