The SMSF Association has made three clear recommendations in its submission to Treasury regarding the policy of enshrining the objective of superannuation into law, including having the relevant bill be a stand-alone piece of legislation.
The peak industry body suggested the objective be clear and self-contained with unambiguous definitions, operative and interpretive provisions.
Further, the association stipulated the objective be applied exclusively in the context of policy design and implementation only so it will not affect the operation of existing laws.
To this end, it stated: “This ensures it does not extend beyond this remit to other stakeholders such as regulators or superannuation trustees and does not change the operation or interpretation of existing superannuation law, prudential standards or governing rules of superannuation entities.”
The submission was critical of the process being performed without consideration for the two other pillars of the retirement ecosystem, being aged care and housing security.
“What is proposed is an objective which focuses on a single element of the retirement income system. While the explanatory materials acknowledge three retirement income pillars, the broader retirement system (including aged care and housing security, addressed by the Retirement Income Review) are not contemplated in the operation of the objective of superannuation,” it said.
In addition, the superannuation body warned the objective should not facilitate more amendments to the retirement savings system and noted expanding the concept of sustainability beyond just taxation and fiscal consideration would help avoid this unwanted outcome.
Finally, it stressed the importance for the requirement to provide a statement of compatibility for future bills and regulations to be applied in a manner that prevents it from being a mere formality.
“We note that objective will require a statement of compatibility that includes an assessment of whether a bill or regulations are compatible with the objective of superannuation. For transparency, it is integral that a genuine assessment is made and included within the statement of compatibility to the respective bill,” it pointed out.
“The underlying policy need must be clearly articulated and supported alongside considered analysis on how it satisfies the objective of superannuation. This includes the publication of all relevant data and modelling.
“Standardised or templated responses such as those used for the statement of compatibility with human rights must be prohibited.”
The Institute of Financial Professionals Australia recently confirmed it is opposed to having the objective of superannuation enshrined in law.