Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022

Administered by Department of the Treasury

Legislation au F2022L01046 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Assistant Treasurer and Minister for Financial Services

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022

The Superannuation Industry (Supervision) Act 1993 (the Act) governs the prudent management of superannuation funds and the supervision by the Australian Prudential Regulatory Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Commissioner of Taxation.  

Section 353 of the Act allows the Governor-General to make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022 (the Regulations) is to amend the Superannuation Industry (Supervision) Regulations 1994 (the Principal Regulations) to defer the application date of the annual performance test to trustee-directed products for 12 months to 1 July 2023.

Under the Principal Regulations the performance test applies in relation to MySuper products on and after 1 July 2021 and in relation to trustee-directed products on and after 1 July 2022.

The application of the annual performance test to trustee-directed products requires amendments to the Principal Regulations to clarify how the test will apply to trustee-directed products. The deferral allows extra time for public consultation of these amendments.

As this is a minor and technical amendment, public consultation on the Regulations was not undertaken.

Details of the Regulations are set out in Attachment A.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations commenced on the day after they were registered on the Federal Register of Legislation.

Regulation Impact Statement

The ‘Superannuation Reform—Your Future, Your Super’ measure announced in the 2020-21 Budget is estimated to have a total regulatory impact of $5.1 million per year on business and individuals.

The Productivity Commission’s report, Superannuation: Assessing Efficiency and Competitiveness, has been certified as a process and analysis equivalent to a Regulation Impact Statement for the purposes of the Government decision to implement this measure (OBPR22-02634). The report can be accessed through the Australian Parliament House website.[1]

A Statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022

Section 1 – Name of Regulations

This section provides that the name of the regulations is the Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022 (the Regulations).

Section 2 – Commencement

Schedule 1 to the Regulations commence on the day after the instrument is registered on the Federal Register of Legislation.

Section 3 – Authority

The Regulations are made under the Superannuation Industry (Supervision) Act 1993 (the Act).

Section 4 – Schedule

This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in the Schedule to this instrument has effect according to its terms.

Schedule 1 – Amendments

 

Item 1– Amendment to the application date

 

Division 14.27 of the Principal Regulations set out the application and transitional rules for the performance test. Item 1 amends paragraph 14.28(1)(b) of the Principal Regulations to change the application date so that the amendments relating to performance test apply in relation to trustee-directed products on and after 1 July 2023.

 

 

 

 

 

 

 

 

 

 

 

 

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022 (the Regulations) is to amend the Superannuation Industry (Supervision) Regulations 1994 (the Principal Regulations) to defer the application date of the annual performance test to trustee-directed products (a class of Part 6A product) for 12 months to 1 July 2023.

Division 14.27 of the Principal Regulations set out the application and transitional rules for the performance test. Item 1 amends paragraph 14.28(1)(b) of the Principal Regulations to change the application date so that the amendments relating to performance test and the comparison tool apply in relation to trustee-directed products on and after 1 July 2023.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

 

[1] https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22publications%2Ftabledpapers%2F44ff06bb-45c2-48fc-935e-0b84a2bfd6cb%22

Overview

The Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022 were enacted to amend the Superannuation Industry (Supervision) Regulations 1994. These amendments were introduced to address underperformance in superannuation funds, specifically by deferring the application date of the annual performance test for trustee-directed products by 12 months, to 1 July 2023. This delay aims to provide additional time for public consultation on the amendments necessary to clarify how the performance test will apply to these products. The regulations were made under the authority of the Superannuation Industry (Supervision) Act 1993 and were introduced by the Parliament of Australia, with a policy objective of improving the efficiency and competitiveness of the superannuation industry. The amendments were designed to ensure that superannuation funds are managed prudently and that there is adequate supervision by relevant authorities such as APRA, ASIC, and the Commissioner of Taxation.

Scope and Application

The Superannuation Industry (Supervision) Act 1993, as amended by the Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022, applies to superannuation funds within Australia, overseen by the Australian Prudential Regulatory Authority (APRA), the Australian Securities and Investments Commission (ASIC), and the Commissioner of Taxation. This legislation mandates the prudent management of superannuation funds and the supervision of entities involved in their management. The Act applies to all superannuation funds, trustees, responsible entities, and related financial intermediaries, including financial advisers and product issuers, ensuring they adhere to the prescribed standards for the efficient and effective operation of superannuation funds. Geographically, the Act operates across the Commonwealth of Australia, governing all superannuation activities within the nation. However, the Act does not explicitly state exclusions, exemptions, or specific thresholds. Instead, it relies on subordinate instruments to provide detailed guidance on the application of the Act, which may include further clarifications or exceptions relevant to specific entities or conduct. These subordinate instruments are instrumental in extending or restricting the application of the Act as necessary to achieve its overarching goals.

Key Provisions

The Superannuation Industry (Supervision) Amendment (Your Future, Your Super—Addressing Underperformance in Superannuation) Regulations 2022 (Regulations) amend the Superannuation Industry (Supervision) Regulations 1994 (Principal Regulations) to defer the application date of the annual performance test to trustee-directed products. Under the Principal Regulations, the performance test applies to MySuper products from 1 July 2021 and to trustee-directed products from 1 July 2022. The Regulations amend the Principal Regulations so that the performance test will apply to trustee-directed products from 1 July 2023 instead (Section 4, Schedule 1, Item 1). This change aims to provide additional time for public consultation and clarification on how the performance test will apply to trustee-directed products. The Regulations are made under Section 353 of the Superannuation Industry (Supervision) Act 1993, which allows the Governor-General to make regulations necessary for carrying out or giving effect to the Act (Section 3). The Regulations impose certain obligations on trustees of superannuation funds. Trustees must now ensure that their trustee-directed products comply with the performance test from 1 July 2023, instead of 1 July 2022, as originally scheduled. This involves meeting the performance benchmarks set by the Australian Prudential Regulatory Authority (APRA) and ensuring that their products meet the required standards for performance and comparison against other products. Trustees are required to provide necessary disclosures and information to members about the performance of their products. Additionally, trustees need to implement any changes to their product structures or investment strategies to align with the new test requirements by the revised date. There are no specific offences or penalties outlined in the Regulations themselves for non-compliance with the deferred application date. However, trustees and superannuation funds that fail to comply with the performance test requirements after 1 July 2023 could face regulatory action under the Superannuation Industry (Supervision) Act 1993. Penalties for breaches of the Act can include fines and, in severe cases, disqualification of trustees. APRA, ASIC, and the Commissioner of Taxation have the authority to take enforcement actions against non-compliant trustees or funds. The maximum penalties for breaches of the Act can vary, but they may include substantial fines, making it crucial for trustees to adhere to the regulatory requirements.

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Superannuation Law
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.