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  • SISG key messages 1 August 2016

    The Superannuation Industry Stewardship Group (SISG) met in Sydney on 1 August 2016.

    The following announcements were noted:

    • Pauline Vamos is no longer in the role of CEO of ASFA. Jim Minto is the interim head of ASFA. Glen McCrea will be the SISG representative moving forward.
    • The new head of ACCI is James Pearson. Dick Grozier will continue to be the SISG representative.

    Superannuation landscape

    A ‘round table’ open discussion was held to hear how members were viewing the Superannuation environment at the moment.

    Some members noted that there was a level of uncertainty within the community at the moment, particularly due to the superannuation budget package.

    It was noted that there was still some other activities underway which will influence the final policy settings.

    Some members stressed the importance and the desire to see draft legislation progressed quickly for the budget measures allowing advisors, funds and administrators sufficient time to be able to implement the required systems and processes.

    A desire was expressed for a structured and coordinated approach to the introduction of legislation across the range of policy issues that are still to be finalised and the communication activities to support this desire.

    The prevailing economic conditions and the potential impacts that these conditions may have on superannuation returns in the long term (although more on nominal than real returns) were raised as a material issue for the industry.

    It was agreed that absolute returns are likely to be lower but more volatile into the future, however at this stage real returns were being maintained. Industry was encouraged to consider strategies to better communicate that, and its implications for member retirement outcomes.

    Impacted regulators appreciated the insights and confirmed that it would be important to work together to ensure a smooth transition as soon as the policy and law were confirmed.

    Implementation of the superannuation budget package

    Jenny Wilkinson, Retirement Income Policy Division Head, Treasury led discussion around the superannuation budget package, including policy and implementation considerations.

    Insurance in superannuation

    Helen Rowell and Ged Fitzpatrick led a discussion to invite feedback from industry on issues being experienced around insurance within superannuation and how they were being addressed by industry.

    There was discussion on the issues of multiple accounts and insurance policies, and also members limited understanding on what their coverage includes. The impact of the cost of insurance on member retirement outcomes over an individual’s life was raised, along with the need for consideration of the appropriate insurance arrangements (level & type) at different life stages.

    It is important that the issue is considered from a whole of system view and the problems are clearly defined.

    APRA encouraged members to initiate discussions within the superannuation industry and with the insurance sector, to consider industry-wide approaches for addressing these matters.

    APRA and ASIC were open to being part of these discussions and keen to hear industry views.

    Productivity Commission

    The chair welcomed guest Karen Chester, Deputy Chair, Productivity Commission (PC).

    Karen informed the group that the draft study report on how to assess the competitiveness and efficiency of the superannuation system is being released on 2nd August. The study is the first of 3 stages of super work the Government has tasked the PC to undertake over the next 2 years.

    The draft study report contains details of the proposed framework that the PC will use (in stage 3) to assess the efficiency and competitiveness of Australia’s superannuation system and determine how well the super system is able to meet its primary purpose of providing retirement income. 

    The approach of the review was to define what the superannuation system is trying to achieve, formulate assessment criteria based on those objectives and then identify indicators to facilitate the assessment (currently 89 proposed).

    Measurements will include both quantitative and qualitative measures, with a mix of input/ process, behavioural, output and outcome indicators. Collective interpretation, contextual evidence and judgment will be required. Most of the data and information needed exists and the study identifies the gaps and how the PC proposes to fill them for stage 3.

    To progress the review, the consultation plan is for roundtables to be held with industry in late August, with post draft submissions due by 9 September. The final report will be provided to government in late November and publically released in early December.

    Superannuation guarantee gap

    The chair welcomed guests Debbie Rawlings, Kate Wilson and Paul Brodie from the Australian Taxation Office (ATO).

    The methodology being used to determine the SG gap was discussed. The ATO is planning to use the methodology to monitor the trend over time.

    The SG Gap is planned to be released in the ATO’s Annual Report at the end of October, along with a range of other taxation gaps.

    Other business

    A request was made to delay the next meeting by a week as the ASFA conference is being held the week before the current planned date (14 November).

    Chair, James O’Halloran thanked members for their contribution to the discussion.

    Next Meeting

    Wednesday 23 November in Melbourne.

    Action items

    Action item 20160801-1

    Additional information on Law Companion Guidelines to be provided by the ATO.

    Action item 20160801-2

    A phone hook-up will be arranged for interested parties to discuss the methodology in more detail.

    Attendees

    Australian Taxation Office

    James O’Halloran, Deputy Commissioner, Superannuation (Chair)

    Jason Lucchese, Assistant Commissioner, Superannuation

    Sarah Kimmorley, Senior Director, Superannuation

    Kylie Smith, Superannuation

    Guests

    Karen Chester, Deputy Chair, Productivity Commission

    Debbie Rawlings, Assistant Commissioner, Superannuation

    Kate Wilson, Senior Director, Superannuation

    Paul Brodie, Senior Director, Policy, Analysis and Legislation

    Treasury

    Jenny Wilkinson

    Ian Beckett

    Australian Prudential Regulation Authority (APRA)

    Helen Rowell

    Carolyn Morris

    Australian Securities & Investment Commission (ASIC)

    Ged Fitzpatrick

    Alex Purvis

    Australian Chamber of Commerce and Industry (ACCI)

    Dick Grozier

    Australian Institute of Superannuation Trustees (AIST)

    Tom Garcia

    Association of Super Funds Australia (ASFA)

    Glen McCrea

    CPA Australia

    Paul Drum

    Chartered Accountants Australia and New Zealand

    Tony Negline

    Financial Planning Association of Australia (FPA)

    Ben Marshan

    Financial Services Council (FSC)

    Blake Briggs

    Law Council of Australia

    Heather Gray

    Mercer

    David Knox

    SMSF Association

    Andrea Slattery

    Apologies

    Australian Bankers' Association (ABA)

    Diane Tate

    Financial Planning Association of Australia (FPA)

    Dante De Gori

      Last modified: 20 Jan 2017QC 50919