Industry foresees super funds with over 5 million members
One of Australia’s largest superannuation industry organisations has pointed to the possibility of the memberships of individual superannuation funds reaching over 5 million at the same time as urging a carve-out of funds from new on-line privacy legislation.
The Association of Superannuation Funds of Australia (ASFA) is seeking the carve-out on the basis of the significant regulatory requirements they are already required to meet but, in doing so, it also canvassed the possibility that fund mergers could result in superannuation entities with excess of 5 million members.
Urging the carve-out, the ASFA submission to the Attorney-General’s Department said that Superannuation funds are already required to comply with the Privacy Act 1988 governing how superannuation funds collect, use, disclose and provide access to member’s personal information.
“These requirements are overlayed by significant regulatory requirements to ensure funds are acting in the members’ best financial interests,” it said.
“The provision of a carve-out for superannuation funds is our preferred position and one that would negate the need for the following amendments, however in the absence of this we would propose the following changes be considered to ensure superannuation funds can continue to meet their regulatory and fiduciary obligations.”
One of the alternatives was increasing the level at which obligations would cut-in to from the current 2.5 million end users to 5 million end-users.
However, it noted: “Whilst this proposal could alleviate the problem in the short to medium term, it may still present an issue over the longer term as more funds merge and the number of members in a fund surpass 5,000,000”.
“In the absence of a carve-out for superannuation funds, we propose exempting superannuation funds from the requirements under the online Privacy Bill where there is a legislative or regulatory requirement for superannuation funds to provide personal information to a Regulator,” it said. “It should be acknowledged that superannuation funds are required to report data in an identified form when reporting to certain Government bodies, for example the Australian Taxation Office (ATO).”