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Stronger Super

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

Chapter 3: Investment governance

Recommendation 3.1

That section 52(2)(f) of the SIS Act be amended to include 'the expected costs of the strategy, including those at different levels of any interposed legal structures and under a variety of market conditions', as one of the factors to which APRA fund trustees must 'have regard'.

Government response

Support in principle

The Government considers that trustees should have regard to the costs of their investment strategies but will consult with relevant stakeholders on design and implementation issues.

Recommendation 3.2

An enforceable 'performance fee standard' should be developed by APRA in consultation with industry.

Government response

Support

The Government, in conjunction with APRA, will determine parameters under which trustees can pay performance fees to fund managers, and will consult further with relevant stakeholders on design and implementation issues.

Recommendation 3.3

No performance-based fees may be paid by the trustee of a MySuper product unless the payment conforms with the 'performance fee standard'.

Government response

Support

The Government, in conjunction with APRA, will determine parameters under which trustees can pay performance fees to fund managers in respect of MySuper products, and will consult further with relevant stakeholders on design and implementation issues.

Recommendation 3.4

That section 52(2)(f) of the SIS Act be amended to include 'the taxation consequences of the strategy, in light of the circumstances of the fund', as one of the factors to which APRA fund trustees must 'have regard', and to ensure that trustees consider those taxation consequences when giving instructions in mandates to investment managers.

Government response

Support in principle

The Government agrees in principle with this recommendation and will consult with relevant stakeholders as to how it could be implemented.

Recommendation 3.5

That section 52(2)(f) of the SIS Act be amended to include 'the availability of valuation information that is both timely and independent of the fund manager, product provider or security issuer', as one of the factors to which APRA fund trustees must 'have regard'.

Government response

Support in principle

The Government considers that trustees should have regard to valuation information but will consult with relevant stakeholders on design and implementation issues.

Recommendation 3.6

All large APRA funds should publish their proxy voting policies and procedures, and disclose their voting behaviour to members on their websites.

Government response

Support in principle

The Government considers that large APRA-regulated funds should publish proxy voting policies and procedures but will consult with relevant stakeholders on design and implementation issues.