Superannuation funds to face competitive test

Superannuation funds will have to virtually compete on fees and performance to attract members under a new regime foreshadowed by the Federal Government in Tuesday’s Budget.

Under the Your Future, Your Super package regime announced by the Federal Treasurer, Josh Frydenberg announced an annual objective performance test for superannuation funds.

As well, superannuation funds will be required to hold Annual Members’ Meetings in the same fashion as the annual general meetings of publicly-listed companies.

He said that those funds that failed to meet those test objectives and were regarded as persistently underperforming would be prevented from taking on new members.

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“To protect members from poor outcomes and encourage funds to lower costs the Government will require superannuation products to meet an annual objective performance test,” he said. “Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.”

“The Government will increase trustee accountability by strengthening their obligations to ensure trustees only act in the best financial interests of members. The Government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of Annual Members’ Meetings,” Frydenberg said.