AMP LOSES DEFAULT KIWISAVER MANDATE

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News

www.fssuper.com.au

Volume 13 Issue 02 | 2021

Statewide not contesting ASIC charges

The $10.8 billion industry fund will not contest ASIC’s March allegations against the fund regarding administration of group insurance policies.

On March 4, the corporate regulator commenced civil penalty proceedings against Statewide alleging it had been misleading or deceptive in its correspondence with members for about three years between May 2017 and June 2020.

Statewide filed its response to ASIC’s claims on May 7.

“In the circumstances, Statewide Super considers that your interests, as a member, are best advanced by not contesting the allegations,” it told members in a statement.

Statewide’s letter to members referred to the incident as a “selfreported insurance administration error”.

However, ASIC’s March 4 allegations said although Statewide became aware of the mischarging in May 2018, it did not notify members, nor did it act to prevent the premiums being charged again.

In doing so, ASIC says, Statewide breached its obligations as an AFSL holder. It is also accused the fund of breaching its obligation to report such breaches to ASIC within 10 days.

The matter relates to the fund sending annual statements and warning letters to about 12,500 members detailing their insurance cover at a time when they did not have cover under a Statewide insurance policy.

The regulator also alleged the fund deducted insurance premiums to the tune of $1.5 million from the super accounts of 1300 members who did not hold cover. fs The quote

For too long Australian women have paid the ‘motherhood penalty’ for the time they take out of the workforce to care for children.

Super funds slam budget’s gender gap measures

Kanika Sood

Superannuation funds welcomed the budget’s move to dump the $450 threshold, but called out a lack of measures to close the super gap.

The May 11 budget included five key decisions on superannuation.

These were abolishing the $450 per month income threshold to receive superannuation guarantee contributions, abolishing the work test for voluntary super contributions for 67 to 74 yearolds, lowering the downsizer contribution age limit to 60 from 65, providing a two-year amnesty for exiting legacy retirement products, relaxing residency requirements for SMSFs and small APRA-regulated super funds.

However, it was quiet on increasing Commonwealth Rent Assistance, and on requiring employers to pay SG on parental leave.

“HESTA has been calling for the scrapping of the unfair $450 super threshold for more than 10 years so it’s pleasing the government has taken this long overdue step as it will help improve financial security for women and the lower paid,” HESTA chief executive Debby Blakey said.

“However, the fact that super continues not to be paid on parental leave remains a glaring gap in our super system.

“For too long Australian women have paid the ‘motherhood penalty’ for the time they take out of the workforce to care for children. More needs to be done to improve their retirement outcomes. Paying super on paid parental leave is an easy and obvious fix.”

The Actuaries Institute said the budget had not leveraged the Retirement Income Review report’s findings.

“…such as measures to help nonhomeowners (renters) in retirement, in particular some of the most at risk of poverty in retirement – single female renters,” the Actuaries Institute said. fs

AMP loses default KiwiSaver mandate

Elizabeth McArthur

The New Zealand government’s review of default KiwiSaver providers has resulted in AMP not being reappointed.

New Zealand’s default retirement savings scheme KiwiSaver works by having a network of default providers which manage client money in balanced funds.

Under an overhaul of the default provider scheme aimed at slashing fees and improving returns, the number of default providers was cut from nine to six.

This resulted in AMP, ANZ and ASB being cut.

Bank of New Zealand, Booster, BT Funds Management, Kiwi Wealth, Simplicity and Smartshares retained their mandates.

AMP Wealth Management chief executive Blair Vernon said he was disappointed to not be reappointed as a default KiwiSaver provider.

“Our current default portfolio represents less than 7% of our total assets under management and around 3.5% of total revenue so this decision doesn’t have a major impact on our business or our commitment to KiwiSaver,” he said.

“We continue to invest extensively in the ongoing strengthening of our offer to clients and focus on supporting them to achieve a great retirement.”

Currently, AMP is “renovating” its KiwiSaver scheme after appointing BlackRock as key investment manager.

New Zealand finance minister Grant Robertson and consumer affairs minister David Clark said the changes were made to provide KiwiSaver account holders with better bang for their buck.

“The six default providers were selected because they offer the best value for money for their members in terms of lower fees and higher levels of service,” Clark said.

Robertson added that the New Zealand government wants to see default funds invest responsibly.

“We know many Kiwis care about where their money is invested, so we are excluding any investments in fossil fuel production," he said. "This reflects the government’s commitment to addressing the impacts of climate change and transitioning to a low emissions economy." fs