IQ Group recently hosted a table of leading lights in the super industry at the ASFA address in Melbourne. Our table included Philip Hind, a key influencer of the development and implementation of SuperStream. Philip, who is leaving the ATO in May, has been the most important individual in getting SuperStream to where it is today – complying contributions are over 85% and employers are saving hundreds of millions of dollars. Understandingly he was singled out by ASFA CEO Pauline Vamos who paid tribute to his achievements.
Addressing the attendees also was the Assistant Treasurer and Minister for Small Business, Hon Kelly O’Dwyer MP, who continued to outline the Government’s determination to press ahead with a range of superannuation and financial services initiatives. We may be heading to an election sooner or later this year, but the Government has made it very clear they have a program to implement.
In recognising the growing profile and importance of superannuation, Ms. O’Dwyer also underlined the Government’s intention to maintain and improve our world-class superannuation system. In her speech, Ms. O’Dwyer also released the Government’s proposal for the legislative objective of superannuation – supporting the recommendation of the Murray Review for it to be “to provide income in retirement to substitute or supplement the age pension” but not for intergenerational wealth transfers.
Ms. O’Dwyer mentioned that the Government will also be moving to extend the rights of individuals to choose their own superannuation fund, a right that doesn’t currently exist for everyone covered by an enterprise agreement. Since making these comments, the Government has introduced legislation to the Parliament to achieve this.
At the same time, the Government has also introduced new disclosure measures to Parliament, to require disclosure of the details of a super fund’s assets, and the publication of a product dashboard for many more funds – so that consumers can better compare the investment returns and risks of different products.
Also outlined to attendees was the intention for the Government to continue to negotiate the governance reforms with the Senate. It was interesting to hear Ms. O ’Dwyer’s, view that she expected the measures to pass. These are the reforms that will require super funds to have at least one-third independent directors (including an independent chairperson), and to meet higher governance standards. Interesting times indeed.
Also foreshadowed – and which the Government has subsequently delivered – Productivity Commission reviews into the competitiveness and efficiency of the superannuation industry, and the development of a new model for the selection of default super funds.
Perhaps most interestingly – and this hasn’t been picked up in the media – M O’Dwyer said that she wants to improve superannuation outcomes for women and people who have had a career break.
The Government has heard a range of suggestions on how we can bridge this gap. They range from superannuation on government payments, to more flexible contribution rules to facilitate catch-up contributions.
The challenge for us now is how we can target changes to where they will make the most difference to savings behavior and retirement incomes.
This hasn’t been flagged by the government before in such clear terms, and reflects a desire to re-focus the system on everyday Australians.
This is an ambitious program that will translate into much implementation work for the super industry, and those of us who are there to assist it.