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AIST will be seeking substantial amendments to the Government’s Your Super, Your Future draft legislation, having identified a number of issues that could negatively impact member outcomes.
While we are still finalising our submission to Treasury and consulting with members, it is clear that amendments will be needed to the bills, notably around ‘best financial duty’ and ‘performance assessment.’
AIST’s concerns about carve outs for Choice products in the draft legislation was covered this week across online media sites and the Guardian.
The legislation is contained in three bills which are open for submissions until 24 December 2020. The Bills leave a significant amount of important detail to be determined by regulation rather than by legislation, regulations are not subject to consultation and parliamen tary debate.
For further information, contact AIST’s Head of Advocacy, Mel Birks at firstname.lastname@example.org
After consultation with members, and in light of the ongoing and substantial legislative and regulatory change, the Insurance in Superannuation Voluntary Code of Practice owners, AIST, ASFA and the Financial Services Council have jointly agreed to delay the commencement of the Code by six months to 1 January 2022.
Since the Code was first drafted three years ago, many funds have implemented key elements of the Code and have invested significantly in improving areas of member experience in relation to insurance in superannuation. However, as a result of legislative changes, particularly Protecting Your Super and Putting Members’ Interests First, many parts of the original Code have been overtaken by legislation and further changes are in the pipeline. The introduction of legislation arising from the Royal Commission and changes to regulatory requirements (such as changes to the APRA Insurance in Superannuation Prudential Standard) may mean that more parts of the Code become outdated.
The delay in the commencement of the Code will allow time for the regulatory landscape to settle. It will also allow Code signatories to focus on improving member experience where member outcomes can be improved by going beyond legislated requirements, including the important work to strengthen protections for vulnerable consumers.
A number of funds are well progressed with their implementation plans and this delay does not prevent funds complying earlier if they wish.
AIST is seeking member feedback on the best way to continue the valuable work on vulnerable consumers.
Labor is preparing for an “enormous fight” should the Government abandon the legislated timeline to increase the Super Guarantee to 12% by 2025.
Addressing the ACTU Trustees’ Forum last week, shadow treasurer, Jim Chalmers said Labor was well-armed for a fight over 12%, labelling claims that SG rises came at the expense of higher wages as “rubbish”.
“In the six years before this Government froze the Super Guarantee in 2014 wages grew at more than 3 per cent, about 3.3 per cent, but in the six years since they froze the Super Guarantee last in 2014, wages growth has been barely above 2 per cent – which you all know is historically low. This Government has the worst wages outcomes on record. We know from Mathias Cormann's burst of honesty that low wages growth is a ‘deliberate design feature’ of this Government's approach to the economy,” he told forum delegates.
“So when they say, if we freeze the Super Guarantee we'll see all this stronger wages growth, we know that's rubbish. It didn't happen last time when they claimed it would, and it won't happen this time.
“We've got some pretty strong arguments in this big fight that's coming up. I feel like we're well-placed. The facts are on our side and we've got the capacity to prosecute that argument really well. It's going to be an enormous fight, but we're well armed for it. If and when we win it, we can focus on what really matters: the positive role that super can play in kickstarting and then turbocharging this recovery.”
In 2021 AIST will be launching a series of new Special Interest Groups for members to meet online to discuss topics of common interest.
AIST is calling on members interested in volunteering for Chair and Deputy Chair roles for the following proposed Special Interest Groups:
People & Culture
Insurance in super
Digital & technology
Legal & regulatory
Chief Financial Officers
Marketing & communications
Chairs of remuneration committees
Chairs of audit & risk committees
These groups will meet online, at least quarterly and the topics for discussion will be driven by the Group through the Chair and Deputy Chair. SIGs can invite special guest speakers or be a forum for the sharing of collective wisdom. SIGs are open to AIST members only. Each SIG meeting will attract 1 CPD hour.
If you think you would like to be Chair or Deputy Chair of one of the Special Interest Groups listed above, you can submit your expression of interest to email@example.com.
The final public hearing of the House of the Representatives Standing Committee on Economics into superannuation and the banks will be in on December 9, 2020.
The hearing is listed on the Parliamentary website, but the agenda is currently empty. At the last hearing, the Committee’s Deputy Chair, Dr Andrew Leigh said Diversa Trustees would be called.
The number of applications to the COVID early release scheme for the week ending 22 November was 20,000, about 7000 of which were repeat applications.
According to the latest APRA data, the total number of initial applications since inception of the scheme is around 3.4 million and repeat applications are 1.4 million.
More than $35 billion in early release has been paid out by super funds since the scheme began.
Australian economic activity rose 3.3 per cent in seasonally adjusted terms in the September quarter 2020, according to figures released by ABS this week.
Head of National Accounts at the ABS, Michael Smedes said: “Following the record 7.0 per cent decline in the June quarter, Australia experienced a partial recovery in the September quarter. As a result, economic activity fell 3.8 per cent through the year to September quarter."
Reduced COVID-19 case numbers resulted in an easing of social distancing measures and trading restrictions across most states (Victoria being an exception) and territories during the September quarter.
Household spending drove the economy, rising 7.9 per cent due to increased spending on both goods and services. Spending on services rose 9.8 per cent, driven by spending on hotels, cafes and restaurants, health and recreation and culture as containment measures were relaxed. The easing of restrictions also increased demand for goods, which rose 5.2 per cent. Victoria's household spending fell 1.2 per cent, the only state to record a fall, as tighter restrictions were imposed.
Mr Smedes added: "Despite record quarterly growth in household spending, the level in September quarter was 6.8 per cent lower than that recorded in December Quarter 2019".
Compensation of employees rose 2.3 per cent as hours worked increased. Part-time employment also rose. The household saving to income ratio remained elevated at 18.9 per cent, a slight fall from 22.1 per cent in June quarter when household spending collapsed.
Net trade detracted 1.9 percentage points from GDP, the largest detraction since September quarter 1980. Imports of goods and services rose, predominantly reflecting increased demand for consumption goods as restrictions lifted. Exports of goods of services fell, as a result of weaker demand for Australian mining commodities and constraints on travel.
The current status of superannuation Bills currently before Parliament can be found here.