Federal Government Winding Back Super Fund Accountability Reforms

[Caesar]

Labor is winding back reforms meant to hold super funds accountable to their members

The requirement that super funds act in the best financial interests of their members is up for review, as is the nature of the performance test that weeds out poorly-performing funds.

theconversation.com

Could someone explain the ALP's motivations here? On the face of it, seems a bit counter to their normal policy direction, so not sure if I am missing something.

 

[William Wonka]

Labor is winding back reforms meant to hold super funds accountable to their members

The requirement that super funds act in the best financial interests of their members is up for review, as is the nature of the performance test that weeds out poorly-performing funds.

theconversation.com

Could someone explain the ALP's motivations here? On the face of it, seems a bit counter to their normal policy direction, so not sure if I am missing something.

Simple.
Unions operate the Industry super funds.
The coalition introduced this with the express purpose of taking away from workers and handing it to the Employer groups and banks.

 

[Power Raid]

Labor is winding back reforms meant to hold super funds accountable to their members

The requirement that super funds act in the best financial interests of their members is up for review, as is the nature of the performance test that weeds out poorly-performing funds.

theconversation.com

Could someone explain the ALP's motivations here? On the face of it, seems a bit counter to their normal policy direction, so not sure if I am missing something.

the change enables YOUR superannuation to be used to fund lobby groups interests rather than YOUR retirement and ACTUAL interest and ACTUAL benefit

 

[Caesar]

The coalition introduced this with the express purpose of taking away from workers and handing it to the Employer groups and banks.

Coalition motivations aside, can you explain a little bit more about how specifically the rollbacks are in workers’ interests? It’s not totally clear to me

It seems to me that it will increase the opportunity for funds to divert money to activities that don’t grow members’ super balances - which seems bad for workers

But I may be missing something

 

[Power Raid]

Simple.
Unions operate the Industry super funds.
The coalition introduced this with the express purpose of taking away from workers and handing it to the Employer groups and banks.

employees can still contribute to unions

if employees don't contribute, this is the best expression of will and assessment of their actual interest


unfortunately third parties, aka thieves, know better about what your interests are than you do

 

[Carn The Berries]

Simple.
Unions operate the Industry super funds.
The coalition introduced this with the express purpose of taking away from workers and handing it to the Employer groups and banks.

Care to explain how changing the onus of funds to act in the best financial interest of its members is taking money away from members compared to the previous policy settings?

 

[William Wonka]

employees can still contribute to unions

if employees don't contribute, this is the best expression of will and assessment of their actual interest


unfortunately third parties, aka thieves, know better about what your interests are than you do

If people wish to move their super to a retail fund they can do this too.

Care to explain how changing the onus of funds to act in the best financial interest of its members is taking money away from members compared to the previous policy settings?

Operating the industry superfunds (which have always outperformed retail super funds by a country mile) provides income for the Unions which the LNP hates.
However it's the massive investment clout that the industry funds now have that they really despise.
This gives the Unions the power to invest in ethical, equitable and sustainable investments that benefit members and society as a whole.

Whereas the Banks funds will happily sink every penny into a balanced mix of 'United Slave holdings' 'XNCT Tobacco and Asbestos pty ltd' 'Puppy torturers Inc' and 'Nippon Whale meat supplies' if it would squeeze an extra .01cent for their balance sheet.

 

[Carn The Berries]

If people wish to move their super to a retail fund they can do this too.



Operating the industry superfunds (which have always outperformed retail super funds by a country mile) provides income for the Unions which the LNP hates.
However it's the massive investment clout that the industry funds now have that they really despise.
This gives the Unions the power to invest in ethical, equitable and sustainable investments that benefit members and society as a whole.

Whereas the Banks funds will happily sink every penny into a balanced mix of 'United Slave holdings' 'XNCT Tobacco and Asbestos pty ltd' 'Puppy torturers Inc' and 'Nippon Whale meat supplies' if it would get squeeze an extra .01cent for their balance sheet.

That's a moral choice that people can make. It amazes me that there is anyone who thinks winding back provisions that require a super fund to act in the best financial interests of its members is a good idea.

The other thing to consider is that the current guidelines assess the performance of a fund against a relevant benchmark. So if a fund wants to promote itself as investing in only "x" type of project, its performance benchmark will be against all of the "x" type projects available. Again, I can't understand what the rationale is from people who think this sort of evaluation shouldn't be in place.

 

[HurleyHepsHird]

Labor is winding back reforms meant to hold super funds accountable to their members

The requirement that super funds act in the best financial interests of their members is up for review, as is the nature of the performance test that weeds out poorly-performing funds.

theconversation.com

Could someone explain the ALP's motivations here? On the face of it, seems a bit counter to their normal policy direction, so not sure if I am missing something.

Because the "reforms" were not equitable.

They were designed to give underperforming retail super a leg up.

 

[Carn The Berries]

Because the "reforms" were not equitable.

They were designed to give underperforming retail super a leg up.

Maybe I didn't read the article properly. The benchmarking exercise that is part of the reforms means underperforming funds can be stopped from taking on new members. Surely that advantages over-performing funds?

Whether they are "equitable" or not doesn't answer the fundamental question, why shouldn't super funds have to act in the best FINANCIAL interests of its members?

 

[HurleyHepsHird]

Maybe I didn't read the article properly. The benchmarking exercise that is part of the reforms means underperforming funds can be stopped from taking on new members. Surely that advantages over-performing funds?

Whether they are "equitable" or not doesn't answer the fundamental question, why shouldn't super funds have to act in the best FINANCIAL interests of its members?

The regulations did not apply across the board and excluded the worst practitioners in the sector, the shady retail funds.

Thus they gain a competitive advantage.

Likewise, the devil would be in the details about how aggressively benchmarking/regulatory interference was used to coerce or attack industry super. I'd suggest you are assuming good faith, when the intent was malicious. If we see sector wide reform, which holds industry and retail funds to the same standard and isn't aimed at giving a conservative government means to bully funds over say choosing not to invest in fossil fuel projects, then I'd support it.

 

[Chief]

It seems to me that it will increase the opportunity for funds to divert money to activities that don’t grow members’ super balances - which seems bad for workers

Far as I recall it was put in place to stop super funds ever doing any activism. Campaigning for action on climate change, for example. Campaigning for worker rights is another. All the shiz the LNP hates because it makes them look bad.

 

[Caesar]

Far as I recall it was put in place to stop super funds ever doing any activism. Campaigning for action on climate change, for example. Campaigning for worker rights is another. All the shiz the LNP hates because it makes them look bad.

To my understanding (and please correct me if I am wrong) the rollbacks are (potentially) targeted at the following:

1. Removing the requirement for super funds to operate in the best financial interests of members
2. Removing the itemised disclosure of political contributions, payments to related parties, and marketing/promotion expenses
3. Removing the grading of super funds based on their performance against their stated investment strategy, and applying penalties to underpeforming funds

Now, I can sort of understand removing the first requirement if you accept the premise that you mention - i.e. whilst providing for retirement, people should also be able to direct that money in a way that simultaneously pursues their non-financial or political interests. I don't, but I concede that's not everyone's view.

But even accepting that premise, I don't understand how you can justify the other two requirements as being in workers' best interests. That is:

• Why should members get less information about the non-investment spending of their super money?
• Why shouldn't super funds that are failing in their fundamental purpose (providing for people's retirements) be scrutinised/punished?

It's one thing to say that super funds are about more than just funding retirement. It's quite another to remove requirements that are supposed to ensure that a retirement investment vehicle is actually performing its fundamental purpose.

 

[William Wonka]

To my understanding (and please correct me if I am wrong) the rollbacks are (potentially) targeted at the following:

1. Removing the requirement for super funds to operate in the best financial interests of members
2. Removing the itemised disclosure of political contributions, payments to related parties, and marketing/promotion expenses
3. Removing the grading of super funds based on their performance against their stated investment strategy, and applying penalties to underpeforming funds

Now, I can sort of understand removing the first requirement if you accept the premise that you mention - i.e. whilst providing for retirement, people should also be able to direct that money in a way that simultaneously pursues their non-financial or political interests. I don't, but I concede that's not everyone's view.

But even accepting that premise, I don't understand how you can justify the other two requirements as being in workers' best interests. That is:

• Why should members get less information about the non-investment spending of their super money?
• Why shouldn't super funds that are failing in their fundamental purpose (providing for people's retirements) be scrutinised/punished?

It's one thing to say that super funds are about more than just funding retirement. It's quite another to remove requirements that are supposed to ensure that a retirement investment vehicle is actually performing its fundamental purpose.

It would surprise me if so much as one line of the act was put in place to benefit the workers.

The industry VS retail comparison is so stark (and has been for decades) that only a fool could argue whatever the industry funds are doing needs more regulation and oversight for anything other than political interference.

 

[Caesar]

The industry VS retail comparison is so stark (and has been for decades) that only a fool could argue whatever the industry funds are doing needs more regulation and oversight for anything other than political interference.

you are avoiding my question

nothing you have said explains why measures that

• force funds to justify non-investment activities to their members and
• penalise funds which financially underperform

need to be rolled back

 

[William Wonka]

you are avoiding my question

If I were to tie yu up for the purpose of torturing yu with a pair of tinsnips and the police come to your rescue you don't say "hang on, hang on- that knot on my foot really looks like it might do a good job stopping my shoelaces coming loose" now do yu?

 

[Caesar]

If I were to tie yu up for the purpose of torturing yu with a pair of tinsnips and the police come to your rescue you don't say "hang on, hang on- that knot on my foot really looks like it might do a good job stopping my shoelaces coming loose" now do yu?

your capitulation is noted

 

[William Wonka]

your capitulation is noted

Do analogies confuse yu friend?
I apologise.

I mistook yur questioning for impotent passive aggression rather than genuine ignorance and incomprehension.

 

[Chief]

Guys. Enough.

 

[QuietB]

My understanding without reading a word of the article or knowing anything about the changes would be;

1/ Morrison and Frydo tried to change the Super rules to weaken/disadvantage industry super

2/ Labor are winding this back

If Industry Super does not perform - or any other super for that matter - people can move. And the entire industry is still massively regulated - and Labor - unlike the LNP - are 100% committed to Super.

 

[Power Raid]

If people wish to move their super to a retail fund they can do this too.



Operating the industry superfunds (which have always outperformed retail super funds by a country mile) provides income for the Unions which the LNP hates.
However it's the massive investment clout that the industry funds now have that they really despise.
This gives the Unions the power to invest in ethical, equitable and sustainable investments that benefit members and society as a whole.

Whereas the Banks funds will happily sink every penny into a balanced mix of 'United Slave holdings' 'XNCT Tobacco and Asbestos pty ltd' 'Puppy torturers Inc' and 'Nippon Whale meat supplies' if it would get squeeze an extra .01cent for their balance sheet.

1) employees should be allowed to contribute to unions
2) unions are free to charge a management fee on super funds, as they see fit and pocket what they like............and spend it how they like.........on whore, union kick backs or lobbying.

what they shouldn't be allowed to do is use funds for any other purpose than making investments for retirement.

There is a small difference in outcome other then proper purpose and tax.

 

[William Wonka]

1) employees should be allowed to contribute to unions
2) unions are free to charge a management fee on super funds, as they see fit and pocket what they like............and spend it how they like.........on whore, union kick backs or lobbying.

what they shouldn't be allowed to do is use funds for any other purpose than making investments for retirement.

There is a small difference in outcome other then proper purpose and tax.

So the only issue you have is funds being ethically invested?

 

[Power Raid]

So the only issue you have is funds being ethically invested?

it is more than that

super funds are set up to achieve a savings balance for retirement and to remove the burden off the public purse. Further the investment structure carries tax privileges, to assist in achieving this outcome.

If the manager can syphon funds for purposes other than building a retirement nest egg, why shouldn't the beneficiary of the fund be allow to use the funds for other purposes as well?

If the fund wants to throw money at "other ventures", just increase the management fee and use this cream. The preservation of retirement funding is important, especially when most investees do not pay attention to their super and trust the manager is investing for their retirement.

 

[Chief]

penalise funds which financially underperform

What other class of investments gets penalised like this?

Why should investors pay double for bad performance? Penalties would just come out of their money wouldn't they?

It seems like the LNP were all for "the market" unless it was the wrong people succeeding in the market. Then they wanted government regulation to hobble those people.

I don't know much about it, but from what I recall it was just a bunch of rules to get at industry super funds.

I don't have a problem with funds having to itemise political activities and donations. Why then did the LNP constantly dilute transparency rules like donation reporting for political parties and candidates? Why were they always late in filing their reports?

I do not trust the LNP across the board. Happy for Labor rip up any "reforms" like this.

I might read up more on the pros and cons.

 

[William Wonka]

it is more than that

super funds are set up to achieve a savings balance for retirement and to remove the burden off the public purse. Further the investment structure carries tax privileges, to assist in achieving this outcome.

If the manager can syphon funds for purposes other than building a retirement nest egg, why shouldn't the beneficiary of the fund be allow to use the funds for other purposes as well?

If the fund wants to throw money at "other ventures", just increase the management fee and use this cream. The preservation of retirement funding is important, especially when most investees do not pay attention to their super and trust the manager is investing for their retirement.

There can be no dispute industry super funds consistantly outperform retail ones by no small margin.

Why not force the retail ones to operate in the same manner the industry ones do if preservation of retirement funding is the goal?