Mixed response to new reporting requirements for super funds
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Federal Minister for Superannuation and Corporate Law Senator Nick Sherry's announcement regarding the reporting of superannuation returns has been met with a mixed response.
The chief executive of the Association of Superannuation Funds of Australia (ASFA), Pauline Vamos, said superannuation fund members would benefit from the new requirement to include long-term investment returns in member statements.
But the Shadow Minister for Superannuation and Corporate Law, Chris Pearce, believes that under the new regulations "confusion will rein", with members being provided with "two conflicting sources of information".
Pearce said the use of league tables created by the Australian Prudential Regulatory Authority (APRA) create "misleading" comparisons of super fund performance by aggregating each fund's return on its total investment.
Furthermore, Pearce said consumers must now choose to base their decisions on the APRA data, or on the individual investment performance reported in the member statements, labelling this a "disastrous contradiction".
"Should Australians be guided by APRA's return on asset analysis or by individual investment selection performance of an actual fund?" Pearce asked.
But Vamos believes the changes would "help the Australian public to better understand the nature of super as an investment".
Vamos said the Government had "acted responsibly" to help educate super fund members and return the focus of debate and discussion to longer-term matters.
Vamos also said she was pleased the Government had worked in consultation with the industry, allowing super funds flexibility in the start-up phase of the new regime.
"The other important result is that the ability to provide this information electronically will be enshrined in law," Vamos said. This move would result in lower costs and greater flexibility for members, Vamos said.
Yesterday, the Minister for Superannuation and Corporate Law, Nick Sherry, announced regulatory changes that will see superannuation funds required to disclose more information to members.
Sherry said the regulations, flowing from Corporations Law amendments, would require funds to disclose five and 10-year returns in periodic member statements to help retail investors better understand their superannuation.
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