Overview of the superannuation system

19.18 Superannuation, as a form of long-term saving for retirement, serves an important role and, for many Australians, is one of the most significant forms of wealth.[7] As Australia’s population ages, successive governments have introduced measures to maintain and enhance superannuation savings, largely through compulsory superannuation membership and contribution and preferential tax treatment.[8]

Superannuation legislation

19.19 There are a number of pieces of legislation and subordinate legislation that govern the operation of the superannuation system. For the purposes of examining ways in which the superannuation system as a legal framework could be improved to protect the safety of victims of family violence, the key pieces of legislation and subordinate legislation of relevance are:

  • Superannuation Act 1976 (Cth)—specifically, the provisions with respect to early access to superannuation;

  • Superannuation (Resolution of Complaints) Act 1993 (Cth) (SRC Act)—which establishes the Superannuation Complaints Tribunal;

  • Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act)—which makes provision for the prudent management of certain superannuation funds and supervision by Australian Prudential Regulatory Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Commissioner of Taxation;[9] and

  • Superannuation Industry (Supervision) Regulations 1994 (Cth) (SIS Regulations)—which articulate the grounds for early access to superannuation.

19.20 Two other pieces of legislation are also relevant for the purposes of specific issues within this chapter. First, the Family Law Act is relevant to the extent that it provides that parties may make a superannuation agreement and family court property proceedings provide a means by which court orders about spouse entitlements to superannuation may be made.

19.21 Secondly, the Financial Services Reform Act 2001 (Cth) (FSR Act) is designed to provide standardisation within the financial services industry. It is governed and administered by ASIC. Also relevant, is ASIC Regulatory Guideline 146, which provides for minimum training standards for people who provide financial product advice to retail clients.[10]

Superannuation Complaints Tribunal

19.22 The Superannuation Complaints Tribunal (SCT) was established under the Superannuation (Resolution of Complaints) Act 1993 (Cth) to deal with complaints about superannuation—specifically in the areas of regulated Superannuation Funds, annuities and deferred annuities, and Retirement Savings Accounts. The Tribunal’s jurisdiction does not, however, extend to complaints concerning self-managed superannuation funds (SMSF).

Regulatory bodies

19.23 The superannuation system is regulated by three key government agencies:

  • the Australian Taxation Office (ATO)—which administers the relevant legislation for SMSFs and assists SMSF trustees to comply with their obligations;

  • ASIC—which regulates financial services to protect consumers, including monitoring compliance with the FSR Act; and

  • APRA—the prudential regulator that regulates superannuation funds other than SMSFs, reviews compliance with the SIS Act and plays a role in early release of superannuation entitlements.[11]

19.24 Individual superannuation funds also have internal regulatory mechanisms and there are a number of superannuation peak bodies which, while not necessarily serving a regulatory function, provide funds with guidance and training.[12]

[7] Australian Government, ‘Stronger Super’: Government Response to the Super System Review (2010), 3.

[8] By 2050, almost one in four Australians will have reached retirement age, compared to one in seven today: Ibid.

[9] Superannuation Industry (Supervision) Act 1993 (Cth) s 3(1).

[10] Australian Securities and Investments Commission, Regulatory Guide 146: Licensing: Training of Financial Product Advisers (2009).

[11] The Financial System Inquiry Report of 1997 recommended, amongst other things, the establishment of a new category of small superannuation fund to be regulated by the ATO as well as the establishment of ASIC and APRA: S Wallis and others, Financial System Inquiry: Final Report (1997).

[12] Eg, the Association of Superannuation Funds of Australia and the Australian Institute of Superannuation Trustees.