Industry superannuation funds are accusing the Government of unprecedented legislative over-reach within its Your Future Your Super legislation particularly around powers to ban superannuation fund investment and expenditure decisions.
Both Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees have signalled they will be pushing for the legislation to be reviewed by a Senate Committee.
Australian Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck said that while her organisation supported the intent of the legislation it stopped well short of addressing under-performance across the superannuation sector.
What is more, she said that the legislation lacked important detail around the power of the Government to ban any super fund or investment or expenditure regardless of whether it was in members’ best interests.
“This is an extraordinary over-reach of power with no precedent in this country,” Scheerlinck said. “The change removes the certainty needed for long-term investing and risks significant impact on investment outcomes for members.”
For its part, the ISA described the Government’s proposed new powers as “regulatory kill switch” which was unnecessary and an ideological overreach.
“Reports today suggest extreme elements of the Coalition party room will try and use this power to ban fund ESG investment or vital investments in affordable housing. An added regulation making power is equally concerning, it appears it would allow the minister to dictate what is in members' best financial interest giving politicians unfettered control over workers' super.”
However, the ISA’s own approach calls for legislative changes which would force the closure of underperforming funds.