FOFA and MySuper cannot be considered in isolation
The Financial Services Council (FSC) has strongly warned against the MySuper legislation and the Productivity Commission's review of default superannuation funds under modern awards being viewed in isolation from the Future of Financial Advice (FOFA) changes.
As well, the FSC has urged against the Australian Prudential Regulation Authority (APRA) having a role in determining commercial tenders under the MySuper regime.
In an opening address to the Parliamentary Joint Committee (PJC) reviewing the MySuper bills, FSC senior policy manager Andrew Bragg said his organisation was unable to support the legislation giving APRA such involvement.
He said the legislation, as drafted, would remove competition, introduce cost and insert the prudential regulator as a commercial arbiter.
"It requires APRA to approve commercial tenders where the price is determined by the market," Bragg said. "This is not the role of our prudential regulator."
He said the two MySuper bills being considered by the PJC should not be considered in isolation from either other forthcoming MySuper legislation or the Future of Financial Advice (FOFA) changes.
As well, Bragg said the bills should not be considered in isolation from the Productivity Commission's review of default superannuation funds under modern awards.
"Our submission highlights the significant overlapping of the FOFA reforms and in particular the Productivity Commission review," he said.
"This occurs at a time when just 104 of the 196 regulated 'public offer' superannuation funds are listed and therefore permitted as default funds in modern awards."
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