ASIC has published a speech delivered by its Deputy Chair, Sarah Court which sets outs ASIC’s enforcement priorities for the superannuation industry in 2024 following its recent overall priorities statement.
ASIC has highlighted the important role of the trustee in safeguarding members’ super balances by eliminating poor practices and the obligation of boards to prioritise members in decision-making.
ASIC’s enforcement priorities in the superannuation sector are in three key categories:
- Member services failures;
- Misleading conduct, including greenwashing; and
- Failures to protect superannuation balances.
Member service failures
ASIC expects trustees to communicate proactively with members and deal responsibly with members’ money, with operational soundness through all phases of membership of the member, from early accumulation through to retirement and draw-down phase.
ASIC has highlighted problems with complaints handling and death benefit claims handling.
ASIC’s focus will be on net zero statements and targets made without merit; the use of terms like ‘carbon neutral’, ‘clean’ or ‘green’ that are not founded on reasonable grounds; and the use of inaccurate labelling or vague terms in sustainability-related funds.
If trustees make environmental, social or ethical claims to attract potential members, ASIC says those claims need to be backed with evidence and transparent about their basis.
Failure to protect superannuation balances
ASIC says members should be able to have confidence that their superannuation savings are not being eroded by unnecessary or inappropriate fees and charges, and that the products in which they are investing are designed to maximise retirement outcomes and sufficiently balance risk.
ASIC has focussed on the obligation of superannuation funds to proactively identify and consolidate multiple accounts within the fund, where it is in the members’ interest to help their members avoid extra fees.
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.