The Federal Government is being urged to undertake detailed consultations with superannuation funds about how, precisely, its performance test will operate under the new Your Future, Your Super legislation.
Both AMP Limited and IOOF have used their submissions to the Senate Economics Legislation Committee to call for the detailed industry consultation warning that the absence of critical detail could prove to be significantly detrimental to both superannuation funds and their members.
The IOOF submission points to the fact that while the legislation outlines the need for a performance measurement it provides no specific detail beyond suggesting that the methodology be contained within yet to be determined regulations.
“The bill provides that details of performance measurement criteria will be set out in the regulations,” it said. “IOOF supports an extensive and robust consultation process to determine the content of these regulations.
“IOOF believes an industry consultation process should be established, providing input to the proposed performance benchmarking methodology that ultimately forms the regulations. As APRA has a role in determining which ranking formulae to choose, we suggest it would appropriate to include the Regulator in these consultations to ensure consistency and transparency of approach.”
For its part, AMP expressed concern that critical details to be contained in the regulations were not yet available.
“Without the regulations, and no formal indication of when these will be released, trustees are unable to understand the annual performance assessment methodology, determine the application of the performance assessment to their MySuper product or identify potential issues relating to its implementation,” the AMP submission said.
“The magnitude and absence of such critical details suggests that the Government has not yet decided what the requirements for the annual performance assessment should be. AMP raised this concern in our submission to Treasury in December 2020 and three months later, the situation remains unchanged; consequently, our concern has escalated.”