Confusion reigns on remuneration grandfathering
There is a danger corporate superannuation trustees will face an administration minefield if the Government does not move to clarify remuneration grandfathering arrangements, according to the Corporate Super Specialist Alliance (CSSA).
The organisation has called on the Government to provide greater clarity around the arrangements to enable fund managers to design remuneration models and to allow planners to appropriately structure their businesses.
Commenting on the current confusion, CSSA president Douglas Latto said there was a lack of clarity around how the grandfathering arrangements would work and whether, as was being indicated by the Federal Treasury, it would apply to current remuneration models for members prior to July 2013.
"Our understanding is that this will include commission, asset-based fees and member fees," Latto said. "Post July 2013, these options will not be available for new members, and the only way for a collective fee to be payable is via the intrafund advice fee."
He said indications were that the fee would be dollar-based and consistent across all MySuper members in a fund, regardless of the workplace variables.
"The result will be an administration minefield, with trustees potentially dealing with commission, member fees, asset-based fees, intrafund advice fees - possibly different for MySuper and Choice members - plus insurance cover with commission or without," Latto said.
He claimed this potential complexity was driving the focus back to the fund providers who were currently looking at ways to simplify the burden but had yet to find any definitive answers.
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