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  • Superannuation Industry Stewardship Group key messages 2 December 2019

    Welcome and introduction

    James O’Halloran opened the meeting with an acknowledgment of country, welcomed members, noted apologies and gave an overview of the scheduled agenda.

    Meeting protocols

    James O’Halloran, Deputy Commissioner, ATO, updated the group on the Superannuation Industry Stewardship Group charter, noting some changes and reiterating the confidential nature of some topics and/or discussions. The members accepted the Charter.

    Retirement Income Review

    Robb Preston, Secretariat to the Retirement Income Review, gave an update on the Retirement Income Review consultation paper. The paper was issued 22 November 2019 and is open for consultation until 3 February 2020. He drew attention to the Panel’s request that submissions provide evidence to support the views they express. The full panel will be having consultation meetings in Melbourne on 9 December 2019 and Sydney on 10 December 2019.

    The Review will focus on three pillars of Australia’s retirement income system:

    • a publicly funded and means tested safety net in the form of the Age Pension
    • compulsory savings through the superannuation guarantee (SG)
    • voluntary savings through additional superannuation contributions and other financial or non-financial assets.

    The Review panel has identified four principles it proposes to use to assess the performance of Australia’s retirement income system. They are:

    • adequacy – whether the system allows for Australians to achieve an adequate standard of living in retirement
    • equity – whether the system produces fair outcomes for different groups of Australians
    • sustainability – whether the system is able to continue to meet its objectives into the future and maintain broad community support
    • cohesion – whether the incentives across the system reinforce or conflict with the system’s objectives both before and during retirement

    Superannuation environment and overview

    James O’Halloran, Deputy Commissioner, ATO, noted the Superannuation System Strategic Map attached to the agenda, which covers the forward program of change impacting Australian Prudential Regulation Authority (APRA) funds, Individuals, SMSFs, Employers and Financial Intermediaries for the next 18 months.

    Members noted the full agenda and acknowledged the value in having a map of the forward program of work.

    The Melbourne Mercer Global Pension Index 2019

    David Knox, Senior Partner, Mercer, discussed the recently released Melbourne Mercer Global Pension Index (MMGPI) 2019. The MMGPI uses three sub-indices – adequacy, sustainability and integrity – to measure across 37 retirement income system (representing more than 63% of the world’s population) against more than 40 indicators.

    Update on the Heatmap on the performance of MySuper Products

    Alison Bliss, General Manager, APRA, and Chris Young, Principal Analyst, APRA, provided a walkthrough on a sample MySuper Product Heatmap. It was noted that the Heatmap is one component of the changes for improving member outcomes. The steps of development included the:

    • selection of metrics
    • performance across metrics
    • how the data would be displayed and publishing.

    The Heatmap considers a range of issues including:

    • investment performance - considers performance relative to benchmarks
    • fees - considers fees charged to members as disclosed in their product disclosure statement (PDS)
    • sustainability of member outcomes - the ability of the Trustees to sustain performance into the future and address current performance issues.

    Member updates

    Tony Negline, Superannuation Leader, Chartered Accountants Australia New Zealand (CA ANZ), provided an overview of CA ANZ and outlined some areas of focus in 2020. Of note:

    • Australia and New Zealand Chartered Accountants merged 3-4 years ago.
    • Of the 120,000 members, 90,000 are Australian with members working for businesses of all sizes as well as in government. Members are agnostic about which super fund anyone elects to use.
    • CA ANZ priorities include fixing up financial advice including limited licensing, contributing to the Retirement Income Review and dealing with the new legislation dealing with Royal Commission and Productivity Commission super review.

    Eva Scheerlinck, CEO, Australian Institute of Superannuation Trustees (AIST), provided an overview of AIST and outlined some areas of focus in 2020. Of note:

    • They represent 47 “profit-to-member” funds and AIST are working within an Environment of fund consolidation.
    • AIST priorities for 2020 include social fairness, particularly around improving outcomes for indigenous contributors (hosting an Indigenous Super Summit in Darwin on 22 May 2020), a review of the AIST Governance Code and preparing for the Conference of Major Superannuation Funds in Adelaide on 18-20 March 2020.

    Protecting Your Super (PYS) and Putting Members Interests First (PMIF)

    Eve Brown, Senior Manager, APRA, provided an update on PYS and PMIF legislation including the process for making a Dangerous Occupation Exception Election or Withdrawal, APRA’s recently released FAQs and the guidance note recently published by the Actuaries Institute.

    James O’Halloran, Deputy Commissioner, ATO, provided an update on the ATO’s activities around proactively consolidating ATO held unclaimed super (including inactive low-balance accounts) and noted that the next round of reuniting commences in April 2020. Members noted the recent process had been a positive experience.

    ATO Progress Update

    James O’Halloran, Deputy Commissioner, ATO, noted the ATO Progress Update attached to the agenda and highlighted:

    • the release of the annual postcode data on lost and unclaimed super
    • the analysis underway on SG payment transactions from our increased data holdings
    • the intent to reduce the processing time for registering new SMSFs.

    Wrap up and close

    James O’Halloran, Deputy Commissioner, ATO, noted some highlights for the group in 2019 and thanked the members for their input. The member refresh of the committee was also noted including extending an invitation to some new members for 2020.

    Meeting dates have been pencilled in for 2020 with confirmation to come in the coming weeks.

    Attendees

    Attendees are listed below.

    Organisation

    Members

    ATO

    James O’Halloran (Co-chair), Superannuation and Employer Obligations

    ATO

    Dawn Martin (Secretariat), Superannuation and Employer Obligations

    ATO

    Brendan O’Shea (Secretariat), Enterprise Strategy and Design

    ATO

    Sheridan Harvey (Secretariat), Superannuation and Employer Obligations

    Association of Super Funds of Australia

    Fiona Galbraith

    Australian Institute of Superannuation Trustees

    Eva Sheerlinck

    Australian Prudential Regulation Authority

    Alison Bliss

    Australian Prudential Regulation Authority

    Chris Young

    Australian Prudential Regulation Authority

    Eve Brown

    Australian Securities and Investments Commission

    Jane Eccleston

    Australian Securities and Investments Commission

    Theresa Mills

    Chartered Accountants Australia and New Zealand

    Tony Negline

    Financial Services Council

    Jane Macnamara

    Industry Super Australia

    Ella Cebon

    Mercer

    David Knox (Co-chair)

    SMSF Association

    John Maroney

    The Tax Institute

    Phil Broderick

    Treasury

    Helen Sykes

    Treasury

    Michelle Dowdell

    Treasury

    Nicole Mitchell

    Treasury

    Robb Preston

    Apologies

    Apologies are listed below.

    Organisation

    Members

    Association of Super Funds of Australia

    Glen McCrea

    Australian Prudential Regulation Authority

    Helen Rowell

    Industry Super Australia

    Michael Fisher

    Law Council of Australia

    Michelle Levy

    Link Group

    Graham Sammells

    Treasury

    Robert Jeremenko

      Last modified: 17 Jan 2020QC 61133