Super reporting in the spotlight
The Australian Securities and Investments Commission (ASIC) has released information to ensure superannuation trustees meet legal obligations to members in reporting material changes and significant events.
“Any decision that fundamentally affects a member’s investment, including a decision to transfer a member’s benefits without their consent, is a material change or significant event that must be disclosed to that member,” ASIC executive director of compliance Jennifer O’Donnell said.
The information is contained in an extension of ASIC’s review of disclosure practices QFS 163 I am a superannuation trustee. Do I need to notify members about member transfers without consent?, and is aimed at improving the clarity and timeliness of significant event reporting.
“It is imperative members are advised of these decisions clearly, early, and in a manner which will come to their attention, for example a personally addressed letter,” O’Donnell said.
“Delayed or obscure notices significantly affect a member’s ability to make an informed decision about whether to exercise their right to exit the fund.”
O’Donnell also warned communicating potential changes via product disclosure statements was insufficient.
“This is to ensure that members have clear information at the time that a decision affects them,” she said.
O’Donnell added trustees should also be aware it may be necessary to provide members with comparative information that helps them understand the nature and effect of the decision.
She said trustees should also take care not to drip-feed information about particular changes or individual events without explaining the consequences of the changes as a whole.
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