Govt urged to provide time and certainty on FOFA and Stronger Super
Financial planners are not the only ones concerned about the cost of implementing the Government’s changes to financial services, with superannuation fund trustees also asking for a longer period of transition and greater certainty about the ultimate regulatory environment.
The superannuation fund trustees’ concern is reflected in submission to the Treasury from the Association of Superannuation Funds of Australia (ASFA) relating to the introduction of MySuper, in which it says a longer transition period will be needed.
The submission warns that the types of changes envisaged by the Government are of a scale and degree of interrelatedness that will not only prove expensive, but will pose considerable risks with respect to altering member databases.
Further, the submission argues that rushing to meet deadlines will increase the risks for the superannuation funds, while any delays or changes to any aspect of either the Stronger Super or FOFA legislation would “significantly impact on trustees’ abilities to implement the required changes in an orderly and appropriately risk-managed fashion”.
“While ASFA supports both the Stronger Super and Future of Financial Advice (FOFA) reforms, it is important to note that compliance with both of these reforms will necessitate considerable changes being made to a mature and complex superannuation system,” the submission said.
“For trustees to be in a position to be able to make the threshold decision as to whether or not to offer a MySuper product necessitates a degree of certainty as to the regulatory requirements going forward,” it said.
The ASFA submission argues that instead of a three-month transition from 1 July 2013, with respect to MySuper the process should be extended to a year.
AUTHOR
Mike Taylor
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