Superannuation choice and disclosure update

The Commonwealth Government is expected to shortly finalise drafting on two exposure draft bills relating to superannuation choice and disclosure.

Superannuation choice
The Superannuation Legislation Amendment (Governance) Bill 2015: Extending superannuation choice to enterprise agreements aims to extend choice of superannuation funds to employees covered under enterprise agreements.

Currently, employers are required to comply with choice of fund requirements, but there is an exemption for contributions made in accordance with enterprise agreements or workplace determinations. The proposed Bill would remove this exemption for enterprise agreements or workplace determinations that are made after 1 July 2016.

The Bill is in response to recommendation 12 of the Financial System Inquiry Final Report.

Product disclosure
The Superannuation Legislation Amendment (Transparency Measures) Bill 2015: Product dashboards aims to refine the existing choice product dashboard and portfolio holdings disclosure requirements which were introduced in 2012 but have been delayed under ASIC Class Order [CO 14/443] until 1 July 2016.

Currently, larger superannuation funds must provide a “product dashboard” (a summary of information for consumers) for all the fund’s choice products. Under the new Bill, a trustee of a regulated superannuation fund with five or more members will only be required to produce a choice product dashboard to the fund’s 10 largest choice investment options, as measured by funds under management. Regulations will prescribe how this is to be displayed and what information it should include.

The product dashboard requirements will apply to both retail and industry super funds, but not platforms.

The Government is seeking to introduce legislation in early 2016 with regulations being made after the legislation receives Royal Assent.

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