NEWS
Will Govt’s YFYS legislation force a cull of superannuation associations?
Significant danger in lack of YFYS detail BY MIKE TAYLOR
The Federal Government is finding itself under increasing pressure from all segments of the superannuation industry over its failure to provide sufficient detail around its Your Future, Your Super legislation, particularly the super fund performance test. The Senate Economics Legislation Committee has heard from virtually all parties that it is almost impossible to determine what the new regime will look like in the absence of the Government providing the fine detail of its regulations. The committee has been told by a range of parties, including Mercer, that implementation of the legislation needs to be delayed beyond 1 July, this year, and that a significant consultation period will be needed once the regulations are ultimately released. Mercer senior partner and superannuation specialist, Dr David Knox, said the new arrangements would place increased responsibility and pressure on employers who would be left unprepared under the current legislative timetable. “Employers need to be given time and the 1 July start date is impractical,” Knox told the committee’s hearings. Both Mercer and the McKell Institute also warned that the super fund performance test would risk driving down superannuation funds as fund trustees became more conservative and limited the range of investments they were prepared to pursue. As well, the McKell Institute argued that any performance test which excluded the impact of fees risked distorting the market.
Major superannuation industry organisations may find themselves suffering collateral damage from the Government’s new Your Future, Your Superannuation (YFYS) with funds being asked to justify the payment of large membership fees. There are three significant industry associations representing the superannuation industry with the two organisations expected to be the most exposed being the Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (AIST). ASFA represents a cross-section of superannuation funds, while the AIST is regarded as mostly representing industry and profit to member superannuation entities. The acting chairman of the committee hearings reviewing the YFYS legislation, NSW Liberal backbencher, Senator Andrew Bragg, specifically challenged superannuation funds and others giving evidence about the industry organisations in which they held membership. Bragg also queried whether there were too many organisations seeking to represent the superannuation industry. Later, answering a query from Super Review, Bragg said the current situation of half a dozen industry organisations seeking to represent the industry was “intolerable and unsustainable”. When the question of how many associations were active in seeking to represent the superannuation industry, the AMP representative acknowledged that “some consolidation would be sensible”. The committee hearing heard from the Financial Services Council (FSC) that in terms of the proposed new legislative arrangements around members’ best financial interests, it was possible that superannuation funds could be challenged on whether their membership of particular industry associations was delivering members value for money. The FSC deputy chief executive, Blake Briggs, said that the FSC would be comfortable with that sort of scrutiny with respect to its superannuation fund members.
IFM Investor’s firms boost renewable energy investment BY JASSMYN GOH
Institutional fund manager IFM Investors-owned companies Buckeye Partners and Nala Renewables have together acquired a majority ownership in clean energy development investment platform Swift Current Energy. The acquisition, an announcement by Buckeye and Nala said, would allow the firms to invest in a renewable energy platform that aligned with their priorities and further participate in energy transition. Buckeye president and chief executive, Clark Smith, said: “This strategic partnership offers an exciting opportunity to further advance critical renewable energy generation and storage development projects across the United States while growing this platform”. Nala incoming chief executive, Jasandra Nyker, said she saw North America as a dynamic and growing segment of the global renewable energy landscape. Buckeye was a wholly owned investment of the IFM Global Infrastructure fund based in Houston, Texas; Nala was a joint venture between Trafigura and IFM Investors based in Geneva, Switzerland; and Swift was headquartered in Boston, Massachusetts. 6 | Super Review
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