The Super Members Council (SMC) has joined other industry voices in calling for SMSFs to be excluded from the Compensation Scheme of Last Resort (CSLR) funding levy, but qualified its stance as to how this approach should operate.
The SMC has previously stated members of Australian Prudential Regulation Authority (APRA)-regulated superannuation funds should not have to provide monetary support to the scheme. Consistent with that principle, the council’s view is SMSFs should be similarly excluded from the levy and the CSLR or if included, should be required to adhere to mandatory and universal participation in funding the scheme without a choice to opt in or out.
In a statement, the council said both kinds of members must be treated equally.
“It would be deeply unjust for the government to compulsorily force millions of the nation’s lowest-paid workers to pay a levy for this scheme they will never claim on, but then give wealthier Australians with SMSFs a choice to opt in or opt out that no one else gets,” SMC chief executive Misha Schubert said.
The SMC argued it would be unfair to force members of APRA-regulated superannuation funds to pay any kind of contribution to the levy as members are some of the lowest-paid workers in Australia.
The superannuation body also pointed out a key design principle of the scheme was that the sectors of the financial system from which the consumer harms and unpaid compensation orders had arisen should bear the costs of funding it.
Further, it suggested expanding the levy to unrelated sectors not responsible for product collapses like Shield and First Guardian would therefore be a breach of that initial principle.
“The scheme is now being flooded by a tsunami of compensation bills that should have been paid by the collapsed firms and schemes who lost Australians’ life savings and then left them in the lurch,” Schubert noted.
The SMC’s position is in line with that of the Association of Superannuation Funds of Australia, which is also arguing any levy should not be extended to sectors not responsible for breaches and that if it were to occur, it should be done in a uniform manner.
