Senator Nick Sherry, Minister for Superannuation and Corporate Law, today announced regulatory changes that will require superannuation funds to report long-term returns prominently in member statements.
Specifically, super funds will be required to disclose five and ten year returns in periodic member statements to help retail investors better understand their super.
"It is important that super fund members appreciate that super is a long-term investment."
"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," Minister Sherry said.
The regulatory changes, which have already been the subject of extensive, targeted consultation with all parts of the superannuation industry, would require super funds to disclose five and ten 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," Minister Sherry said.
In line with the 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," Minister Sherry said.
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.
Corporations Amendment Regulations 2009 (No.3) can be accessed at: www.frli.gov.au