Chapter 2

Views on the bill

This chapter considers the views expressed in evidence received by the Senate Economics Legislation Committee (the committee) on the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 [Provisions] (the bill).
Evidence was received from submitters in their professional capacity—that is individuals who are academics or on behalf of organisations—with submissions received from academics, research centres, lawyers, advocates, industry groups, unions, super funds and government agencies.
Whilst there was significant in-principle support for the policy intent of the bill, many of those submitters suggested alternative approaches to achieve the same ends. There was, however, little consensus across submitters with inconsistent approaches suggested to achieve the desired outcomes.
Evidence to the inquiry predominantly addressed all or a selection of the bill's schedules. Many submitters also raised issues that relate to the regulations which will themselves be subject to a consultation process.

Views relating to Schedule 1 of the bill—Single default account

There were varying degrees of commitment expressed towards the single default account provisions in Schedule 1 of the bill.
Some submitters expressed their full support for single default accounts.1
The Australian Prudential Regulation Authority (APRA) was supportive of efforts to reduce unintended multiple accounts in superannuation:
APRA expects that the reduction in the aggregate number of member accounts across the system, and subsequent reduction in aggregate fees that should result, will act as an additional catalyst for further fund consolidation. This will especially be the case for those funds that do not otherwise have a growing membership base and are already facing sustainability challenges.2
Likewise, Financial Services Council expressed their strong support, stating that stapling members to a single high quality fund, to be the most appropriate approach in preventing duplicate accounts. Further, they added:
The FSC's analysis shows that implementing the stapling recommendation should be a priority for Parliament as it is estimated to save consumers almost $1.8 billion in excess superannuation fees in the next three years.3
Prime Super commented that they too support '…the concept of stapling a superannuation account to an individual to prevent the creation of duplicate accounts in the system'.4
Super Consumers Australia (SCA) stated that it believed stapling would:
…end the inefficiency and retirement income erosion created by millions of unintended multiple accounts. It will also make super much easier for people to manage.5
Further noting:
There are 850 000 unintended multiple accounts created per financial year, so the cost of delay, even for a year, would be significant. According to the Productivity Commission, holding multiple accounts can reduce the typical worker's balance on retirement by $51 000, and underperforming MySuper products can reduce the typical member's balance by $502 000 by the time they retire. Holistically, this package will benefit superannuation consumers, not harm them. It's important its measures are considered as a whole and not in isolation.6
Other submitters supported single default accounts in-principle,7 with wording to the extent included in the following example from CPA Australia and Chartered Accountants Australia and New Zealand (CPA and CA) '[i]n principle, we generally support Schedule 1.8
Meanwhile, a few submitters supported more generally addressing the issue of people having multiple accounts,9 for instance HESTA commented that it '[s]upports the need for measures to address multiple accounts'.10
Whereas the McKell Institute Victoria (McKell) recommended that Schedule 1 of the bill not be passed.11
Set out below are the views on Schedule 1 of the bill, starting with the broader views before narrowing in on the specifics of the bill.


Several submitters made the point that the bill may entrench the position of the most popular funds.12
Rainmaker Group shares this view based on the following analysis:
Data published by APRA in its Annual Fund Level Statistics, Table 12, that details the age group profile of super funds revealed that for 2020, of the 22.5 million member accounts, 2.7 million being 12 per cent, were owned by members under the age of 25.
75 per cent of these accounts owned by these young people aged below 25 years are held within just 10 super funds, 60 per cent are held by just five.
83 per cent of this biggest-10 share is held by the leading industry super funds of REST, AustralianSuper, Sunsuper, HostPlus, Cbus and HESTA.
Moreover, these market ranks have been remarkably stable through the five year period to 2020 as the data reveals that four of the biggest five super funds for young people have been ranked in the biggest-5 throughout this period.13
On a related note, the National Tertiary Education Union (NTEU) argued that stapling negatively impacts industry super funds that are associated with careers that are not a common starting point. The NTEU is concerned that stapling will mean a 'net outflow of members of the [UniSuper] fund and a concomitant reduction in overall funds under management. In turn this may threaten retirement outcomes for existing UniSuper members'.14
Dr Scott Donald is of the view that stapling will have an effect on competition:
Overall, then, I believe the effects of this initiative will be to create several new industry behemoths, that alongside AustralianSuper, SunSuper and Aware Super will dominate the industry and Australian capital markets.15

Issues for super fund members

Three main issues were raised by submitters for super fund members: (1) potential risk of being stapled to an underperforming superannuation fund; (2) potential effects on insurance cover; and (3) the reforms not addressing the existing stock of multiple accounts.

Being stapled to an underperforming superannuation fund

A number of submitters suggested that super fund members could be stapled to an underperforming superannuation fund.16
Submitters noted this concern with respect to young workers. AustralianSuper commented:
It may encourage providers to sell members into products early, regardless of the suitability of the product for that member's life stage, the performance of the fund, suitability of insurance offer or the member's financial risk profile.17
The Australian Council of Trade Unions (ACTU) noted that due to the steps involved with a young worker starting their first job—create a bank account and encouraged to create a superannuation account—and the stapling rule in the bill, this may result in workers remaining in their single default account unless they switch later in life.18
McKell argued that '[s]tapling increases the probability that younger members will stick with a fund throughout their life and therefore increases the long term pay off to superannuation funds from increasing their advertising and marketing aimed at younger members'.19
Mercer argued that there could be an increase in marketing by some superannuation products, making the point that information about superannuation options should be easily available throughout the whole career of an individual, in particular, focussing in on ages 15 to 25 may not be in the individual's best long term interest.20
Submitters suggested there should be additional requirements before stapling. The Ai Group argued that there should be an additional quality filter for stapled funds.21 Industry Super Australia (ISA) suggested that members only be stapled to funds that have passed a robustness test.22
In evidence to the committee, Mr Xavier O'Halloran of SCA rebutted the point that workers will be stapled into underperforming funds:
In our submission you'll find we've graphed out some of the funds that would likely fail the proposed test versus those that are at the lower end, in terms of net investment returns, and there's a high level of correlation of the 20 funds that we identified that may fail. Sixteen of them are at the lowest end and those four that aren't in the lowest quarter of funds are only just above it, so there's really no concern there for us. This test is identifying poor-performing funds.23
He further noted:
I don't understand a lot of the industry submissions that were made where they put across an argument that people would be stapled into an underperforming fund for life. The incentives under this test to improve mean that that's not going to happen in the medium to long term. There'll be a slight transition but there is no incentive.24
SCA also submitted that stapling is not the issue here, stating '[w]e agree people should be defaulted into quality funds, but this is a flaw of default system, not stapling'.25
In response to a question on notice, Department of the Treasury (Treasury) estimated that '21 out of 77 MySuper products are underperforming…[and] [t]hese products held over $100 billion in assets across 3 million accounts and charged $1.2 billion in fees annually'.26

Stapled to a superannuation fund with unsuitable or inadequate insurance cover

A number of submitters highlighted that the insurance cover included in the superannuation product a worker is stapled to may be unsuitable if a worker moves to another industry.27
Cbus, an industry super fund for the building, construction and allied industries stated:
Many Cbus members do not join the building and construction industry as their first job. For these workers, staying in their first fund may mean they and their dependents cannot claim against insurance if tragedy strikes.28
In her evidence to the committee, Ms Kim Shaw of Maurice Blackburn Lawyers (MBL) provided the example of a client who was an interstate truck driver with an acquired brain injury and had his total and permanent disability claim accepted by his industry super fund but not by his retail super fund who deemed his occupation uninsurable.29
Ms Shaw also gave evidence about occupational exclusions and explained that a worker shifting from an occupation in which they had default cover provided through HostPlus to a riskier occupation would not lose the cover but the issue might then be one of whether the cover is appropriate for the occupation that they're moving into.30
To mitigate this issue, two submitters suggested communication strategies be implemented. MBL wanted communication to people changing roles informing them that their insurance may not be appropriate.31 SCA suggested there be enhanced notification for workers in the 'dangerous occupation exemption' industry.32
In its submission, Cbus recommended an exemption to stapling for workers in hazardous occupations:
Workers in the top quintile of hazardous occupations, including building and construction workers should not be stapled to their first fund, but rather continue to default into the appropriate industry-specific fund which offers insurance suited to their needs.33
Cbus also noted the single default account is inconsistent with the Putting Members Interests First Dangerous Occupation Exception:
As part of the Putting Members Interests First (PMIF) legislation, the Parliament recognised that certain occupations carry a higher degree of risk and though an amendment retained the ability for superannuation funds to provide default insurance to protect members working in dangerous jobs.34
AustralianSuper, however, provided assurance that their products cover clients even if they have changed jobs:
Chair: From AustralianSuper's point of view in terms of its insurance products, do you have occupational exclusions? If someone had your insurance cover and changed jobs, would they lose that cover?
Mr Silk: We don't have occupational exclusions.35

Stock of multiple accounts

Submissions from ISA, AustralianSuper and the ACTU argued that the reforms do not address the existing stock of multiple accounts.36 The ACTU commented:
The major policy goal is to remove the incidence of unintended multiple accounts, however by simply drawing a line under everyone's primary account, those who are unaware and have existing multiple accounts will still have unintended multiple accounts.37
In addition, AustralianSuper made two claims about the potential consequences of these changes. First, 'it will take considerable time for the proposed changes to have the effect of reducing the number of multiple accounts'.38 Second, '[t]hese workers will continue to pay the multiple fees and charges the measure is designed to address'.39
APRA, however, supports efforts to reduce unintended multiple accounts in superannuation:
[And] through its supervisory work, APRA will focus on the operational implementation of this measure by trustees, including the potential implications for fund sustainability and adverse impacts on member outcomes.40

Industrial related issues

Stapling separates superannuation from the industrial system and gives rise to a potential conflict of laws

Firstly, Mercer argued that there are advantages to employer-supported superannuation as 'larger employers can use their scale to secure better arrangements for their employees' and an opportunity to highlight these benefits must remain.41
Shop, Distributive & Allied Employees' Association (SDA) noted that the bill separates superannuation from the industrial system which it considered should be avoided on the basis that:
Workers should be permitted to collectively bargain and have their awards and enterprise agreements outline the conditions for their workplace rights including superannuation and its accompanying insurance.42
The ACTU claimed that the policy is different to the Your Super Your Choice legislation that allowed workers to bargain for a single fund in an agreement until 1 January 2021.43
The Australian Institute of Superannuation Trustees (AIST)44 and the Law Council of Australia (LCA) claimed a potential conflict of laws between the stapling rules and industrial agreements:
The Committee notes that, under the Bill, from 1 July 2021 any contributions which an employer makes to the fund named in its enterprise agreements will not reduce its super guarantee shortfall (unless that fund is the member's chosen fund or stapled fund or if they have none). This puts employers in an uncomfortable position where their obligations under enterprise agreements conflict with what is required to comply with the stapling requirements.45

Provisions of Schedule 1

Definition of stapled funds

The LCA noted that it is unclear what the definition of stapled fund will be due to it being left to regulations which are yet to be circulated.46
Further, the AIST recommended that the following elements be included in the definition of a stapled fund:
it is open to new members;
it is subject to annual performance testing; and
[o]ffers insurance that is suited to occupation of the member, for example those in hazardous occupations.47


Submitters pointed out that stapling could require new processes for employers who would be required to look up workers' stapled fund if a new employee does not notify them of their chosen fund.48
ACTU argued that:
It is likely employers will find this legislation difficult to comply with. Large employers with significant hiring rates or greenfields employers will be required to do significantly more administration in order to find workers' existing superannuation funds.49
The Association of Superannuation Funds Australia (ASFA) commented:
It's estimated that between 20 000 and 30 000 people commence a new job every week. This will place an enormous burden, we feel, under a very short period of time, on employers, who will need to be aware and able to action their SG [super guarantee] obligations of these new employees, so I think there is a real question there—particularly at the point in time when we're trying to stimulate the economy, in particular small and medium employers—that we don't unduly stifle their ability to bring on new employees.50
HESTA also noted this administration burden arises 'regardless of the size of business given that small business employers may have limited administrative support and big employers can have large volumes of new starters on a regular basis'.51 CPA and CA pointed out that the majority of small business do not go through a payroll provider.52
As an aside, AustralianSuper stated:
In addition, there is no way for an employer to discern if the fund they are identifying on behalf of their employee is a high performing fund or an underperforming fund, or indeed an underperforming fund that may be closed to new members.53
In addition, HESTA suggested it would be time well spent to wait and develop an automated solution, '[t]he resources required and the risk of an initial manual system for employers is far greater than any benefits likely to occur from stapling during this time' and that its employers are under financial stress from COVID-19. 54
Despite concerns about an administrative burden, in her evidence to the committee, Ms Larissa Evans from the Australian Taxation Office stated, in regards to the Phase 1 manual system:
We've made an assessment, on an employee-by-employee basis, that, if you had all the information that you needed to successfully submit a request and get a response, it would take something in the space of minutes to complete that, per employee.55


The Inspector-General of Taxation (IGTO) noted that the process for employees identifying their stapled fund is 'not clear' and would like an 'easy and accessible' system introduced.56 The IGTO suggested this system could be 'in the regulations, legislative instrument or other tax administrative process' and may require the:
Tax Commissioner to notify an employee when they respond to a request from their employer; or
up to date information on the employee's MyGov account.57


CPA and CA identified a situation where no penalties should be issued:
Employers must face no penalty for administrative failures made by the Australian Taxation Office (ATO) if the employer acts in good faith when making superannuation contributions under the choice of fund rules.58

Queries on Schedule 1

The following queries were raised about Schedule 1 in submissions:
What if the ATO does not or cannot execute a request for details of stapled fund;59
'There is no provision in the Bill to allow such a member to have their contributions paid to the employer's default fund in circumstances where the employer's default fund is a defined benefit fund';60 and
If the ATO changes a notification, will the employer be in breach? This may have implications for the continuity or commencement of their insurance.61

Alternative model to stapling

A number of submitters—Australian Services Union, ACTU, HESTA and ISA—suggested an alternative model to stapling such as automatic rollover whereby superannuation is stapled to the member rather than the fund. 62

Education campaign

The FSC and National Foundation for Australian Women (NFAW) suggested that the single default account be accompanied by an education campaign for employers and workers, respectively.63 The NFAW commented:
The legislation should be accompanied by an education campaign with appropriate decision making tools should be made available to people changing their job to encourage people to review their superannuation options when they make a career change, as well as at other significant life events including turning 25, marriage and becoming a parent.64

Final point on single default accounts

Out-dated data

SDA stated, '[p]ursuing more reforms without preparing new data on the impact of reforms to date would not demonstrate responsible government'.65

Views relating to Schedule 2 of the bill—Annual performance test

Submitters largely expressed support for the principle of performance testing funds and removing underperformers but there were varying views on how Schedule 2 of the bill should apply the annual performance test.
APRA noted:
…the Performance Test leverages the work done by the Productivity Commission, and by APRA in developing the MySuper Product Heatmap. It establishes a clear benchmark for trustees to achieve and, importantly, introduces significant consequences for trustees with products that fail to meet this benchmark.
More than 10 million member accounts have already seen the benefits of transparent measurement of historical performance, fees and costs, with a number of funds merging or exiting the industry and over $400 million saved in fees across these accounts since APRA's MySuper Product Heatmap was first published in December 2019.
The Performance Test will further accelerate the work APRA has done to ensure trustees improve member outcomes in underperforming MySuper products, and to address underperforming funds more broadly. Work is underway to incorporate the new Performance Test into APRA's existing approach for dealing with underperforming products and funds.66
MBL, Mercer, Australian Investment Council, FSC and SCA are supportive of APRA conducting an annual performance test for superannuation products.67 SCA stated it:
…strongly supports an objective, annual performance test for all APRA regulated super funds, consistent with Recommendation 4 of the Productivity Commission's inquiry into superannuation.68
Whereas Rainmaker Group, ISA and Retail Employees Superannuation Trust (REST) are more generally in favour of addressing underperformance.69 REST explained it:
supports the objective of ensuring that only high-performing funds are permitted to manage superannuation for Australians. We agree with the intent of the proposals to establish expectations for superannuation fund performance, and consequences for funds that persistently do not meet them.70
ISA stated it '…supports the broad policy intention of the measures to address underperformance in superannuation'.71
To put it another way, AustralianSuper is '…support[ive of] measures that ensure only high performing funds receive Australians' superannuation contributions'.72
It should be noted that a number of submitters in support of the annual performance test, also suggested improvements to the test as outlined below.
Other submitters expressed their dissatisfaction with the annual performance test. Some submitters are of the view that the annual performance test contains flaws.73 Dr Donald argued that there were a number of shortcomings with the test which are to do with: past performance is no guide to future performance; matters are members outcomes; and changes to the superannuation system are likely to have broader economic implications.74 The ACTU suggested the benchmarks ought to be abandoned.75

Issues for super fund members

Remaining in an underperforming super fund

Submitters also raised a potential risk of being in an underperforming super fund despite the annual performance test and the requirements for underperforming funds to notify their members.
Dr Donald described a possible scenario for super fund members that remain in an underperforming fund:
What concerns me greatly is that the larger group of people, unfortunately, would simply file the notice from the trustee in the round filing cabinet—not ever read it, not be aware of it and not be aware of what's going on—while two things happen to them. One is they could get left in a fund that's crippled by, as you've suggested, underperformance and chronic underperformance…76
Several submitters are therefore concerned that closing underperforming funds to new members will make the outcome worse for members that remain in the fund.77

Test could negatively impact performance of underperforming super funds

The ACTU claimed that the annual performance test would drive super funds to 'mediocrity in performance'78 and explained:
This package, taken together, will mean an underperforming for-profit fund would be easier to run and have a competitive advantage to a highly performing industry super fund.79
Similarly, the NFAW highlighted the potential for a failed test to be a self-fulfilling prophecy, as 'failure to meet benchmarks in one year could become…the fund continuing to perform badly until it fails'.80

Potential costs to members if funds invest differently

The Conexus Institute argued that there could be opportunity costs of the annual performance test:
We estimate that, should funds prioritise passing the performance test, consumers will incur an opportunity cost of $3.3 billion per annum. This far exceeds the benefit of the YFYS performance test (forecast in the Budget to be $10.7 billion over 10 years). Indeed, the opportunity cost is larger than the forecast benefits of the entire YFYS reform package ($17.9 billion over 10 years).81

Issues for super funds

Reliability of test results

REST and JANA stated that the test could potentially misidentify a good fund as poor performing resulting in it failing the test and a poor fund as well performing.82
In its submission, the Conexus Institute explained that differentiating between good and poor funds will prove statistically ineffective over time, assessing the test as very weak:83
Table 2.1:  Assessed statistical effectiveness of the Your Future Your Super performance metric
Effectiveness: likelihood of failing to identify a 'poor' fund as 'poor'
42 per cent – 65 per cent
Mistakes: likelihood of identifying a 'good' fund as 'poor'
35 per cent
Source: Conexus, Submission 12, p. 10.
Whereas, in his evidence to the committee Mr O'Halloran stated that SCA is not concerned about inaccurate passing and failing of the test because the 'test is identifying underperforming funds':
…we've graphed out some of the funds that would likely fail the proposed test versus those that are at the lower end, in terms of net investment returns, and there's a high level of correlation of the 20 funds that we identified that may fail. Sixteen of them are at the lowest end and those four that aren't in the lowest quarter of funds are only just above it, so there's really no concern there for us.84
Mr O'Halloran also referred to the following research in SCA's submission:
Super Consumers Australia's recent analysis of the MySuper December 2020 heatmaps determined there were 73 MySuper products with six year return information available. Of these 73 products, 20 are likely to fail the proposed underperformance test. Of these 20 products, 16 are in the bottom quartile of net returns overall. This shows the test is likely to pick up a large portion of products that also have low returns.85

Investment strategies—impact on the economy

Submitters shared concerns about how the annual performance test will impact time span of super fund's investment strategies.
REST and the Investor Group for Climate change believed that the test encourages super fund to focus on short term horizons.86
Further, the ASFA argued that the test 'will drive investment decision making that will be contrary to the objective of delivering good member outcomes over the medium to long term' and 'will drive trustees to make investment decisions effectively to hug the index'.87
In addition, HESTA noted that there may be wider economic implications from the test.88
Likewise, McKell argued that this could result in investment strategies 'index hugging':
The proposed performance benchmark will make it less viable for funds to adopt the strategy of steering clear of an asset bubble as it's forming, unless they are convinced it will burst or dissipate before the current performance period ends. Whilst they risk falling foul of the benchmark and triggering an exodus of members, the only rational strategies will be either to pile on the bubble, aiming to pull out just before it bursts, or to hug the index through good and bad. 89


It was also argued by some submitters that the annual performance test may encourage risk taking.
IFM Investors outlined that the test incentivises trustees to focus on the management of risk and returns.90
In his submission, Dr Donald claimed that there is no ability to reset the timer which creates a 'positive incentive for funds to expose the portfolio to considerably more risk in an attempt to recoup the underperformance'.91 Although Dr Donald noted that whilst a fund can be reorganised in one year, you cannot be confident that the fund is producing better performance and that will remain.92
QSuper suggested that the asset class benchmarks and indices will be constraining and may lead to well performing super funds adopting a least risk strategy and an opportunity cost to members.93
APRA noted in evidence:
...our view is that assessment of performance against benchmarks, in and of itself, should not necessarily lead to a change in investment strategy or investment behaviour. The comparison, in particular, in the performance test that the government is proposing is to a relatively simple listed asset benchmark, and the argument for active investment and investment in a wider class of assets is usually that the cost-benefit of that, in terms of returns to members, is positive; therefore, that remains the case, so a well formulated investment strategy, implemented effectively, should still be able to outperform a simple, listed, passive investment strategy. So we do not see that there would necessarily be a need for funds to alter their investment in infrastructure or other investments as a result of this measure.94

Gaming the system

Some submitters also raised concerns that the annual performance may be gamed.
The AIST suggested possible scenarios of gaming the test:
Providers may open loss-leading products that are then closed as underperforming products, with existing members stapled to them – new products without a performance history can then be opened.
Providers could 'hide' fees because administration fees are excluded from the performance assessment, this will be particularly detrimental to members with lower balances.
Choice products are not included in the legislation (are meant to be included from 1 July 2022), so can continue to underperform MySuper products without repercussions.
CPA and CA also noted their concern about the system being gamed, referring to two activities that could extend from the bill:
trustees may be willing to take on more investment risk in order to recover from poor investment periods and/or adjust their portfolios into more acceptable assessment benchmarks.95
In addition, Dr Donald suggested that phoenixing strategies—'new products are introduced to replace products approaching the 8-year measurement point'—and fund mergers could be used to game the test.96

Provisions of Schedule 2


MBL questioned why the annual performance test is restricted to MySuper products in the first instance.97
A number of submitters suggested that the annual performance test apply to all superannuation products including APRA regulated products.98
Rainmaker Group specifically noted that attention should turn to underperformance of investment choice options.99 Further, McKell suggested that the requirement to notify members of underperformance encompasses all members of superannuation funds, including Choice and SMSF members.100
JANA stated it was 'cautious' about the application of the annual performance test to Trustee-Directed products 'where there is no detail provided as to how performance tests would apply to this category of products (if at all)'.101
APRA, however, explained the staged approach was required because of the available data:
The Performance Test is proposed to apply for MySuper products from 1 July 2021 and be extended to apply to Trustee Directed Products from 1 July 2022. This staged approach for application of the Performance Test aligns with the timeframe for which the necessary data on choice products will be reported to APRA, and will assist industry and APRA to manage the work needed to implement the reforms. APRA is currently expanding and enhancing the data it collects from superannuation trustees through the multi-year Super Data Transformation project. Trustees will report this new data to APRA for the first time in September 2021, including data necessary to assess the performance of products beyond MySuper.102

Annual performance test

Number of metrics

Firstly, SCA pointed out that '[t]he performance test methodology should not be fundamentally altered…'.103
A number of submitters were of the view that a single test is too simplistic and suggested multiple metrics.104 AIST suggested that 'a suite of metrics be considered, rather than a single point in time measure'.105
QSuper argued for a:
…broadening of the range of benchmarks (and the way benchmarks are constructed) for each asset class to better align with a fund's objectives for that allocation.106
Similarly, HESTA and the Ai Group would like a more 'comprehensive' test.107

What is included in the annual performance test

A number of submitters also commented on matters that were likely to be included in the regulations that will support this bill.
The Ai Group, for example, stated that net investment returns—measure included in the test—does not include all costs and charges.108
Various suggestions were put forward for what the test should include and the following appeared in a number of submissions.
Firstly, it was suggested by four submitters that a net return benchmark be included.109
Secondly, submitters and witnesses overwhelmingly called for administration fees to be included in the test.110 The Ai Group outlined the following issues with excluding administration expenses from the measure:
the risk that less attention will be paid to removing inefficient administrative practices;
the risk that costs are artificially shifted from an investment expense to the administrative expense category; and,
most importantly, the risk that underperformance is incorrectly identified or incorrectly overlooked.111
Thirdly, it was raised by several witnesses during the public hearings that the test should take into account risk, highlighting the point also made by submitters.112 Dr David Bell of The Conexus Institute explained:
We also consider that it's very important that the performance test reflects the amount of risk taken to achieve that level of return. Risk adjusted returns are very important to consider as well. It's important that performance measures not be risk agnostic, and unfortunately this one is. It just normalises exposures and doesn't consider how much risk is being taken to achieve that performance…113
In her evidence to the committee, Ms Emily Barlow of Mercer argued for including risk in the annual performance test:
Also, you can allow for a risk adjustment. In a lot of cases, particularly where you invest in alternatives and unlisted asset classes, the risk will be lower than the proposed benchmark, which is effectively just equity and fixed income in different proportions. Then you get the risk adjustment by having the second element. That will help funds to make risk decisions for their members—taking risk off the table where it makes sense, perhaps later in life as you approach retirement or if market volatility picks up—whereas, as the test is outlined, it would make more sense for funds to just stick to the benchmarks, because they're never going to be able to time the 'up', and that shouldn't be a bad thing. Members are inevitably risk-averse, so the decision to take risk off the table should be encouraged.114
It was raised in submissions and at the hearing that the annual performance test does not apply appropriately to lifecycle products.115 QSuper stated that:
They are fundamentally different constructs and therefore, measurement must have regard to the changing investment strategy at different lifestages.
The Bill currently does not appear to recognise the challenges in appropriately comparing lifecycle funds—neither its component parts (or individual cohorts) nor how the total lifecycle approach will be collapsed into a single measure.116
Finally, submitters raised concerns about using a listed index for unlisted assets and measuring infrastructure.117 Dr Katrina Ellis of APRA advised the following:
Measuring infrastructure investment performance is quite complicated because there's quite a diverse range of investments, and, when we issued our heat map, we used a listed index because we couldn't find an appropriate unlisted index that was broadly used in industry and agreed upon in industry. It's notoriously difficult. It's just an area where there aren't very well developed benchmarks. They all have tilts to different geographies. If they're international, they might focus on American or focus on European. They might focus on particular types of infrastructure and so might not be a great measure for other types of infrastructure. So it is a difficult area to measure. But I think, as Mrs Rowell said, infrastructure investments have an illiquidity premium in them, and so they would typically do better compared against a listed index, just on the face of things.118


In its submission to the committee, APRA provided the following information about the Heatmaps119:
APRA is also currently developing its methodology for extending its Heatmaps.
APRA expects to release an Insights paper outlining its approach in the coming months, ahead of release of an initial choice heatmap for a sub-set of products later in 2021. 120
Further to this at the public hearing, Mrs Helen Rowell of APRA stated:
One of the benchmarks in our heatmap is very similar to the benchmark that's been used in the government's performance test, and, as I said, it hasn't led to any significant shift, to date, in investment strategy or behaviour by funds, and we don't expect the performance test to lead to a change, either. In and of itself, that performance test should not drive a change in investment strategy and behaviour.121

Notifying members of failed assessment

Mercer and the FSC argued that sending a letter by post is unnecessary and incurs additional costs.122
Some submitters noted the subsequent actions that may result from members being notified that they are in a super fund that failed the test. Mercer claimed there was potential for there to be a run on the fund with 'more engaged members leaving the disengaged members to bear the consequences of the failure'.123 Dr Donald also made a similar point arguing that disengaged members may be exposed 'to the risk of realising illiquid assets under fire-sale conditions', financial advisers may target members of underperforming funds and raise issues of system stability.124
In addition, CPA and CA said that notification after a single year is inconsistent with 'past performance is not a reliable indicator of future performance'.125
APRA noted that the Bill does include new powers to address these risks:
Included in this measure is an explicit prudential standard making power in relation to resolution (i.e. to assist, for example, with the orderly wind-up of an entity that is no longer viable). This aligns with other APRA-regulated industries and ensures that APRA has sufficient powers to require trustees to prepare recovery plans and support APRA resolution planning in relation to superannuation funds, the trustee itself and connected entities. This new measure is a necessary power to address concerns that members could languish in a closed product that has persistent underperformance.126

Merging performance

Two submitters commented on merging funds. In his evidence to the committee, Dr Bell provided the following comments:
However, it's interesting to see the incentives for strongly performing funds in their decision-making process. The question is: what is the incentive for them to merge with underperforming funds when (a) they potentially inherit some poorly performing assets, such as unlisted, underperforming assets, (b) it takes up a lot of time, and they're distracted from focusing on their own performance, and (c) they may be, in inheriting a member flow profile, merging with a fund that's in negative outflows? Having positive inflow to your fund is something I generally regard as a positive attribute for managing successfully. Managing funds in outflow is a harder issue to manage. So we think there's a risk—going directly to your question—that this will create a scenario of, potentially, zombie funds, meaning there is a fund that's just unattractive to be merged with and it just continues on. It potentially can't take in new members or accept new flows, because it's failed the performance test. Where does that type of fund go?127
The FSC suggested:
To send a clear signal to trustees that consolidating with a poor performing product will not affect investment performance, the legislation should specifically exclude such cases for the purposes of the proposed section 60F.128

Regulator discretion

A number of submitters recommended that the regulator APRA has adequate discretion.129 The AIST stated why this should be the case:
APRA's discretion should be sufficiently broad to encompass unexpected market circumstances (such as those associated with a global pandemic) and a prudent response to them. Its discretion should also allow consideration of remedial action taken by a fund to address investment issues in circumstances where such action has demonstrably improved investment outcomes.130
In addition, some submitters suggested that APRA's determination be a reviewable decision.131 CPA and CA explained why it thinks the test should be reviewable:
…even with full transparency, this leaves no recourse by trustees in the event that APRA is acting on incorrect information or has processed information inaccurately, as once an incorrect determination is issued by APRA, it will be allowed to stand permanently and trustees have no right of redress.132

Queries on Schedule 2

CPA and CA made the following queries about Schedule 2 in submissions:
How does the bill treat changes to a member's dependents?;133 and
'The need to resolve considerations of whom relevant beneficiaries are, and how complex products such as 'glidepaths'134 are treated in the event of two subsequent failure notices'.135

Additional suggestions for Schedule 2

Submissions provided a number of suggestions for Schedule 2 which are listed below:
Two year trial run of the annual performance test without consequences136
A second test for funds that fail:
Balanced scorecard assessment—ASFA recommended 'Should a product not meet the legislative performance benchmark test, the second stage would be a 'balanced scorecard' assessment, whereby APRA would evaluate whether the product is delivering appropriate member outcomes and whether the investment 'underperformance' is likely to be rectified'.137
Type 1 error—Mercer suggested 'A second test should be introduced which takes into account the risk (or volatility) of the actual investment portfolio and therefore uses both net investment return and risk in the actual performance test'.138
Where a fund has failed:
Action plan—Mercer recommended that trustees implement an action plan after failing once and if unable to meet within two years, there would be a compulsory Successor Fund transfer.139
Test to re-enter—FSC suggested a second test to re-enter the market to show 'their performance is improving on a risk-adjusted basis'.140
Review mechanisms:
Aware Super suggested periodic reviews of the investment benchmarks and methodology.141
Panel of experts—QSuper thought there may be value for a 'panel of experts made up of domestic and international members to provide an expert, qualitative assessment of underperforming funds to determine their ability to continue to receive contributions.'142

Annual performance assessment period

Some submitters argued for a 10 year assessment period.143 HESTA considered 10 years to be more reflective of market cycles.144
Dr Donald is of the view that eight years is based on pragmatism, not econometric sensibility and making investment decisions is not stationary.145
In response to the assessment period, APRA commented:
Eight years is actually all the data that we have for MySuper. It was introduced in 2013. We can't measure anything longer. So that's about the time frames.146
Having said that, eight years is a not-unreasonable time frame to be assessing investment performance and allowing for market cycles.147
Further, Mr Alex Maevsky from Treasury stated:
The performance test operates over eight years. This time frame for analysis was recommended by the Productivity Commission, as a result of its three-year review of the superannuation system. That particular methodology adopted by the Productivity Commission was subject to quite extensive consultation with stakeholders. We're informed by that consultation.148


JANA argued that the consequences of failing the test should be proportionate to degree of underperformance.149
The AIST is of the view that the regulator should have discretion over the underperformance notification penalty where failure to notify is caused by something beyond the trustee's reasonable control (e.g. natural disaster).150
In its submission, ACTU claimed that the consequences for underperformance are not helpful to disengaged members—that is sending a letter in the first instance and closing the product to new members in the second consecutive instance.151
Cbus recommended that the consequence of failing the test be strengthened.152

Retrospective application of the annual performance test

Some submitters were of the view that the test is retrospective.153
Dr Donald commented:
Retrospectivity in the law is a very dangerous matter. At best it is unfair. Parties subject to regulation deserve to know the standards by which they will be judged so that they can govern their behaviour accordingly.154
AMP claimed that this approach is 'unreasonable and likely to result in poor member outcomes'.155

Views relating to Schedule 2 of the bill—YourSuper comparison tool

A quarter of submitters commented on the YourSuper comparison tool (the tool). MBL 'strongly endorses' the tool.156
AIST suggested exercising caution, 'policy makers [need] to be realistic about the extent to which consumer disclosure will drive members to better funds. Last year, the Australian Securities and Investments Commission [ASIC] stunned many in the financial industry by "calling time" on disclosure'.157
Mercer argued that the tool needs to be developed with the consumer in mind and listed a number of shortcomings as 'all consumers are not concerned with the same metrics'.158
In addition, the ACTU noted that '[w]ebsites already exist. But their existence does not, in and of itself, prevent people from joining poor performing products offered by funds'.159
The following suggestions on the design of the tool were made by more than one submitter, that the tool should:
be easy to navigate in terms of the format being accessible and having clear explanations;160
cover every superannuation product including at the same time;161 and
include alternatives to the fees, for example investment returns and all fees.162
The following points were made by individual submitters, the tool should:
be contained in an appropriate legislative framework;163
rank relevant products based on 3-4 personal answers such as age, total balance, desire for insurance and willingness to accept variation in their future investment return;164 and
have the same metrics as those used to assess performance.165
In terms of the development of the tool, Ms Evans advised:
The design of the comparison tool is well progressed and we have commenced a build around it, given that we are targeting the proposed policy start date of 1 July 2021. Obviously, with there still being legislation outstanding, we've built some contingency into that design and build. We needed to progress that to be in a position to deliver on 1 July 2021.166

Views on Schedule 3—Best financial interests duty

APRA in its submission outlined the importance of this change, noting that:
The changes introduced to the best interests duty reflect the importance of having members' financial interests at the forefront of decision making by trustees. The reversal of the evidentiary burden of proof (which is part of the BFID measure) will also further focus trustees' minds on the evidence they must have and the records they must keep to show they have acted in the best financial interests of members at all times.167
However, Schedule 3 was opposed by a number of submitters. For example, CPA and CA stated they did not support the schedule,168 and other submitters called for the schedule to be abandoned.169
MBL succinctly stated its view to the committee, claiming that '[i]t is difficult not to perceive Schedule 3 of the anything other than an ideological attack on superannuation'.170 Further, it submitted that the bill should not restrict parliamentary scrutiny, noting that such scrutiny 'has led to the removal of some significant unintended consequences from superannuation related legislation in the past'.171
In its submission, ISA considered the drafting of the best financial interest measures as a missed opportunity.172

Best financial interests duty (BFID)

Australian Institute of Company Directors (AICD) 'supports strong accountability measures and robustly enforced duties for superannuation trustees' however along with the LCA and IFM Investors do not support the BFID.173
In evidence, Mr Ian Silk from AustralianSuper noted:
…[they do] not see a difference between the concept of acting in members' best interests and acting in members' best financial interests. We already act in this way and we intend to continue to do so. Our submission sets out in some detail our concerns with these provisions, which go to the ostensibly ancillary elements of the proposal, and our recommendation for amendments.174
The following issues were raised regarding the BFID.

Already required to act in members best financial interests

Many submitters were of the view that trustees are already required to act in their members' best financial interests175 and, hence, thought that no specific duty is needed.176
For example, in its submission, the Australian Council of Superannuation Investors (ACSI) stated 'we are of the view that the proposed change of the trustee duty to 'best financial interests' merely acknowledges a long-established position'.177 Further to this, MBL explained, '[w]e believe that one is an essential subset of the other'.178
The Australian Institute of Company Directors referred to a recent consideration of the duty by Justice Jagot of the Federal Court in APRA v Kelaher [2019] FCA 1521 (IOOF Case), with all parties and the Justice accepting 'the best interests of the beneficiaries are normally their best financial interests'.179
In his submission to the inquiry, Dr Donald raised concerns that the duty would have limited effect stating that '[o]n balance, however, it does not seem to me that the proposed amendment of section 52(2)(c) would of itself cause trustees to conduct themselves differently'.180
However, Mr Blake Briggs noted the ambiguity of the existing duty:
The point I would make, though, is that there is some ambiguity around the operation of the best-interest duty. We went out and sought legal advice because we didn't want to just make statements about something. We actually sought third-party advice to inform our statement, and the advice we got was—and I think we included this in our submission—that the introduction of the words 'financial interests' doesn't meaningfully change the operation of that provision, so trustees should already be compliant with the intent of the law.181

Fails to clarify duty

Ai Group and Responsible Investment Association Australia (RIAA) are of the view that the BFID fails to clarify what it means to act in member's best (financial) interests.182
Additionally, the LCA highlighted that 'many benefits of the general law which currently inform that covenant will be lost and in fact create further uncertainty'.183

May introduce a lower standard

CPA and CA are concerned that adding the word financial will introduce a lower standard than the current best interests duty obligations for trustees because:
The proposed duty, to replace the existing duty to act in the best interests of members, is not a higher hurdle, but rather, a subset of the existing members' best interests duty.184

Justifying everything as financial

Several submitters were concerned about having to justify everything as financial and this is also discussed below in relation to the reversal of the burden of proof.185
IOOF and the LCA made the point that not every decision is directly quantifiable in a financial sense.186 For example, biscuits and office cleaning.187
Some submitters would like to ensure that long-term investment decisions are not in conflict with the duty,188 e.g. death benefits.189
However, as the Explanatory Memorandum (EM) notes:
The purpose of this amendment is to clarify that the financial interests (and not non-financial interests) of beneficiaries must be the determinative factor for trustees to comply with their obligations. In addition to the retirement benefits that superannuation provides members, the financial interests of members may include insured benefits (including death benefits or total and permanent disability coverage) provided in accordance with a properly formulated insurance strategy and other legal, regulatory and professional obligations. Subject to the trustees complying with the sole purpose test, this does not preclude trustees undertaking actions that also yield non-financial benefits to the beneficiaries, but the action cannot compromise the best financial interests of the beneficiaries. How any action will yield financial benefits to the beneficiaries of the superannuation entity must be the determinative consideration for any trustee.190

Elements of members' best interests may be lost

Submitters argued that elements that make up members' best interests could be lost because they are not in financial interests. For example, campaigns to reduce gender inequality, implement strategies towards environmental sustainability and strategies to increase financial literacy amongst members,191 retirement education services and advice192 and ethical.193
QSuper noted that its members expect it to positively support the community—outlining its involvement in domestic violence prevention and helping indigenous communities—but is concerned that under the bill they may not be able to continue this work.194

Lack of materiality threshold

Some submitters raised the lack of materiality threshold195 and requested that the same be included.196
Mr Ian Silk of AustralianSuper explained the importance of there being a materiality threshold through the following example:
Say a fund representative was called before this committee to justify why they bought biscuits to be placed in the staff tearoom. You might say, 'That's ridiculous!' Well, it's only ridiculous because there's no materiality test applied here.197
QSuper outlined what a materiality threshold might look like, 'require trustees to consider materiality as part of their decision framework and requiring trustees to justify the degree of due diligence applied to a decision based on materiality'.198
The LCA suggested the materiality threshold to permit qualitative analysis—compared to quantitative analysis—being relied upon.199
Mr David Haynes outlined his discussion with APRA which provided some insight into developments:
…we are having discussions at the moment with APRA about expenditure reporting by funds. APRA themselves are in the process of providing worked examples of how different types of expenditure might be effectively grouped, because they realise that linking the purchase of a $4 cup of coffee to the financial interests of a member might be difficult, and, even if it is possible, it's not really that relevant to showing that the overall operations of the fund and the key operations of the fund are focused on the financial interests of a member.200

Sector neutrality

Some submitters claimed that the best financial interest measures are not sector neutral201 and do not capture for-profit retail superannuation funds.202
HESTA and the ACTU highlighted that dividend payments to shareholders are not required to pass the BFID.203 In its submission, AustralianSuper considered this exclusion as 'inconsistent with the policy intent of the measure or members' best financial interests in any sense'.204
MBL commented:
The Royal Commission was scathing in its assessment of the degree to which retail superannuation funds satisfy member best interest duties – yet the Bill's response to this is to attack industry super funds – the part of the sector that is working well.205
APRA, however, noted:
Mrs Rowell: I'm not sure I would say we have concerns about payment of dividends.
Senator SHELDON: So, if it's not in the best interests of the members, you don't have a concern about payment of dividends?
Mrs Rowell: We would need to assess the basis on which the dividend payments were being made. If you think about a trustee, its obligation in delivering outcomes for members is to look at returns less costs. Dividends, in essence, form part of the costs. If the structuring of the arrangements with the parent and the dividends that are paid out of the fees that are charged to members are reasonable then we would not have a concern with that.206


Professor Thomas Clarke is of the view that using BFID to limit marketing and advertising is 'unduly restrictive'.207
The Conexus Institute considered it unlikely that the BFID will protect against an increase in marketing due to stapling.208

Prescribing additional requirements to the BFID

In its submission, the ACSI outlined the following concerns with prescribing additional requirements to the BFID:209
Again, this provision is vaguely expressed and will create uncertainty for trustees in terms of what additional requirements might be enacted in the future. The power to prescribe 'additional requirements' is so broad that the Government could potentially restrict or control any areas of a trustee's activities and decisions. It is difficult see any justification for such a sweeping power, which has the potential to undermine the fundamental role of trustees to determine the best financial interests of their beneficiaries. 210
The ACSI and Market Forces recommended removing the provisions prescribing additional requirements to the BFID. 211

Third party payments

A couple of submitters expressed that they were against212 or concerned about the BFID extending to third party payments.213
The AICD regarded it as adding 'unnecessary confusion'.214
The IOOF considered the extension to third party payments to be unworkable:
This is arguably unworkable, as trustees enter contracts with third parties for a range of services, for the benefit of the super fund, that may or may not be attributable directly to the members' financial interests.215


Some submitters made suggestions for how to improve the extension of the BFID to third party payments under the bill.
In its submission, the RIAA explained that it would be helpful to have a 'register/list of activities deemed to not be in the best financial interests of beneficiaries be codified in the law such that trustees have a clear an reliable basis on which to perform their revised expected duties' in addition to the examples included in the EM.216
The AIST would like the bill to 'make clear that all distributions made to a related third party be captured under the best financial interest covenant, including dividends and profit distributions made to parent companies'.217

Prohibition on certain payments and investments

Several submitters are against218 or uneasy219 about prohibiting certain payments and investments.
ISA highlighted that payments and investments that could be prohibited may in fact be in the best financial interests of members.220

No precedent and an overreach

MBL was unable to identify an example of a law that overrides corporate investment decisions.221
Submitters described the prohibition as an overreach: 'intrusive;222 'egregious power';223 'grants the Minister the supreme authority';224 'unnecessary government intervention';225 and 'unconscionable in a democracy'226.


Submitters are concerned about the uncertainty this provision will create.227 MBL explained:
This means that the government can unilaterally decide what is and what is not an appropriate investment strategy for a superannuation fund. Given that once again this is written into regulations, the government may decide at a whim what they decide to be appropriate and inappropriate investment decisions.228
The ACTU noted the investment risk that subsequent investments could be deemed illegal.229 QSuper outlined:
Superannuation funds must continue to be empowered to make long-term decisions in line with the long-term nature of superannuation. Our concern is that the provision casts doubt over whether long-term decisions of trustees, and the commitment of material sums of members' monies, will stand in the future.230
ISA added and noted the impact on super fund members:
For example, if a trustee makes an investment that is subsequently prohibited, any losses associated with selling that investment will be borne by members. Funds may therefore be more likely to invest in highly liquid short-term investments – forgoing long-term investment strategies.231
IFM Investors—investor of capital on behalf of superannuation funds and their members—outlined how uncertainty could impact the actions of investment managers:
The changes could also put investment managers serving superannuation funds at a disadvantage in relation to competitors for infrastructure or other assets.232

Political advertising

A number of submitters are concerned about how the prohibition on certain payments and investments will impact political advertising.
Some submitters referred to extracts on prohibiting certain payments and investments in the context of political advertising by Commissioner Hayne in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The ASFA included:
I do not favour the adoption of a rule of that kind. Even if a rule of that kind could be made (and I do not stay to examine how the implied freedom of political communication might apply) it is not a rule that I consider should be made.233
The AICD noted:
I consider that the existing rules, especially the best interests covenant and the sole purpose test, set the necessary standards. Those standards should be applied according to their terms and without more specific elaboration.234
McKell was particularly vocal on the impact this prohibition will have on political advertising. In his opening statement, Mr James Pawluk stated:
The risk I want to focus on relates directly to the question of political advertising, which I understand is a source of agitation for some proponents of the bill, who are hoping it might be used to prohibit it. I would ask senators to think forward to a world where political advertising was explicitly prohibited. In such a world, other external parties would be free to launch a campaign or lobby political parties for change that would put at risk members retirement savings, and the custodians of those savings would be powerless to act in response in order to protect their members interests.235
In its submission, McKell also explained how the prohibition on certain payments and investments seeks to limit the implied right to freedom of communication:
There is also a concern that Bill seeks to limit Australia's implied freedom of political communication through the proposed Ministerial discretion to prohibit individual expenses or investments under Schedule 3. If a Minister were to use this power to prohibit political communications by funds, the risk to members is that their assets would become vulnerable and defenceless to campaigns and lobbying from other players seeking regulatory interventions as a vehicle for capturing shareholder value.236

Interaction with the law

Dr Donald stated that the 'list of prohibited transaction types should not be used to read down the content of the sole purpose test and general law'.237


SCA recommended that APRA and ASIC jointly exercise this power and should be analogous to ASIC's product intervention powers.238
If the prohibition on certain payments and investments is inserted, the ASFA recommended it be 'confined to the making of regulations to proscribe specified expenditure and not be extended to investments'.239

Specified record keeping

Few comments were made on specified record keeping being a strict liability offence.
CPA and CA considered that the record keeping requirements may be too broad for self-managed superannuation funds.240
The ASFA recommended that '[s]hould regulations with respect to record-keeping be made, any obligations to record evidence to support expenditure and articulate financial benefits should be with respect to material expenditure'.241

Reversal of the burden of proof

On the reversal of the burden of proof APRA commented:
The reversal of the evidentiary burden of proof (which is part of the BFID measure) will also further focus trustees' minds on the evidence they must have and the records they must keep to show they have acted in the best financial interests of members at all times.242
A number of submitters are against243 or concerned about the reversal of the burden of proof.244 The ACSI commented:
The reversal of the burden of proof appears to be founded on the assumption that trustees do not generally act in the best interests of beneficiaries. The experience of ACSI and many other industry bodies find the opposite to be true.245
MBL is of the view that it should be up to the regulating body to demonstrate how and why certain expenditure is outside their duty.246
The ASFA submitted, 'for the avoidance of doubt, the bill should amend the SIS Act to clarify that the reverse onus would not apply to actions to recover loss or damage under section 55 of the SIS Act but only to actions brought by a regulator'.247
CPA and CA supported the reversal not applying to SMSFs.248


Some submitters think the reversal cannot not be justified249 and that the reasoning to why it is needed is limited.250
The LCA raised a number of legal points in regards to the reversal:
A reversal of the burden of proof should be resisted in civil matters 'unless the case for reversal is compelling';251
There is a 'limited number of Commonwealth statutes in which there is a reversal of the burden of proof for civil matters';252
It eliminates the right of directors to claim privilege against exposure to penalties and directors already face a range of penalties for breaches in SIS Act.253
At the public hearings witnesses were asked to provide examples of other legislation that has a reversed burden of proof. The areas that were provided were child sex offences outside Australia and terrorism.254
In response to a question on notice, the LCA referred to a report published by the Institute of Public Affairs in December 2014 that identified '48 provisions across 13 Commonwealth statutes where there has been some reversal of the onus of proof'.255
The IOOF commented:
It is questionable whether the potential for harm resulting from a breach of the amended covenant would justify the reversal of the onus of proof on public policy grounds.256

Potential costs

Submitters claimed that there could be additional costs257 that will arise due to reversing the burden of proof.
The Ai Group's Dr Peter Burn stated:
I think it will tangle superannuation funds towards management in a compliance nightmare, in a reverse onus of proof. They will have to be ready to prove that each and every decision they take, each and every action they take, can be shown to be in the best financial interests of members.258
Submitters also noted the potential for additional financial cost and where it will be passed onto, with IOOF suggesting the reversal may increase costs to funds as service providers reassess risk.259 Both ISA and the ACTU claimed that the reversal comes at an additional cost to members with no demonstrated additional benefit.260

Unintended consequences

The following unintended consequences of Schedule 3 were raised in submissions:
responsible trustees may no longer be willing to risk acting in these roles;261
trustees may be overly cautious;262
former directors may have issues accessing appropriate records;263 and
may have knock on effect for class actions.264

Portfolio Holdings Disclosure

Whilst some submitters supported removing the Portfolio Holdings Disclosure exemption,265 others were against its removal.266
Rainmaker Group argued in support that 'super fund members have the right to know precisely what assets their superannuation savings are being invested into'.267
In response to questioning, Mr Ian Silk stated that AustralianSuper has disclosed its full portfolio holdings for a period of time and noted that 'it took a little while to get the mechanism in place…not an especially onerous exercise to undertake'.268
The ACTU is against the removal of the exemption and make the point that 'funds would not be able to extract more value from a buyer, making retirees poorer and disincentivising investment in Australian businesses and infrastructure assets'.269 QSuper added:
Publishing a specific value against these assets is unlikely to provide meaningful disclosure to members, but is likely to limit the ability of funds to competitively transact in those assets.270
Cbus noted:
Whilst Cbus welcomes greater disclosure to members over assets funds hold, we note that several unlisted asset types are, by nature, more sensitive to disclosure of their market value. By disclosing their market value, we would be potentially impacting the sale price of an asset and ultimately may not be in the best financial interests of fund members.271

Regulations not yet available

Many submitters felt that it was difficult for them to comment on the bill when they have not seen the regulations. Treasury indicated that the timing of the release of regulations is a matter for government but did indicate that some work had been undertaken to provide policy information to stakeholders.272 The AIST commented:
It is virtually impossible for Parliament, the industry and public policy advocates to evaluate the impact and implementation challenges of the legislation as it stands, and regulations have not been provided in for a considered analysis of these to be included in submissions to this inquiry.273
Mercer made a similar comment:
The current bill is very high level and the details of the implementation and practice needs will be set out in the regulations. There will need to be a consultation period on these regulations, and it's unfortunate that we hadn't seen the regs prior to our submission to your committee or prior to our appearance today. We will therefore urge the committee to bear in mind this lack of available detail as you consider the bill and make your recommendations.274
Mercer argued that it is essential that the draft regulations be available as soon as possible for a significant period of consultation. Without such a consultation period, it is unlikely that the committee and other stakeholders would be able to fully consider the broad implications of the bill. Mercer recommended that the regulations be released for a four-week consultation period prior to the closure of the committee's submission acceptance period.275
HESTA commented:
We also note that significant amounts of detail are being left to (as yet) unseen regulations that are purportedly scheduled for implementation and commencement on 1 July 2021. We do not believe this is consistent with good public policy development…276
Cbus recommended that:
The substance of the package of reforms must be included in the bill and subjected to full parliamentary oversight. Important superannuation policy change must not be implemented via regulations.277
McKell in discussing the staggered implementation of Schedule 2 noted that:
Our other concerns are that it [the bill] doesn't adequately capture the entire sector. It's both staged in its implementation and in one sense it's not even assured that it will eventually apply because we haven't seen the regulations. It's not uncommon for regulations to be delayed. So I think it's important that the full coverage of the sector is legislated upfront.278
Submissions and contributions by other stakeholders also reflected these views.279

Regulation Impact Statement (RIS)

Following on from the comments directly above on the regulations not yet being available, a number of stakeholders criticised the Regulation Impact Statement (RIS).
The Director of Government Affairs and Public Policy of AMP Australia, Mr Alastair Kinloch, commented that:
…it is rather hard for me to understand how you can do a regulatory impact statement when the regulations themselves, which are so fundamentally important to the operation of this bill, have yet to be released. How do you cost something when you don't know what the regulations are, you don't know what the methodology is or the benchmarking test, you don't know how the data granularity is going to be treated and so on? For all those reasons, we think that the RIS is fundamentally important to stakeholders to work out what the ramifications of this bill are for all stakeholders…280
AustralianSuper also felt the RIS to be inadequate:
For completeness, we consider the indicative compliance cost provided in the Regulatory Impact Statement to be significantly understated. Our initial assessment of compliance costs for our Fund alone means that the overall industry costs will be well in excess of the Treasury estimate, therefore an appropriate assessment and RIS need to be conducted.281
ACSI also recommended that an accurate RIS be undertaken.282
However, the EM noted that:
The Productivity Commission's report, Superannuation: Assessing Efficiency and Competitiveness, has been certified as a process and analysis equivalent to a Regulation Impact Statement for the purposes of the Government decision to implement this measure.283

Commencement of the Act

The bill's scheduled commencement date also received significant commentary with many believing it to be too soon. Dr Donald commented:
…there is a very real risk of trying to rush some of these things into place. We've seen that repeatedly over the past decade, where we've tried—for very good reasons—to take action in a decisive way. If the government does decide this is the way they want to go, I'm not suggesting that we should delay it unduly but there does need to be regard for the practicalities of administering many tens, and, in some cases, hundreds, of billions of dollars of assets. These are very complicated institutions, very sophisticated institutions, and it can be very difficult to adapt the administrative procedures and arrangements and processes in a matter of months, particularly when there is still no guidance as to what those regulations might look like.284
MBL argued:
…we do not believe the proposed start date of 1 July 2021 for the changes detailed in Schedules 1 and 3 is realistic. There has been no consultation on the regulations which will determine much of the content, we have not seen the definitions which will be used within those regulations, and we have not seen any detail as to what criteria the ATO will use in determining the appropriateness of funds. The infrastructure to implement the bill is simply not in place.285
Similar comments were made by the Alternative Investment Management Association (AIMA):
AIMA considers there is a huge risk that hastily drafted regulations will result in unintended consequences for members as trustees will make allocation decisions based on meeting short term performance measures rather than focusing on the long-term best interests of members. We urge the Government to delay the commencement so that relevant experts can be consulted to ensure that the performance test is designed to meet the objective.286
Committee view
The committee acknowledges the broad in-principle support for the policy intent of the bill while noting differing views on alternative ways to achieve the same ends.
In regards to Schedule 1—Single default accounts, the committee agrees and supports the intent of ensuring the individuals' superannuation benefits are not whittled away by having multiple underperforming funds.
The committee also notes the policy intent for Schedule 2 and the annual performance test. The committee notes the suggestions on what should be included in the assessment. The committee is fully supportive of introducing a performance test. The committee notes the concerns raised regarding the specific metrics that will be used to define underperformance and the concerns raised that funds' administration fees will not be one of the metrics included in the underperformance equation and suggests that the government reconsiders this aspect of the test.
In regards to Schedule 3, the committee acknowledges the issues raised. Many submitters noted that many funds already act in the best 'financial' interests of members'. The Committee notes the important context for this policy being Recommendation 22 of the Productivity Commission's Report from their extensive inquiry into the superannuation system, that the Government should pursue a clearer articulation of what it means for a trustee to act in members' best interests.

Recommendation 1

The committee recommends the bill be passed.
Senator Slade Brockman

  • 1
    Prime Super, Submission 18, p. [1]; IOOF, Submission 29, p. 4; Financial Services Council (FSC), Submission 32, p. 7; Super Consumers Australia (SCA), Submission 39, pp. 4–5; Australian Prudential Regulation Authority (APRA), Submission 15, p. 4.
  • 2
    APRA, Submission 15, p. 4.
  • 3
    FSC, Submission 32, p. 7.
  • 4
    Prime Super, Submission 18, p. [1].
  • 5
    SCA, Submission 39, pp. 4–5.
  • 6
    Mr Xavier O’Halloran, Director, Super Consumers Australia, Proof Committee Hansard, 7 April 2021, p. 9.
  • 7
    National Foundation for Australian Women (NFAW), Submission 1, p. 2; Australian Services Union (ASU), Submission 5, p. 1; Mercer, Submission 11, p. 3; CPA Australia and Chartered Accountants Australia and New Zealand (CPA and CA), Submission 13, p. 4.
  • 8
    CPA and CA, Submission 13, p. 4.
  • 9
    HESTA, Submission 16, p. 3; FSC, Submission 32; Mercer, Submission 11, p. 3; The Conexus Institute (Conexus), Submission 12, pp. 6 and 18.
  • 10
    HESTA, Submission 16, p. 3.
  • 11
    McKell Institute Victoria (McKell), Submission 34, p. 5.
  • 12
    Rainmaker Group (Rainmaker), Submission 4, pp. 1–2; Mercer, Submission 11; Conexus, Submission 12, p. 6; Dr Scott Donald, Submission 19, p. [3].
  • 13
    Rainmaker, Submission 4, p. 1.
  • 14
    National Tertiary Education Union, Submission 40, p. 1.
  • 15
    Dr Donald, Submission 19, p. [3].
  • 16
    Maurice Blackburn Lawyers (MBL), Submission 7, p. 5; Industry Super Australia (ISA), Submission 8, p. 20; Australian Council of Trade Unions (ACTU), Submission 9, p. 2; HESTA, Submission 16, p. 3; Cbus, Submission 26, p. 25; ASU, Submission 5, p. 1; AustralianSuper, Submission 41, p. 2.
  • 17
    AustralianSuper, Submission 41, p. 3.
  • 18
    ACTU, Submission 9, p. 6.
  • 19
    McKell, Submission 34, p. 22.
  • 20
    Mercer, Submission 11, p. 4.
  • 21
    Ai Group, Submission 35, p. 2.
  • 22
    ISA, Submission 8, p. 1.
  • 23
    Mr O'Halloran, Super Consumers Australia, Proof Committee Hansard, 7 April 2021, p. 21.
  • 24
    Mr O'Halloran, Super Consumers Australia, Proof Committee Hansard, 7 April 2021, p. 20.
  • 25
    SCA, Submission 39, p. 5.
  • 26
    Department of the Treasury, answer to question on notice, 8 April 2021 (received 15 April 2021).
  • 27
    MBL, Submission 7, p. 4; ISA, Submission 8; ACTU, Submission 9, p. 5; HESTA, Submission 16, p. 3; Cbus, Submission 26, p. 8; Mercer, Submission 11, p. 3.
  • 28
    Cbus, Submission 26, p. 14.
  • 29
    Ms Kim Shaw, Executive Director, National Head of Personal Legal Services, Principal Lawyer, Maurice Blackburn Lawyers, Proof Committee Hansard, 8 April 2021, p. 22.
  • 30
    Ms Shaw, Proof Committee Hansard, 8 April 2021, p. 22.
  • 31
    MBL, Submission 7, p. 6.
  • 32
    SCA, Submission 39, p. 10.
  • 33
    Cbus, Submission 26, p. 3.
  • 34
    Cbus, Submission 26, p. 11.
  • 35
    Proof Committee Hansard, 8 April 2021, p. 43.
  • 36
    ISA, Submission 8, p. 3; ACTU, Submission 9, p. 2; AustralianSuper, Submission 41, p. 2.
  • 37
    ACTU, Submission 9, p. 2.
  • 38
    AustralianSuper, Submission 41, p. 2.
  • 39
    AustralianSuper, Submission 41, p. 2.
  • 40
    APRA, Submission 4, p. 4.
  • 41
    Mercer, Submission 11, p. 4.
  • 42
    Shop, Distributive & Allied Employees' Association (SDA), Submission 2, p. 4.
  • 43
    ACTU, Submission 9, p. 3.
  • 44
    Australian Institute of Superannuation Trustees (AIST), Submission 28, pp. 8–9.
  • 45
    Law Council of Australia (LCA), Submission 36, p. 3.
  • 46
    LCA, Submission 36, p. 3.
  • 47
    AIST, Submission 28, p. 34.
  • 48
    AIST, Submission 28, p. 11; AustralianSuper, Submission 41, p. 3.
  • 49
    ACTU, Submission 9, p. 3.
  • 50
    Dr Martin Fahy, Chief Executive Officer, Association of Superannuation Funds of Australia (ASFA), Proof Committee Hansard, 7 April 2021, p. 12.
  • 51
    HESTA, Submission 16, p. 4.
  • 52
    Mr Richard Webb, Policy Adviser, Financial Planning and Superannuation, CPA Australia, Proof Committee Hansard, 8 April 2021, p. 20.
  • 53
    AustralianSuper, Submission 41, p. 3.
  • 54
    HESTA, Submission 16, p. 4.
  • 55
    Ms Larissa Evans, Assistant Commissioner, Fund Services and Engagement, Superannuation and Employer Obligations, Australian Taxation Office, Proof Committee Hansard, 8 April 2021, p. 20.
  • 56
    Inspector-General of Taxation (IGTO), Submission 3, p. 3.
  • 57
    IGTO, Submission 3, pp. 3–4.
  • 58
    CPA and CA, Submission 13, p. 2.
  • 59
    CPA and CA, Submission 13, p. 5.
  • 60
    LCA, Submission 36, p. 3.
  • 61
    LCA, Submission 36, p. 3.
  • 62
    ASU, Submission 5, p. [1]; ISA, Submission 8, p. 3; ACTU, Submission 9, p. 4; HESTA, Submission 16, p. 3.
  • 63
    FSC, Submission 32, p. 5; NFAW, Submission 1, pp. 3–4.
  • 64
    NFAW, Submission 1, pp. 3–4.
  • 65
    SDA, Submission 2, p. 4.
  • 66
    APRA, Submission 15, p. 2.
  • 67
    MBL, Submission 7, p. 8; Mercer, Submission 11, p. 2; Australian Investment Council, Submission 21, p. 2; FSC, Submission 32, p. 10; SCA, Submission 39, p. 10.
  • 68
    SCA, Submission 39, p. 10.
  • 69
    Rainmaker, Submission 4, p. 3; ISA, Submission 8, p. 2; Retail Employees Superannuation Trust (REST), Submission 14, p. 2.
  • 70
    REST, Submission 14, p. 2.
  • 71
    ISA, Submission 8, p. 2.
  • 72
    AustralianSuper, Submission 41, p. 4.
  • 73
    Conexus, Submission 12, p. 1; Dr Donald, Submission 19, p. 9; AMP, Submission 33, p. 9.
  • 74
    Dr Donald, Submission 19, p. [5].
  • 75
    ACTU, Submission 9, p. 9.
  • 76
    Dr Scott Donald, Proof Committee Hansard, 7 April 2021, p. 4.
  • 77
    Prime Super, Submission 18, p. 3; Cbus, Submission 26, p. 26; AIST, Submission 28, p. 21.
  • 78
    ACTU, Submission 9, p. 6.
  • 79
    ACTU, Submission 9, p. 12.
  • 80
    NFAW, Submission 1, p. 4.
  • 81
    Conexus, Submission 12, p. 12.
  • 82
    REST, Submission 14, p. 4; JANA, Submission 20, p. 3.
  • 83
    Conexus, Submission 12, p. 10.
  • 84
    Mr O'Halloran, Proof Committee Hansard, 7 April 2021, p. 21.
  • 85
    SCA, Submission 39, p. 12.
  • 86
    REST, Submission 14, p. 4; Investor Group on Climate Change, Submission 30, p. 2.
  • 87
    ASFA, Submission 27, p. 5.
  • 88
    HESTA, Submission 16, p. [0].
  • 89
    Mr James Pawluk, Executive Director, Superannuation and Universal Ownership, McKell Institute Victoria, Proof Committee Hansard, 8 April 2021, p. 1.
  • 90
    IFM Investors, Submission 24, p. [3].
  • 91
    Dr Donald, Submission 19, p. [4].
  • 92
    Dr Donald, Submission 19, pp. [5–6].
  • 93
    QSuper, Submission 25, p. 5.
  • 94
    Mrs Helen Rowell, Deputy Chair, APRA, Proof Committee Hansard, 7 April 2021, p. 59.
  • 95
    CPA and CA, Submission 13, p. 6.
  • 96
    Dr Donald, Submission 19, p. [6].
  • 97
    MBL, Submission 7, p. 8.
  • 98
    SDA, Submission 2, p. 5; AIST, Submission 28, p. 7; McKell, Submission 34, p. 5; Ai Group, Submission 35, pp. 4–5; SCA, Submission 39, p. 4.
  • 99
    Rainmaker, Submission 4, p. 3.
  • 100
    McKell, Submission 34, p. 6.
  • 101
    JANA, Submission 20, p. 2.
  • 102
    APRA, Submission 15, p. 2.
  • 103
    SCA, Submission 39, p. 14.
  • 104
    ISA, Submission 8, p. 2; REST, Submission 14, p. 5; QSuper, Submission 25, p. 5; AIST, Submission 28, p. 7; JANA, Submission 20, p. 4; IOOF, Submission 29, p. 2.
  • 105
    AIST, Submission 28, p. 7.
  • 106
    QSuper, Submission 25, p. 5.
  • 107
    HESTA, Submission 16, p. 5; AiGroup, Submission 35, pp. 4–5.
  • 108
    Ai Group, Submission 35, p. 4.
  • 109
    Rainmaker, Submission 4, p. 3; MBL, Submission 7, p. 8; Alternative Investment Management Association Australian National Group (AIMA), Submission 10, p. 2; HESTA, Submission 16, p. 5.
  • 110
    ASU, Submission 5, p. 2; ISA, Submission 8, p. 2; ACTU, Submission 9, p. 8; REST, Submission 14, pp. 3–4; ASFA, Submission 2, p. 9; AIST, Submission 28, p. 27; Aware Super, Submission 31, p. 3; McKell, Submission 34, p. 18; Ai Group, Submission 35, p 5; SCA , Submission 39, pp. 10–12.
  • 111
    Ai Group, Submission 35, p. 5.
  • 112
    Mr Scott Hartley, Chief Executive Officer, AMP, Proof Committee Hansard, 7 April 2021, p. 33; AIMA, Submission 10, p. 2, QSuper, Submission 25, pp. 5–6.
  • 113
    Dr David Bell, Executive Director, The Conexus Institute, Proof Committee Hansard, 7 April 2021, p. 9.
  • 114
    Ms Emily Barlow, Senior Investment Consultant, Mercer, Proof Committee Hansard, 8 April 2021, p. 11.
  • 115
    QSuper, Submission 25, pp. 1–2; FSC, Submission 32; Dr Fahy, ASFA, Proof Committee Hansard, 7 April 2021, p. 16.
  • 116
    QSuper, Submission 25, pp. 1 and 7.
  • 117
    Hesta, Submission 16, p. 7; Dr Donald, Submission 19, p. 5.
  • 118
    Dr Katrina Ellis, General Manager, Superannuation, APRA, Proof Committee Hansard, p. 60.
  • 119
    'The MySuper Product Heatmap provides assessments of the performance of every MySuper superannuation product. The[APRA] Heatmap provides stakeholders with transparency on the outcomes being delivered by all trustees providing MySuper products. It is designed to lift industry practices and enhance member outcomes by publicly identifying which MySuper products are underperforming and the areas they need to improve’. APRA, MySuper Product Heatmap, June 2020, (accessed 15 April 2021).
  • 120
    APRA, Submission 15, p. 2.
  • 121
    Mrs Helen Rowell, APRA, Proof Committee Hansard, 7 April 2021, p. 60.
  • 122
    Mercer, Submission 11, p. 9; FSC, Submission 32, p. 15.
  • 123
    Mercer, Submission 11, p. 9.
  • 124
    Dr Donald, Submission 19, p. 6.
  • 125
    CPA and CA, Submission 13, p. 6.
  • 126
    APRA, Submission 15, p. 3.
  • 127
    Dr Bell, Conexus, Proof Committee Hansard, 7 April 2021, p. 8.
  • 128
    FSC, Submission 32, p. 13.
  • 129
    Aware Super, Submission 31, p. 3; AMP, Submission 33, p. 6.
  • 130
    AIST, Submission 28, p. 11.
  • 131
    ASFA, Submission 27, p. 7; FSC, Submission 32, p. 5; CPA and CA, Submission 13, p. 6.
  • 132
    CPA and CA, Submission 13, p. 6.
  • 133
    CPA and CA, Submission 13, p. 7.
  • 134
    Life cycle or glidepaths are interchangeable terms used to refer to investment strategies where the asset allocation changes over time primarily to suit the different life stages of career and towards retirement (generally through the accumulation phase).
  • 135
    CPA and CA, Submission 13, p. 2.
  • 136
    ASFA, Submission 27, p. 7.
  • 137
    ASFA, Submission 27, p. 8.
  • 138
    Mercer, Submission 11, pp. 8–9.
  • 139
    Mercer, Submission 11, p. 10.
  • 140
    FSC, Submission 32, p. 12.
  • 141
    Aware Super, Submission 31, p. 3.
  • 142
    QSuper, Submission 25, p. 7.
  • 143
    ISA, Submission 8, p. 2; REST, Submission 14, p. 6; HESTA, Submission 16, p. 6.
  • 144
    HESTA, Submission 16, p. 6.
  • 145
    Dr Donald, Submission 19, p. [4].
  • 146
    Dr Katrina Ellis, General Manager, Superannuation, APRA, Proof Committee Hansard, 7 April 2021, p. 60.
  • 147
    Mrs Helen Rowell, APRA, Proof Committee Hansard, 7 April 2021, p. 60.
  • 148
    Mr Alex Maevsky, Acting Assistant Secretary, Retirement Income Policy Division, Treasury, Proof Committee Hansard, 8 April 2021, p. 54.
  • 149
    JANA, Submission 8, p. 2.
  • 150
    AIST, Submission 28, p. 10.
  • 151
    ACTU, Submission 9, p. 9.
  • 152
    Cbus, Submission 26, p. 3.
  • 153
    SDA, Submission 2, p. 3; Dr Donald, Submission 19, p. 7; ASFA, Submission 27, p. 4.
  • 154
    Dr Donald, Submission 19, p. 7.
  • 155
    AMP, Submission 33, p. 4.
  • 156
    MBL, Submission 7, p. 8.
  • 157
    AIST, Submission 28, p. 22.
  • 158
    Mercer, Submission 11, p. 7.
  • 159
    ACTU, Submission 9, p. 7.
  • 160
    MBL, Submission 7, p. 9; Mercer, Submission 11, p. 7; FSC, Submission 32, p. 9; AIST, Submission 28, p. 22.
  • 161
    Cbus, Submission 26, p. 20; CPA and CA, Submission 13, p. 8; AIST, Submission 28, p. 6.
  • 162
    FSC, Submission 32, p. 9; AIST, Submission 28, p. 6.
  • 163
    AIST, Submission 28, p. 10.
  • 164
    Mercer, Submission 11, p. 7.
  • 165
    AIST, Submission 28, p. 23.
  • 166
    Ms Evans, Australian Taxation Office, Proof Committee Hansard, 8 April 2021, p. 52.
  • 167
    APRA, Submission 15, p. 3.
  • 168
    CPA and CA, Submission 13, p. 2.
  • 169
    MBL, Submission 7, p. 12; McKell, Submission 34, p. 6.
  • 170
    MBL, Submission 7, p. 11.
  • 171
    MBL, Submission 7, pp. 2 and 11.
  • 172
    ISA, Submission 8, p. 5.
  • 173
    Australian Institute of Company Director, Submission 37, p. 1; IFM Investors, Submission 24, p. [1]; LCA, Submission 36, pp. 1–2.
  • 174
    Mr Ian Silk, Chief Executive Officer, AustralianSuper, Proof Committee Hansard, 8 April 2021, p. 41.
  • 175
    SDA, Submission 2, p. 7; ACTU, Submission 9, p. 10; HESTA, Submission 16, p. 8; Professor Thomas Clarke, Submission 22, p. 8; LCA, Submission 36, p. 2; Australian Institute of Company Directors (AICD), Submission 37, p. 3; Australian Council of Superannuation Investors (ACSI), Submission 17, p. 3; AustralianSuper, Submission 41, p. 5.
  • 176
    Aware Super, Submission 31, p. 4; AMP, Submission 33, p. 14; Market Forces, Submission 42, p. 3.
  • 177
    ACSI, Submission 17, p. 3.
  • 178
    MBL, Submission 7, p. 10.
  • 179
    AICD, Submission 37, p. 3.
  • 180
    Dr Donald, Submission 19, p. 10.
  • 181
    Mr Blake Briggs, Deputy Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 7 April 2021, p. 45.
  • 182
    Ai Group, Submission 35, p. 2; Responsible Investment Association Australia (RIAA), Submission 6, p. 3.
  • 183
    LCA, Submission 36, p. 1.
  • 184
    CPA and CA, Submission 13, p. 8.
  • 185
    QSuper, Submission 25, p. 2; Prime Super, Submission 18, p. [3].
  • 186
    IOOF, Submission 29, p. 3; LCA, Submission 36, pp. 1–2.
  • 187
    SDA, Submission 2, p. 7.
  • 188
    FSC, Submission 32, p. 5.
  • 189
    CPA and CA, Submission 13, p. 9; IOOF, Submission 29, p. 3.
  • 190
    Explanatory Memorandum, p. 41.
  • 191
    MBL, Submission 7, p. 10.
  • 192
    QSuper, Submission 25, p. 2.
  • 193
    NFAW, Submission 1, p. 1.
  • 194
    QSuper, Submission 25, p. 3.
  • 195
    HESTA, Submission 16, p. [0]; QSuper, Submission 25, p. 3.
  • 196
    AMP, Submission 33, p. 14; Cbus, Submission 26, p. 3; LCA, Submission 36, p. 2; QSuper, Submission 25, p. 3.
  • 197
    Mr Silk, AustralianSuper, Proof Committee Hansard, 8 April 2021, p. 44.
  • 198
    QSuper, answer to spoken question on notice, 7 April 2021, received 13 April 2021, pp. 1–3; QSuper, Submission 25, p. 3.
  • 199
    LCA, Submission 36, p. 2.
  • 200
    Mr David Haynes, Senior Policy Manager, Australian Institute of Superannuation Trustees, Proof Committee Hansard, 8 April 2021, p. 14.
  • 201
    ISA, Submission 8, p. 1; HESTA, Submission 16, p. 8; Cbus, Submission 26, p. 17.
  • 202
    SDA, Submission 2, p. 7; ACTU, Submission 9, p. 10.
  • 203
    HESTA, Submission 16, pp. 8–9; ACTU, Submission 9, p. 10.
  • 204
    AustralianSuper, Submission 41, p. 7.
  • 205
    MBL, Submission 7, p. 12.
  • 206
    Proof Committee Hansard, 7 April 2021, p. 61.
  • 207
    Professor Clarke, Submission 22, p. 8.
  • 208
    Conexus, Submission 12, p. 16. See paragraphs 2.24-2.25 above on advertising related to stapling.
  • 209
    ACSI, Submission 17.
  • 210
    ACSI, Submission 17, p. 4.
  • 211
    ACSI, Submission 17, p. 4; Market Forces, Submission 42, p. 4.
  • 212
    AICD, Submission 37, p. [5].
  • 213
    CPA and CA, Submission 13, p. 2.
  • 214
    AICD, Submission 37, p. [5].
  • 215
    IOOF, Submission 29, p. 3.
  • 216
    RIAA, Submission 6, p. 4.
  • 217
    AIST, Submission 28, p. 38.
  • 218
    ACTU, Submission 9, p. 1; HESTA, Submission 16, p. 8; IFM Investors, Submission 24, pp. [1]–[2]; Cbus, Submission 26, p. 22; Ai Group, Submission 35, pp. 8–9; AICD, Submission 37, p. [7]; ACSI, Submission 17, p. 4; ASFA, Submission 27, p. 13; AustralianSuper, Submission 41, p. 8; ISA, Submission 8, p. 9; Aware Super, Submission 31, p. 5; Market Forces, Submission 42, p. 7.
  • 219
    CPA and CA, Submission 13, p. 9.
  • 220
    ISA, Submission 8, p. 7.
  • 221
    MBL, Submission 7, p. 12.
  • 222
    Professor Clarke, Submission 22, p. 9.
  • 223
    ACTU, Submission 9, p. 1.
  • 224
    ACTU, Submission 9, p. 11.
  • 225
    AIST, Submission 28, p. 7.
  • 226
    Professor Clarke, Submission 22, p. 9.
  • 227
    RIAA, Submission 6, p. 5; MBL, Submission 7, p. 12; Investor Group on Climate Change, Submission 30, p. 2; ACSI, Submission 17, p. 4; Professor Clarke, Submission 22, p. 9.
  • 228
    MBL, Submission 7, p. 12.
  • 229
    ACTU, Submission 9, p. 12.
  • 230
    QSuper, Submission 25, pp. 3–4.
  • 231
    ISA, Submission 8, p. 7.
  • 232
    IFM Investors, Submission 24, p. [1–2].
  • 233
    Commonwealth of Australia, Final Report: Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Hayne Final Report), p. 235; ASFA, Submission 27, p. 13.
  • 234
    Hayne Final Report, p. 235; AICD, Submission 37, p. [4].
  • 235
    Mr James Pawluk, McKell, Proof Committee Hansard, 8 April 2021, p. 2.
  • 236
    McKell Institute, Submission 34, p. 5.
  • 237
    Dr Donald, Submission 19, p. [9].
  • 238
    SCA, Submission 39, pp. 17–18.
  • 239
    ASFA, Submission 27, p. 13.
  • 240
    CPA and CA, Submission 13, p. 2.
  • 241
    ASFA, Submission 27, p. 12.
  • 242
    APRA, Submission 15, p. 3.
  • 243
    CPA and CA, Submission 13, p. 8; Cbus, Submission 26, p. 19; AICD, Submission 37, p. 6; ASFA, Submission 27, p. 14.
  • 244
    HESTA, Submission 16, p. 1; IFM Investors, Submission 24, p. 1; QSuper, Submission 25, p. 2; Aware Super, Submission 31, p. 5; AMP, Submission 33, p. 14; AustralianSuper, Submission 41, p. 6.
  • 245
    ACSI, Submission 17, p. 3.
  • 246
    MBL, Submission 7, p. 11.
  • 247
    ASFA, Submission 27, p. 15.
  • 248
    CPA and CA, Submission 13, p. 9.
  • 249
    Cbus, Submission 26, p. 19; ASFA, Submission 27, p. 17.
  • 250
    AICD, Submission 3, p. [6].
  • 251
    LCA, Submission 36 Attachment 1, p. 9.
  • 252
    LCA, Submission 36 Attachment 1, p. 9.
  • 253
    LCA, Submission 36 Attachment 1, pp. 9–10.
  • 254
    Ms Nadia Bromley, Acting General Counsel, QSuper, Proof Committee Hansard, p. 52; Mr Silk, AustralianSuper, Proof Committee Hansard, 8 April 2021, p. 44.
  • 255
    LCA, answer to spoken question on notice, 7 April 2021 (received 13 April 2021).
  • 256
    IOOF, Submission 29, p. 3.
  • 257
    AIST, Submission 28, p. 11; AMP, Submission 33, p. 15; ACSI, Submission 17, p. 3.
  • 258
    Dr Peter Burn, Chief Policy Advisor, Ai Group, Proof Committee Hansard, 7 April 2021, p. 36.
  • 259
    IOOF, Submission 29, p. 3.
  • 260
    ISA, Submission 8, p. 2; ACTU, Submission 9, p. 11.
  • 261
    RIAA, Submission 6, p. 4; QSuper, Submission 25, p. 3; IOOF, Submission 29, p. 3.
  • 262
    IOOF, Submission 29, p. 3.
  • 263
    LCA, Submission 36, p. 9.
  • 264
    IOOF, Submission 29, p. 3.
  • 265
    Rainmaker, Submission 4, p. 5; CPA and CA, Submission 13, p. 9; Market Forces, Submission 42, p. 8.
  • 266
    ACTU, Submission 9, p. 12, IFM Investors, Submission 24, p. [2]; QSuper, Submission 25, pp. 4–5; Cbus, Submission 26, p. 24.
  • 267
    Rainmaker, Submission 4, p. 5.
  • 268
    Mr Silk, AustralianSuper, Proof Committee Hansard, 8 April 2021, p. 45.
  • 269
    ACTU, Submission 9, p. 12.
  • 270
    QSuper, Submission 25, p. 4.
  • 271
    Cbus, Submission 26, p. 24.
  • 272
    Ms Lynn Kelly, First Assistant Secretary, Retirement Income Policy Division, Treasury, Proof Committee Hansard, 8 April 2021, p. 50.
  • 273
    AIST, Submission 28, p. 5.
  • 274
    Dr David Knox, Senior Partner, Mercer, Proof Committee Hansard, 8 April 2021, Melbourne, p. 7.
  • 275
    Mercer, Submission 11, p. 3.
  • 276
    HESTA, Submission 16, p. 1.
  • 277
    Cbus, Submission 26, p. 3.
  • 278
    Mr Pawluk, McKell, Proof Committee Hansard, 8 April 2021, p. 4.
  • 279
    See ACTU, Submission 9, p. 6; ISA, Submission 8, p. 2; and JANA, Submission 20, p. 2.
  • 280
    Mr Alastair Kinloch, Director, Government Affairs and Public Policy, AMP Australia, Proof Committee Hansard, 7 April 2021, p. 30.
  • 281
    AustralianSuper, Submission 41, p. 6.
  • 282
    ACSI, Submission 17, p. 3.
  • 283
    Explanatory Memorandum, p. 4.
  • 284
    Dr Donald, Proof Committee Hansard, 7 April 2021, p. 2.
  • 285
    MBL, Submission 7, p. 5.
  • 286
    AIMA, Submission 10, p. 3.

 |  Contents  |