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The Government may be considering changes to its latest insurance Bill that would allow super funds to continue providing opt-out insurance to new members under 25 and those with balances under $6000 who are in high-risk jobs.
Speaking at the Rice Warner conference in Canberra this week, Liberal Senator Andrew Bragg, said the Coalition Government remained committed to the Putting Members’ Interests First Bill but hinted that it may still be considering the question of high-risk occupations – something AIST has called for, along with other amendments. It is also expected that there will be amendments to extend the date of implementation. AIST has argued that the Bill’s proposed commencement date of 1 October 2019 is unworkable.
Parliament will resume on 9th of September and is expected to vote on the legislation if amendments are decided/bedded down in time. In its original form, the Bill stopped all new members aged under 25 and those with “active” super balances below $6000 from being automatically defaulted into life or disability insurance.
Key amendments AIST has advocated include:
The Australian Prudential Regulation Authority (APRA) has revealed its plans to introduce a traffic light system to rate super fund performance.
Appearing before the Parliamentary Standing Committee on Economics last week, APRA deputy chair Helen Rowell said APRA was planning to collect data for a fund performance assessment system that would report metrics relative to several absolute and relative benchmarks.
Ms Rowell said APRA would focus first on the performance of MySuper funds, moving next to the Choice sector, where there are an estimated 40,000 products.
The Australian Financial Review subsequently reported in an exclusive published on Tuesday that APRA will present this information in a traffic light system.
The move by APRA to collect and publish performance data follows the release of Graeme Samuel’s capability review of the regulator back in May, which called for the regulator to take up this role.
AIST welcomed APRA’s move to develop objective performance benchmarks, noting that this would help in the assessment of the overall efficiency of the super system and potentially lead to the development of a super fund comparator tool for consumers. We have urged APRA not to delay assessing under-performing funds in the Choice sector.
AIST has called for guidance from the regulator on proposed requirements concerning the way funds handle member complaints on social media.
AIST’s submission to the Australian Securities and Investments Commission (ASIC) on internal dispute resolution (Update to RG165) says clarity is needed about the extent of the fund’s responsibility to monitor social media and what constitutes a “complaint”.
While AIST acknowledges that social media is now a legitimate avenue for members to make complaints, it notes that anecdotal feedback from funds is that at an industry level, less than 50 percent of people funds attempt to contact via social media respond to the fund.
AIST’s submission also calls for more clarity on ASIC’s definition of complaints, particularly as the regulator has proposed reducing the maximum IDR timeframe from 90 to 45 days. We also call for a deferral of the commencement date of the new requirements and note that the introduction of a shorter IDR timeframe of 30 days for certain complaints would be unworkable.
AIST has recommended that a complaints data and reporting framework be established to ensure that co-ordinated approach across funds, ASIC and the Australian Financial Complaints Authority (AFCA).
For further information contact AIST’s senior policy analyst, Karen Volpato on firstname.lastname@example.org
AIST has called for systemic gaps in disclosure and reporting to be addressed to ensure new ASIC product intervention powers are effective.
In a submission to the Australian Securities and Investments Commission (ASIC) on its proposals for guidance on exercising its product intervention powers, AIST argues that for the powers to be effective, their implementation must be accompanied by addressing systemic gaps in the disclosure and reporting framework.
Under the new powers, ASIC can temporarily suspend the sale of products and services it deems to be a detrimental risk to consumers, even before a breach has occurred.
The new product intervention powers are aimed at giving ASIC a more proactive approach to reducing the risk of significant consumer detriment and allowing more timely and targeted intervention.
Additionally, AIST has advocated for a clearer delineation between the roles of APRA and ASIC to reduce the risk of regulatory overlap in relation to superannuation.
Financial counsellors have highlighted that identification requirements remain a key challenge faced by Indigenous Australians in accessing their superannuation.
Speaking at the Indigenous Super Summit held last week in Brisbane, the group of seven financial counsellors who work predominately with Indigenous clients noted that that they were spending an increasing amount of time supporting clients on superannuation issues at a cost of helping clients with other needs.
The Summit – attended by representatives from AIST, the wider superannuation industry and government bodies – included presentations from Danielle Press, Commissioner at ASIC, and Graham Whyte, Assistant Commissioner – Superannuation Individual Client Engagement at the ATO.
Ms Press reminded participants what was said by Commissioner Kenneth Hayne during the Royal Commission, in relation AUSTRAC guidelines that allow entities to follow particular identification and verification procedures for Aboriginal and Torres Strait Islander peoples. Ms Press highlighted that the Final Report states: ‘There is no reason for any entity not to have practices and procedures of these kinds and there is no reason for any entity not to have trained staff to use them’.
Attendees also discussed current solutions and new initiatives that funds are implementing and the need for continued collaboration between funds and service providers.
In his speech, Graham Whyte discussed how the ATO was working with both government and non-government partners to ensure Aboriginal and Torres Strait Islander people were getting the full value of the superannuation system.
In closing the Summit, AIST CEO Eva Scheerlinck Ms Scheerlinck encouraged attendees to take up the invitation from ASIC to work together to come up with an industry approach for red tape issues.
As a result of discussions throughout the day participants were provided with a comprehensive list of projects of what can be done to move beyond good intentions and implement real change in better meeting the need of Indigenous members. A full report of what was discussed at the Summit is currently being written and will be available early September.
15 August 2019