ASIC warns super trustees on misleading communications

A major regulator has called on superannuation trustees to provide “helpful and balanced” communications to members regarding the Protecting Your Super reforms, ahead of the package taking effect on 1 July.

The Australian Securities and Investments Commission (ASIC) told superannuation industry associates that any information provided to members needed to be balanced and factual rather than misleading, warning them that it would work closely with the Australian Prudential Regulation Authority (APRA) and Australian Taxation Office (ATO) to ensure the reforms were implemented properly.

“ASIC expects superannuation trustees to implement the changes in a timely manner and communicate responsibly – their communications need to help their members,” ASIC Commissioner, Danielle Press, said.

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“It is not appropriate for trustees to encourage all members to maintain insurance – many members with inactive accounts will be better off allowing the insurance to lapse. Similarly, trustees should not be urging all members with low-balance accounts to keep their account within the fund as this may not be in the best interests of members.

“How a trustee communicates with their members about the PYSP changes will give us an indication of the trustee’s commitment to members’ best interests.”

The suite of changes would include much-debated reforms to make insurance opt-in on inactive accounts, impose fee caps on low-balance accounts, and remove exit fees for moving money from super accounts.

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