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23 Sep 2021 3 min read
In fact, Rice Warner estimated that there will be $4.79trn in funds under management in 2033.
The Hayne Royal Commission shone a spotlight on the superannuation industry – with consumers voting with their feet, and the Australian Prudential Regulation Authority (APRA) working on frameworks to better protect consumers and deliver member outcomes.
APRA’s finalised package of measures was due to take effect on 1 January 2020 to address areas for improvement in the regulatory framework and improve member outcomes. While some initiatives, including APRA’s inaugural Superannuation Heatmap, were successfully launched – many changes have been delayed due to COVID and the reprioritisation away from regulatory reform towards member support.
After a rocky 12 months, the reform agenda is back on the table with notable changes impacting both superannuation funds and employers – like the increases in the Superannuation Guarantee – and from the end of this year superannuation funds will automatically follow employees throughout their careers.
This last one will be achieved through the extension of how Tax File Numbers are used, and while seemingly a small change, is revolutionary in terms of how superannuation funds source new members. So in theory, if a young person gets a retail job during university, the superannuation fund they join then will follow them for the next few decades unless they make the conscious decision to change funds. It’s potentially a different kind of “set and forget”.
We are also seeing activity off the back of the Heatmap that was introduced in December 2019 with APRA following through on their commitment to “name and shame” and sanction providers that they deem to be underperforming. An interesting twist that may yet cause issues – while a superannuation fund is under sanction they cannot accept contributions for members. The question from employers will be, where do those contributions go in the meantime?
The ultimate aim of regulatory reform in the superannuation sector is to increase transparency and improve member outcomes. This may require a change in thinking, business strategy and systems to ensure they can meet new obligations.
ATO guidance increases evidence requirements for treaty claims through FTE structures.
The Association of Superannuation Funds of Australia (ASFA), in collaboration with JANA, has released its final Investment Manager Operational Due Diligence (ODD) Guidance Note, providing a practical framework to strengthen how superannuation funds assess and oversee operational risk
As debate intensifies ahead of the Federal Budget, this insight examines why incremental tax changes are no longer sufficient for Australia. It argues for meaningful, productivity‑focused tax reform that addresses growing reliance on personal income tax, system complexity and long‑term budget sustainability, while carefully considering broader reforms such as the GST to ensure fairness and economic resilience.
