ASIC shelves report into industry fund incentives

Following questioning by senator Andrew Bragg in a recent hearing of the parliamentary joint committee on corporations and financial services, ASIC submitted a response on notice around the progress of Report 529, which proposed to focus on the role of employers in super.

“We understand the senator is referring to the Employers and Superannuation Project, flagged in ASIC Report 529 (the Project),” ASIC said.

“ASIC decided not to release a public report on the Project primarily because the demands of other work forced the superannuation team to narrow the Project’s scope.”

The regulator said it had released significant detail into the investigation’s findings through other means, including its submissions to the royal commission’s super hearings and input into law reform of section 68A of the SIS Act, which prohibits trustees from using goods or services to influence employers to nominate a default super fund.

The issue of super fund inducements to employers was raised at the royal commission, which heard industry fund Hostplus had spent around $260,000 on Australian Open tickets for 120 employers, as well as $40,000 on AFL tickets, some of which were also distributed to employer representatives.

During the inquiry’s super hearing, Hostplus chief executive David Elia had conceded that “the battle is all about retention of default super fund status” among large funds in the super sector, but maintained the fund’s employer hospitality efforts were “done for the right purposes”.

ASIC said it had also released an information sheet in mid-2019 reminding trustees that “using improper inducements to influence employers in their choice of default fund is illegal”, as well as distributing communications to payroll, transaction and business software industry groups and bodies.