Australians of faith should have the option of choosing a super fund that invests in accordance with their beliefs.
That’s why today, in keeping with our commitment at the recent election, the Albanese Government is releasing for consultation draft legislation to adjust how faith‑based super products are treated under the Your Future, Your Super performance test.
The previous Government introduced performance benchmarks which did not take into account the design of these faith‑based superannuation funds. There are a small number of funds established to invest members money in a manner consistent with their religious principles. This may preclude investment in gambling, alcohol or armaments, for example.
Under the “two strikes” regime, this could lead to these funds being closed to new members, denying Australians of faith the option of investing their super in line with their religious beliefs.
The draft legislation will:
- require trustees to apply to APRA for faith‑based product status
- subject faith‑based products to a supplementary test that considers their faith‑based investment strategy, if they fail the original test
- exempt faith‑based products from the consequences of failure if they pass the supplementary test.
Consequential changes to the supporting regulations are under development.
The annual performance test was introduced to hold trustees accountable for the investment performance they deliver and the fees that they charge to members. These changes to the performance test seek to maintain this accountability while taking account of religious obligations.
Consultation on the exposure draft legislation and explanatory material is open until 16 August 2022.
The Government welcomes submissions from all interested parties.