Changes to benefit retail investor says Sherry
12 May 2009,
THE Minister for Superannuation and Corporate Law, Senator Nick Sherry, says changes that will require superannuation funds to report long-term returns in member statements will help retail investors better understand their super.
“It is important that super fund members appreciate that super is a long-term investment,” says Sherry.
“The past year has been a difficult one for super fund members due to the impact of the global financial crisis on returns.
“However, if fund members focus only on short-term returns, they risk switching investment options or funds to their long-term detriment.
“Clear information about medium-to-long-term returns can help fund members better appreciate that superannuation is a long-term investment.”
The regulatory changes, which have been the subject of extensive, targeted consultation with all parts of the superannuation industry, would require super funds to disclose five and 10-year returns in periodic member statements.
The measure will also require returns to be disclosed at the investment option or sub-plan level in which the member is invested; and require the long-term returns to be highlighted, positioned and presented in a manner that will attract the member’s attention.
For the upcoming reporting season 2008-09, only the five-year return would be required to be disclosed and disclosure could be made either on the periodic statement or in a separate insert which would be sent to members together with the periodic statement.
“The disclosure of long-term super fund returns in member periodic statements would assist super funds to better communicate the fund’s performance over a market cycle, including rising, falling and flat markets to their members,” says Sherry.
In line with the Rudd Government’s aim of increasing efficiencies and reducing costs for members, super funds will also be able to use a website as the default method of delivering their annual report.
“This measure will potentially save super funds thousands of dollars in printing and production costs, savings which could be passed on to members,” says Sherry.
In addition, where a member has electronic access to personal fund information and has given permission, the fund will no longer be required to provide a written or an electronic member statement.