Industry welcomes Government’s Cooper policy

The Government’s measured response to the 177 recommendations put forth in the Cooper Review has been broadly welcomed by the industry, with agreement reached on most major issues.

Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds gave the Government’s response a nine out of 10, saying all the institute’s major concerns had been addressed.

The AIST had been concerned about the watering down of equal representation on trustee boards, with Jeremy Cooper recommending funds be able to opt out, and Reynolds welcomed the Government’s decision not to implement the policy.

The AIST also welcomed the Government’s decision not to adopt Cooper’s recommendation not to allow cross-subsidisation across investment choices.

“It was completely impractical — fees would have gone up rather than down so we were pleased to see that wasn’t introduced,” Reynolds said.

Reynolds was also pleased that changes would be introduced in a measured fashion, with the use of tax file numbers introduced first, followed by MySuper, and SuperStream being pushed back

“You can only do so many things at one time, and you need time to get them right,” she said, noting that less urgent changes like SuperStream and the introduction of intra-fund advice would be implemented on a longer-term time frame.

The industry faces an even bigger year of lobbying in 2011, working alongside the Government and regulators in order to flesh out many of the details of a lot of the policies, particularly MySuper, in order to get the changes in place by the July 2013 start date, Reynolds said.

The Government’s response was also welcomed by the Association of Superannuation Funds of Australia (ASFA), with chief executive Pauline Vamos particularly enthusiastic about the efficiency savings to result from the implementation of tax file numbers in super funds.

The Self-Managed Super Fund Professionals’ Association of Australia (SPAA) welcomed the Government’s decision not to adopt additional restrictions around in-house assets, but SPAA chairman Sharyn Long was disappointed the Government rejected Cooper’s recommendation to allow the Australian Tax Office to issue binding rulings in relation to SMSFs.

The Institute of Actuaries of Australia was particularly supportive of increased prudential standards making power in relation to super funds for regulator the Australian Prudential Regulation Authority (APRA).

REST Super welcomed the majority of reforms, especially around SuperStream, but urged the Government to bring forward the introduction of the use of tax file numbers as primary identifier. REST chief operating officer Paul Sayer supported the retention of the current trustee board composition rules