ASIC gives warning to super trustees blog image

ASIC gives warning to super trustees

Facebook Twitter LinkedIn Mail Us


The Australian Securities and Investments Commission (ASIC) has placed superannuation funds on notice, informing super trustees that they need to apply the Protecting Your Super package reforms which are due to take effect on 1 July 2019, and their members should be thoroughly informed.

ASIC stated that any information given to members in adding the reforms need to be balanced and accurate, with the regulator being prepared to act where it finds communications as misleading. ASIC is collaborating with the Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) to carry out the legislative updates.

ASIC Commissioner Danielle Press added, “How a trustee communicates with their members about the PYSP changes will give us an indication of the trustee’s commitment to members’ best interests.”

Protecting Your Super package reforms

The Protecting Your Super package reforms are intended to safeguard super savings from erosion by aiming at “inappropriate fees and insurance premiums”, along with decreasing the amount of unintentional multiple low balance accounts.

“Erosion of superannuation through unnecessary fees and premiums for potentially unsuitable insurance is a significant issue for many Australians,” Ms Press stated.

“Most consumers are not aware of the fees and insurance premiums charged to their superannuation accounts or the steps they can take to avoid unnecessary reduction in their super balance.”

The ATO approximates that roughly $6 billion will be consolidated due to the changes starting 1 July.

The modifications include banning exit fees for transferring money from a super account, insurance will be opt-in for accounts that have been non-active for 16 months, and fee caps being imposed on certain fees for account balances under $6,000.

In addition, members with balances under $6,000 that have not been active for 16 months will have their accounts paid to the ATO. The ATO will then take proactive steps to consolidate this with the members’ active super fund.

According to Ms Press, super trustees should not encourage its members to maintain insurance as many members with inactive accounts will be better off allowing the insurance to lapse.

She adds, “Similarly, trustees should not be urging all members with low-balance accounts to keep their account within the fund as this may not be in the best interests of members.”

Need superannuation strategies, management, and administrative compliance advice? Contact a trusted Chan & Naylor adviser here today. We’ll be glad to help.

Disclaimer

Aside from reliable superannuation advice, have a look at our other accounting and advisory services that we do to help you achieve greater success.

If you liked our post, “ASIC gives warning to super trustees”, subscribe to our newsletter and stay in touch with us on our main Facebook page, the Pymble Facebook page, as well as our Linkedin, Instagram, and Twitter pages.

The Chan & Naylor Group has national offices in North Sydney, South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that will be glad to provide you with expert superannuation advice. Contact us today.

 
 
 
 

Warning

The material on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this website are provided for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this website, lnfocus, its officers, representatives, employees and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Leave a Reply

Your email address will not be published. Required fields are marked *

Join our mailing list today!

Keep up to date with our latest news & updates!