Super fund representatives as well as independent economists, academics and investment advisers will come together to evaluate the Your Future, Your Super (YFYS) performance test as members of a new technical working group.
The federal government has confirmed that the 12-member working group — which forms part of its review of YFYS laws — will work alongside Treasury and will deliberate on increasing accountability for the performance of products that fall under the YFYS measures.
“The experts who’ve agreed to be part of the technical working group on the performance test will form an important part of Treasury’s considerations during the review process,” said Assistant Treasurer Stephen Jones.
“The government thanks them for their time and expertise, which they are offering on a voluntary basis and in the interests of strengthening the superannuation system.”
According to the government, the working group is expected to be a forum for “constructive, solutions‑based discussions” on specific technical issues relating to the performance test.
Its members include representatives from both retail and not‑for‑profit super funds including Leigh Gavin from AustralianSuper, Jacki Ellis from Aware Super, Damian Lillicrap from Australian Retirement Trust and Fahmi Hosain from Future Super.
Other members include David Bell from the Conexus Institute, Dr Kevin Liu from UNSW, Joey Moloney from the Grattan Institute, Matthew Griffith from JANA Investment Advisers, Zachary May from IFM Investors, Aidan Geysen from Vanguard and David Knox from Mercer.
“We owe it to every super fund member to make sure their super contributions are working as hard as they are,” said Mr Jones.
Earlier this month, the government released a consultation paper to seek feedback on any unintended consequences and implementation issues arising from the YFYS laws.
KPMG recently noted that a number of challenges have arisen since the YFYS performance test was introduced last year, particularly for small to medium funds needing a merger partner.
According to KPMG Australia partner, actuarial & financial risk, Platon Chris, funds that have already undertaken significant mergers or reached ‘mega fund’ status may not be looking to be involved in additional mergers.
“Recent large fund mergers are likely to focus on getting the strategy, integration and operating models in place before they can be in a position to enter additional agreements with new funds. Equally, the more stable mega funds can become more selective about how they grow their funds and the opportunities they pursue,” he said.
“This could leave the small to medium funds in need of a merger partner with fewer and fewer opportunities, and ultimately at the detriment to those members still within these funds.”
