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Following debate this morning, the Putting Members’ Interests First Bill – which contains measures to change insurance in super to an opt-in basis for new members under 25 and active account balances under $6,000 - has passed the Senate. The Bill contains amendments that push out the start date and provide potential carve outs for members in risky occupations.
While various amendments put forward by crossbenchers failed to win Senate support, the Bill was passed with amendments supported by the Government that:
While the extension to the commencement date is much-needed and welcome, trustees will now need to work through how they will practically implement the dangerous occupation exception, where it is relevant to their membership. Most trustees do not currently have the means to identify the occupations of their members.
Importantly, the Bill maintains a 1 November notice date for notifying members.
Implementation of the PMIF measures may cause confusion amongst fund members given the various changes and notifications required under both Protecting Your Super (PYS) legislation and PMIF.
Funds may also wish to consider the earlier transfer of inactive low balance members to the ATO (required by PYS legislation). This will allow consolidation of monies held by active accounts into members active accounts before 1 April.
AIST will be assisting trustees in the implementation of the measures.
The Bill now heads back to the House of Representatives.
For further information contact AIST’s senior policy manager, David Haynes at [email protected]
In a disappointing move, the Government this week has re-introduced a bill to provide an amnesty for employers that haven’t paid super to their workers.
If the amnesty law is passed, these employers will have to pay the outstanding super but will not be fined.
AIST has consistently opposed the amnesty as it creates an unlevel playing field, effectively rewarding bad behaviour by employers at the expense of employers that do the right thing.
Employers should always be required to make SG contributions for their employees, and non-compliant employers should not be given a get out of jail free card.
The Government’s original Bill for a 12 month amnesty was defeated in Parliament last year. Ahead of the Parliamentary debate on this bill, large numbers of employers who had not met their SG obligations lodged applications to the ATO to access the amnesty.
If the Government’s re-introduced Bill is passed by Parliament, these employers will be given a further 6 months after passage of the legislation to repay the unpaid super, with interest and pay an administration charge.
The Government has released draft legislation and regulations to correct technical and drafting defects with various laws including the Protecting Your Super legislation.
The consultation package does not include a solution to the ‘product versus account’ issue, despite APRA previously announcing that the Government will make amendments to “allow for the aggregation of a members’ interests in one or more products held within a superannuation account”. APRA has said that it supports funds proceeding on the basis that this change will become law at some stage, and this remains the case despite its omission in this round of law changes
The proposed amendments:
AIST will be making a submission in support of these changes. Submissions close on 27 September. Details of the consultation package can be seen here.
AIST is pleased to announce the appointment of Melissa Birks as Head of Advocacy.
Mel Birks – who is well known to many in the profit-to-member super sector - has 19 years’ experience working in senior roles across the industry. Her most recent role at ASIC was as Senior Specialist in the superannuation team where she provided technical analysis and strategic advice on consumer issues in relation to superannuation.
Mel Birks started her career in superannuation at the ATO, before moving to work with industry super funds in 2004 across stakeholder relations, strategy, marketing and communications. This includes working at Link Group, HESTA and Hostplus.
AIST CEO Eva Scheerlinck said Mel Birks’ depth of experience working with regulators and across the profit-to-member superannuation sector would ensure that AIST’s advocacy continued to be effective and targeted to improving the retirement incomes of all Australians.
“Mel’s broad skillset and her deep understanding of policy and regulatory landscape will be critical in this time of increased regulatory and public scrutiny of superannuation,” Ms Scheerlinck said.
Mel Birks replaces AIST’s former Head of Advocacy, Ailsa Goodwin, who has joined AIST-member fund, Cbus, as the fund’s Strategic Public Policy Advisor.
Ms Scheerlinck thanked Ms Goodwin for her valuable contribution to AIST’s advocacy, noting that AIST looked forward to working with Ms Goodwin in her new role at Cbus, particularly through her ongoing involvement with the AIST policy committee.
ASIC has this week remade the instrument about departed former temporary residents’ unclaimed superannuation disclosure with minor changes.
The new instrument, ASIC Corporations Unclaimed Superannuation – Former Temporary Residents 2019/873, will continue to provide relief for trustees from certain obligations in the Corporations Act 2001. Specifically, it will provide relief from the requirement to notify and give exit statements to departed former temporary residents when their superannuation benefits are paid to the ATO .
The relief is conditional on specified information for temporary residents being included in any product disclosure documentation and on the fund’s website and the trustee providing reasonable assistance as soon as practicable (and in any event within one month) if the former temporary resident asks the trustee about their interest in the fund. See media release 19-259MR.
A minor policy change was made in the instrument to shift the location for the website disclosure from the trustee website to the fund website. ASIC considered the fund website was a more appropriate location for disclosure because it was more likely to be accessed by temporary residents or departed former temporary residents. Members were also more likely to expect information about their entitlements to be available on the fund website.
The discussions and action plans undertaken at the 2019 Indigenous super summit were presented to a range of Members of Parliament including Assistant Minister for Superannuation, Jane Hume, to bridge the gap between government and the super industry in efforts to improve Indigenous super outcomes.
The report – which was heavily referenced in Parliament this week by Senator Malarndirri McCarthy as part of the wider debate on the Putting Members’ Interests First Bill - brings into stark relief the frustration felt by financial counsellors working with indigenous communities in assisting their clients with superannuation matters.
Meeting basic identification requirements of superannuation funds – such as having a driver’s license or passport - remains a key obstacle for Indigenous members needing to access information about their fund and/or process claims.
Other challenges include:
Delivering the report to Parliamentarians in Canberra, the Chair of the Indigenous Superannuation Working Group and AIST CEO, Eva Scheerlinck said the industry and the regulators were working towards standardized identification requirements and binding death nomination forms, but more needed to be done to improve outcomes and achieve consistency across the industry.
“While super fund representatives are working with regulators on an industry approach to some of the bureaucratic issues, there is also a need for greater collaboration between funds and services providers, such as financial counsellors to remove these hurdles,” said Ms Scheerlinck.
The report provides an outline on the industry can work together to improve Indigenous superannuation outcomes and includes a list of projects that the Indigenous Superannuation Working Group and funds are seeking to achieve prior to the next Indigenous Super Summit.