The Federal Government is finding itself under increasing pressure from all segments of the superannuation industry over its failure to provide sufficient detail around its Your Future, Your Super legislation, particularly the super fund performance test.
The Senate Economics Legislation Committee has heard from virtually all parties that it is almost impossible to determine what the new regime will look like in the absence of the Government providing the fine detail of its regulations.
The committee has been told by a range of parties, including Mercer, that implementation of the legislation needs to be delayed beyond 1 July, this year, and that a significant consultation period will be needed once the regulations are ultimately released.
Mercer senior partner and superannuation specialist, Dr David Knox said the new arrangements would place increased responsibility and pressure on employers who would be left unprepared under the current legislative timetable.
“Employers need to be given time and the 1 July start date is impractical,” Knox told the committee’s hearings today.
Both Mercer and the McKell Institute also warned that the super fund performance test would risk driving down superannuation funds as fund trustees became more conservative and limited the range of investments they were prepared to pursue.
As well, the McKell Institute argued that any performance test which excluded the impact of fees risked distorting the market.