The proposal to insert the word ‘financial’ into ‘best interests duty’ as part of the Your Future, Your Super bill is Parliamentary overreach and will have upfront negative financial implications for funds and beneficiaries, according to Market Forces.
In its submission to the Senate Economics Legislation Committee, the advocacy group said it strongly recommended to reject the proposal. It said including the word ‘financial’ was unnecessary as the existing duty required no further legislative clarification or amendment.
It said amending the duty:
“The new duty will create legal uncertainty and is not consistent with limiting the financial burden on superannuation fund members. At the outset trustees will be obliged to incur costs for advice and compliance. For example, a suite of internal processes – those based upon the existing duty and case law that interprets it – are likely to require amendment,” the submission said.
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.