In a submission posted last week, the Association of Superannuation Funds of Australia (ASFA) asked for amendments to the relevant prudential practice guide and expressed concerns the ‘Three business day’ requirement provision primarily targets members in existing default options and, going forward, in MySuper products.
The three-day processing requirement doesn’t recognise existing and long-standing arrangements for forward unit pricing, and will push the industry towards implementing costly daily unit pricing, further entrenching short-termism in investment decisions, according to ASFA.
The measure will also limit the scope of investment arrangements that trustees will be able to consider for MySuper products, ASFA stated.
The standards also assume that once a request has been validated by the Australian Taxation Office (ATO), the identity of the person is correct and there is no chance of fraud, ASFA stated.
ASFA said the Australian Prudential Regulation Authority’s (APRA’s) draft prudential practice guide on payment standards, SPG280, addresses some concerns but does not address funds that have forward unit pricing, the presence of family law, bankruptcy and AML/CTF suspicious matters flags, or the lodgement of the rollover request triggering a flag in the fund’s fraud control system.
ASFA requested changes to SPG280 to clarify that the obligation to transfer or rollover a benefit doesn’t commence until the trustee is in a position to effect the request.
ASFA also asked for clarity that a registrable super entity would not be in breach of its requirements when there was an inexplicable mismatch between the information on the application form and the trustee’s records, where there were other suspicious flags that require resolution, such as bankruptcy or money laundering or other fraud issues, or where funds use forward unit pricing on a less than daily basis.
