The Bill to implement the MySuper reforms was introduced to Parliament last week.
The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 contained very few changes from the original Exposure Draft, released for consultation in September.
Among the minor tweaks were:
- An expansion of the definition of a ‘large employer’
- An expansion of the definition of the ‘lifecycle exception’, designed to aid the provision of age or segment based investment strategies
The current version of the Bill has also extended the rules relating to the administration fee. The amendment now reads:
An administration fee is a fee that relates to the administration or operation of the fund and includes costs incurred by the trustee, or the trustees, of the fund (that are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee or an activity fee).
The Explanatory Memorandum issued with the Bill also provides more detail regarding the application of an administration fee:
A member may be charged an administration fee for purposes that relate to the administration and operation of the fund. An administration fee may include, but is not limited to, recovering costs of:
- Processing contributions and dealing with employer-sponsors
- Providing member communication (for example, call centres)
- Administration of the trustee office
- Levies required to be paid to APRA
- Product development
- Overheads, including accommodation and information technology
- Intra-fund advice (to be defined in more detail in a later tranche of legislation)
The Government says regulations relating to insurance associated with MySuper products will be provided in a later tranche of legislation, but has clarified that while insurance premiums are not described as a ‘permitted fee’ it is not the intention of the legislation to prevent an RSE licensee from deducting an amount that reflects the premium that is attributable to each member.
The Bill is currently before the House of Representatives awaiting debate.
