SUPERCentral's Communique on the Communique of Superannuation Principles

What’s it all about, Alfie?   It’s hard to know.  Possibly it is about questions such as:

• When should benefits be accessed?
• In what manner should benefits be paid?  Should benefits only be taken as pensions?
• Should certain types of investments be made off limits for superannuation?
• Should there be gearing in relation to superannuation investments?
• Who should be permitted to advise in relation to superannuation?
• Should accountants without financial planning qualifications be permitted to even discuss superannuation?
• Should fund managers be prevented from owning distribution channels (ie financial planning organisations)?
• When is a superannuation adviser independent?
• What qualifications should superannuation advisers be required to have?
• Should fund managers be prevented from paying trailing commissions?
• Should super funds be required to invest in certain worthy investments?
• Should super funds be precluded from investing offshore?
• Who should audit superannuation funds?
• What should happen to super trustees who do the wrong thing?
• What should be done about employers failing to discharge their superannuation contribution obligations?
• What should be done about the many lost super accounts?
• What should be done about super investors who have 2 or 3 super accounts?
• Should there be a maximum amount of fees which can be charged to super accounts?

The list of possible issues could be extended for some time.

However, at this early stage of the Communiqué Review, a number of observations can be made:

• There has been speculation that the Review is primarily about adviser remuneration practices in the superannuation industry; in particular about commissions – both front end and trail commissions, and there is good reason to think that this is a major cause of the review.
• It is interesting to note that of various “peak” superannuation bodies named as supporting the Communiqué, no accounting professional organisation is mentioned.
• The review will necessarily also deal with self managed superannuation funds as this segment of the superannuation industry constitutes (in approximate terms) 25% of the super assets and has about 700,000 super investors.

There is always change in super.