It is often said, “Take care of the big issues and the smaller ones will fix themselves.” The role of the superannuation pool in the economy and the evolution of the super system are clearly complex and important conversations to start now and continue over the longer term. Much information (for example the ASFA White paper on evolving the system) contributes to the depth and effectiveness of these conversations. When we embark on these conversations we need to have regard to the environment both now and in the future.
But there is another conversation that is going on at this time, and that is the challenge of the implementation of Stronger Super and FOFA regulatory reform. Many of you will immediately cease reading this article on the basis that such a conversation is too technical and detailed or just not sexy enough.
I have news for you – implementation is a hot issue! It is filling the minds, the time and devouring resources across the industry. We have so much to implement, in so little time and without a full picture of the regulatory framework, that nervousness pervades our daily lives. ASFA recently embarked on an exercise to centralise and document all the implementation issues across Stronger Super (ASFA does this work so that the industry does not waste member’s money by duplicating non-competitive activities).
We came up with three tables. The first table outlines issues that need an adjusted policy setting because the regulatory outcome is unworkable - there are 13 of those. The second table outlines gaps or mistakes in the legalisation - there are also 13 of those. The third table outlines all the issues where there is interpretive confusion or the need for further guidance – again the magic number is 13. We of course have outlined what the solution is and which body or regulator should fix it. The fixes fall on the shoulders of ASIC, APRA, Treasury, parliament and the ATO. Often it needs two bodies or two regulators to fix an issue.
The tables reflect a point in time and the list grows weekly as funds and super providers implement and engage with the detail, and as such the tables will change and in the end hopefully disappear.
What we have asked for and what we need is a pragmatic and open approach to implementation by regulators. We have called on all of them to provide written public statements so that the industry can manage costs as well as risks. There are different implementation issues across disclosure, SuperStream, data collection and MySuper and in many cases there are good reasons to delay implementation based on risk alone.
This cry is not about shirking our responsibility to fund members: this cry is about being able to implement with the best interest of members in mind, not a regulatory stick!
But there is a silver lining. We have seen a level of collaboration across the industry that is unprecedented and I have no doubt that this collaboration will be built upon over the coming months and years.
Pauline Vamos is Chief Executive Officer of the Association of Superannuation Funds of Australia (ASFA).