Super snag for saver accounts

APRA approval mandatory

Christine St Anne

Fri 16 May 2008

Public offer superannuation funds will find it difficult to administer the Government's First Home Savers Accounts (FHSA), according to a global consultant.

Under the Government's plan, banks will be able to offer the accounts through their existing bank licences.

Public-offer funds, however, will need to establish a separate trust in order to set up a FHSA.

In its budget analysis paper, Watson Wyatt notes these funds must also seek approval from the Australian Prudential Regulation Authority before any separate trusts can be set up.

In addition, they will need to obtain a variation of their Australian Financial Services Licence from ASIC, the paper said.

"In our view, requiring superannuation fund trustees to offer these products through a separate trust, while providers such as banks can offer them through their existing structures, considerably reduces the attractiveness of these products to superannuation funds," Watson Wyatt said.

"It will be considerably difficult for public offer superannuation funds to administer these accounts," Industry Super Network economist Nick Coates said.

Coates said the funds would most likely look to offer the products through Members Equity bank.

"Similarly many retail superannuation funds would also look at offering these accounts through their aligned banking institutions," he said.