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New super rules floated

A GOVERNMENT discussion paper has floated major changes to rules governing superannuation funds, while at the same time acknowledging that potential problems are focused on a small sub-set of funds.

The issues paper, Options for Improving the Safety of Superannuation, said Australia has 220,000 superannuation funds managing $500 billion.

The vast majority (211,000) are self-managed super funds with fewer than five members and are outside the scope of the review.

The paper found that most enforcement action is concentrated on about 1,800 corporate funds (ie sponsored by a single company) with about $2 billion in assets.

“APRA and ASIC have identified problems with these funds that relate to inadequate fund governance, insufficient competence of trustees and managers, and inappropriate or poor investment and risk management strategies,” the paper says.

Options canvassed in the issues paper include a universal licensing regime for all super funds, a power for APRA to make prudential standards, and a requirement for super funds to hold capital linked to the size of the fund.

It also proposes that super funds hold annual general meetings and make their annual financial returns publicly available.

A working group chaired by former ANZ Bank chief executive Don Mercer will hold public consultation on the issues paper.

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