The Bill includes the following:
Best Financial Interest Duty
Amends the SIS Act to introduce a best financial interests duty on trustees/directors
Introduces a new strict liability offence around record keeping obligations
Puts the evidential burden of proof for the best financial interests duty on the trustee.
The Bill removes the 5% threshold for Portfolio Holdings Disclosure. All holdings will have to be disclosed from the 21 December 2021 reporting date.
Single default account
Amends the SIS Act so that an employer can only meet choice of fund requirements for new employees by paying super contributions to a “stapled fund” where one exists
Paying into a default fund no longer satisfies the choice of fund requirements where there is a stapled fund
Amends the SIS Act to introduce an annual performance test for MySuper products only
Leaves performance tests for choice products including Trustee Directed Products to be introduced by regulation
Introduces a prohibition for funds accepting new beneficiaries when they fail the performance test
Introduces requirements for funds to notify members of underperformance, though the detail of this is left to regulation
Makes failing to comply with the notice requirements or prohibition on accepting new members a contravention of covenant
Leaves the methodology and criteria for performance assessment to be determined by regulation – without including administration fees in this
Allows regulations to be made that will prohibit funds creating new products to avoid being subject to a performance test
Passed the Senate on 17 June with amendments removing the regulation-making powers in ss52, 52A. Legislation has also pushed stapling start date to 1 November.
Will now return to the House of Reps
Passed by House of Reps on 4 June with amendment that removed Section 117A power to ban investments and expenditure.