Superannuation Industry Stewardship Group key messages 25 November 2024 |

Superannuation regulators

Treasury

The government has released a factsheet on improving the retirement phase of superannuation, detailing focus areas of enhanced independent guidance, better retirement products, best practice principles, and increased transparency. See Improving the retirement phase of superannuationOpens in a new window.

Treasury provided updates on the Better Targeted Superannuation Concessions, Payday Super, and Delivering Better Financial Outcomes measures.

Australian Securities and Investments Commission

The Australian Securities and Investments Commission (ASIC) annual forum was held on 14 November 2024. All speeches from the event are published on ASIC's website. Enforcement priorities for 2025 were discussed, including the focus on misconduct exploiting superannuation savings and member services failures.

Other key updates included:

a letter was issued to all CEOs of super fund trustees in November 2024 regarding governance and oversight, with insights relating to death benefit claims
guidance for various pieces relating to the Delivering Better Financial Outcomes package has been updated.

Australian Prudential Regulation Authority

The Australian Prudential Regulation Authority (APRA) shared key priorities including the upcoming review of governance standards and guidance covering all regulated industries, and noted a letter issued to all APRA regulated entities sharing observations of the banking industry since the commencement of the Financial Accountability Regime.

APRA is intensifying its supervision of fund expenditure as part of an ongoing focus on transparency and trustee compliance with the best financial interests duty. A report on 2023–24 fund level expenditure will be released in early 2025.

Australian Financial Complaints Authority

The Australian Financial Complaints Authority (AFCA) Annual Review 2023–24Opens in a new window was published in October 2024. Highlights include:

7,325 superannuation complaints were received across 2023–24, representing a 5% increase from last year
delay in complaint handling was the most common complaint issue (1 in 4 complaints received), followed by service quality issues, failure to follow instructions or agreement, and claim amount
superannuation accounts remain the most common product to receive complaints, with 4,391 received, followed by total and permanent disability, income protection and death benefits.

AFCA are continuing to observe members making complaints directly, rather than first engaging with their super fund's internal dispute resolution function.

Australian Taxation Office

In the lead up to Payday Super, the Australian Taxation Office (ATO) and superannuation industry can take steps to prepare for the changes. Fund systems and processes must be able to handle the volume and speed of Payday Super, including the need to resolve errors quickly to ensure that employers can meet their obligations to get contributions to funds within 7 days of payday.

The Payday Super Working Group has been established to provide overarching advice on the end-to-end administrative solution and implementation. Key outcomes from this group will be published on ato.gov.au.

Other updates included:

upcoming draft law administration practice statements
a summary of the topics discussed at the first meeting of the ATO Superannuation Public Advice Feedback Forum.

Environmental scan

Industry stakeholders provided updates regarding areas of interest within their markets.

Super Consumers Australia noted continued attention on member services, including internal dispute resolution processes. It is important for super funds to reflect on their customer service offering to drive continual improvement.

The Association of Superannuation Funds of Australia has a continuing focus on fraud in super, and the need for consumer protection. There are opportunities for the superannuation industry to learn from the experience of the banking sector.

The Super Members Council of Australia will soon release research on life events that can tip women into poverty.

In 2025, COTA Australia will investigate how super interacts with other sectors. Currently banks cannot tell the difference between an annuity, or distinguish between a one-off or regular payment, which can have impacts for older Australians accessing credit.

The Actuaries Institute noted regulatory constraints that can restrict the provision of superannuation actuarial advice. A submission has been made to Treasury regarding this issue.

Several members have work underway to uplift services for First Nations and vulnerable clients. Members noted there needs to be policy change to drive improvement for this sector of the market.

Super guarantee compliance

The ATO has released the 2023–24 Super guarantee annual employer compliance results. Highlights of the 2023–24 financial year are:

The ATO increased compliance actions with 23,600 audits and 167,000 nudges and prompters compared to 14,000 audits and 134,000 prompts in 2022–23.
A total of $1.91 billion in super guarantee charge (SGC) liabilities was raised for over 1.13 million employees through ATO compliance, proactive reminders and prompts, and employer voluntary disclosures. Employer voluntary disclosures accounted for $539 million of the total amount.
The net super guarantee gap is 6.3%, or $5.16 billion. This is less in percentage terms compared to the prior year, however higher in dollar terms. The gap was estimated this year based on our random enquiry program.
$932 million was paid to the super funds for over 797,000 individuals.

This year the ATO will continue to increase the number of nudges and audits. The ATO is also expanding the use of data from Single Touch Payroll, Member Account Transaction Service and SGC, and identifying mismatches in reporting and payments at the individual level.

The intention is to progressively interact with employers earlier, providing them with the visibility of this information to improve super payment outcomes and to rely less on notifications of unpaid super.

The quality of data from employers and super funds is important, this process will help identify issues and seek to correct them in the lead up to Payday Super.

Mercer CFA Institute Global Pension Index

Highlights from the Mercer CFA Institute Global Pension Index 2024 (the Index) were summarised. The Index benchmarks 47 retirement income systems around the world, based on adequacy, sustainability, and integrity.

Australia rated sixth place with a B plus grade. Only 4 countries received an A grade in 2024, the Netherlands, Iceland, Denmark, and Israel. The group discussed how Australia can reach an A grade, including:

introducing a requirement to take a retirement income stream
income projections on annual statements
requiring unisex annuities
introducing government super contribution for carers
increasing the net pension replacement rate for Australia.

First Nations super members

Mob Strong Debt Help, Financial Counselling Australia, First Nations Foundation and Super Consumers Australia talked members through the systemic issues experienced by First Nations super members, and the financial counsellors who assist them. Key themes and barriers that can affect how First Nations super members interact with the system include:

a lack of good consumer information and processes for finding and managing super
online-only account administration, services and information can leave people behind, and using the post doesn't always work
inflexible ID verification processes are preventing access to accounts and super benefits
insufficient cultural competency and no trauma-informed approach for frontline customer service teams
failure to recognise financial counsellors' authority to communicate and act on behalf of First Nations clients
death benefit processes that are difficult to navigate under the kinship system.

The group discussed these themes, and members were encouraged to consider the issues raised, and explore how their organisation could advocate for, or implement change in order to improve the experiences of First Nations members in the superannuation system.

Treatment of member data

AFCA frequently receives complaints from super fund members advising their fund has not honoured their preferences. When a successor fund transfer (SFT) or merger occurs, often the ongoing trustee will not have complete member records. This information can get lost during the transfer, making it difficult for AFCA to piece together what has happened.

Members noted when trustees move from one service provider to another for administration purposes, there will need to be negotiations to obtain past records. There are commercial terms to a transfer, with records held for only a limited time.

The group acknowledged the potential for the use of non-lapsing nominations and the importance of consistency and adherence to the data standards. Members noted it is the responsibility of the trustee to ensure member records are accurate.

Changes to APRA Prudential Standard SPS 515 Strategic Planning and Member Outcomes, which commence in 2025, outline expectations around transfer planning. There is an expectation that trustees will identify potential risks to a successful transfer and take any required mitigating actions.

The ATO recently updated the SFT reporting protocol, this guidance reminds funds of the necessary steps to ensure a positive SFT experience for members.

Attendees

Attendees list
Organisation	Member
ATO	Emma Rosenzweig (Co-chair), Superannuation and Employer Obligations
ATO	Justin Micale, Superannuation and Employer Obligations
Actuaries Institute	Timothy Jenkins
The Association of Superannuation Funds of Australia	James Koval
Australian Financial Complaints Authority	Heather Gray
Australian Prudential Regulation Authority	James Douglas
Australian Prudential Regulation Authority	Megan Fenner
Australian Prudential Regulation Authority	Sarah Nicholson
Australian Securities and Investments Commission	Jessica Spence
Business Council of Australia	Stephen Kirchner
Chartered Accountants Australia and New Zealand	Tony Negline
Financial Services Council	Kirsten Samuels
MUFG Pension & Retirement Solutions	Deborah Schembri
Mercer	David Knox (Co-chair)
SMSF Association	Peter Burgess
Super Consumers Australia	Xavier O’Halloran
Super Members Council of Australia	Emily Millane
The Tax Institute	Phil Broderick
Treasury	Neena Pai
Treasury	Victoria Woolley

Guest attendees

Guest attendees list
Organisation	Attendee
ATO	Cathryn Hummel, Superannuation and Employer Obligations
ATO	Peta Lonergan, Superannuation and Employer Obligations
Australian Prudential Regulation Authority	Chanum Torres
Australian Prudential Regulation Authority	Claire Mitchell
Australian Securities and Investments Commissioner	Nathan Boyle
COTA Australia	Corey Irlam
Financial Counselling Australia	Lynda Edwards
First Nations Foundation	Phil Usher
Law Council of Australia	Lisa Butler Beatty
Mob Strong Debt Help	Bettina Cooper
Mob Strong Debt Help	Mark Holden
Treasury	Adam Hawkins
Treasury	Sally Greener

Apologies list

Apologies list
Organisation	Member
Australian Securities and Investments Commission	Pippa Lane
COTA Australia	Patricia Sparrow
Law Council of Australia	Michael Mathieson
Treasury	Emily Martin

Superannuation Industry Stewardship Group key messages 25 November 2024