Superannuation regulation in Australia

How is superannuation regulated?

The superannuation sector is highly regulated. The super sector is regulated by The Australian Taxation Office (ATO), Australian Securities and Investment Commission (ASIC) and The Australian Prudential Regulation Authority (APRA).

In a bit more detail, all super funds operate under two acts of parliament. These are the Superannuation Industry (Supervision) Act 1993 and the Financial Services Reform Act 2002. Employer contributions made to their employee's superannuation fund are regulated by the Superannuation Guarantee (Administration) Act 1992.

Superannuation rules you should know about as an employee

If you're a member of a super fund, here's what rules you should be aware of.

• Your employer is legally required to pay you super (this is called the super guarantee) on your annual earnings. They should pay this at least 4 times a year.
• You're entitled to super even if you're a casual worker or you're on a low income.
• You're allowed to choose your own super fund, and aren't required to join your employer's preferred fund.
• When you change jobs, you're entitled to keep your existing super fund and aren't required to open a new one if you don't want to.
• You're allowed to make extra contributions to your super if you'd like to, although there are annual caps on this.
• You're entitled to change your super fund at any time.

Super fund trustees must conform to strict rules

If you're a member of a superannuation fund, you can rest assured knowing the fund's trustee is bound by law to always make decisions in the best interest of all fund members. This includes investment decisions and decisions around fund spending and advertising.

There will be a trust deed that outlines the fund rules that the trustee must also comply with, as well as the above legislation. If the trustee fails to properly carry out their obligations in any way, they may be penalised or even removed from their office as trustee.

Regulatory bodies governing super in Australia

There are three main bodies that regulate Australian super funds to ensure that they comply with the relevant legislation. These regulatory bodies are:

The Australian Taxation Office (ATO)

The ATO has the responsibility of ensuring the correct taxation is applied to all superannuation savings and contributions. It's also responsible for keeping track of lost superannuation accounts.

The ATO is also the main regulator of SMSFs.

The Australian Securities and Investments Commission (ASIC)

ASIC's role is to protect consumer rights in the financial services sector, including superannuation. It enforces the Corporations Act 2001 which regulates the conduct and disclosure obligations of superannuation trustees to their fund members. It also ensures trustees make investment decisions in a fair and transparent way.

The Australian Prudential Regulation Authority (APRA)

APRA is tasked with supervising regulated superannuation funds (other than SMSFs). It reviews each fund's compliance with the Superannuation Industry (Supervision) Act, ensuring that those funds are prudently managed at all times.

APRA also reviews the default MySuper products offered by super funds and names and shames those which are underperforming.

Where to go for help with your super

There are different option to get help, depending on what you need help with.

Apply for early super access

The Department of Human Services (DHS) is responsible for the administration of applications from superannuation fund members for the early release of super on compassionate grounds.

Lodge a complaint about your fund

The Australian Financial Complaints Authority (AFCA) is an independent dispute resolution body. It offers a free and easily accessible alternative to the court system. It can deal with complaints about various financial products, services and providers including super funds.

Report unpaid super

If you believe your employer hasn't paid you super, hasn't paid you the correct amount of super, has paid your super late or paid it into the wrong fund you can report it to the ATO.

Find lost super

The ATO can help you find any lost super in your name, which you can do via your myGov account online. Super funds need to tell the ATO when they have 'lost' members, so if you're one of them the ATO should know about it.

Dispute a superannuation death benefit

Super funds are legally required to pay out super to the member's listed superannuation beneficiary. If you believe a super death payment has been issued incorrectly, or you wish to dispute this, you can get a lawyer or solicitor (or speak with the fund trustees directly). The ATO doesn't regulate the payment of super death benefits.

The two acts of parliament overseeing superannuation in Australia

1. Superannuation Industry (Supervision) Act 1993

This is the key piece of legislation that outlines how superannuation funds can operate. It sets out:

Trustee responsibilities

• To act honestly in all matters
• To exercise the same degree of care, skill and diligence as an ordinary prudent person would exercise when investing money
• To keep the fund's assets separate from other assets
• To act in the best interests of fund members
• To develop and implement an investment strategy
• To ensure sufficient reserves to pay member’s benefits
• To provide fund members with access to certain information

Record-keeping responsibilities

• An accurate account or documentation should be provided at all times
• Make sure that all accounts are accurate and properly noted
• Keep records of meetings and agendas that have transpired among trustees
• Lodge an annual return to APRA
• Get the accounts and audited every year

Investment strategies

Under this category, the Superannuation Industry Act advises the trustee to consider:

• The risks and returns of all investments after formulating the objectives and strategies of the funds
• The mix of investments included in the fund's portfolio
• The fund's cash flow requirements
• The need for the fund to meet any current or potential future liabilities

2. The Financial Services Reform Act 2002

This Act has a broad scope and aims to provide the finance industry with a certain level of standardisation. It determines that a superannuation fund trustee must be licensed before being allowed to operate a fund. In short, the Financial Services Reform Act 2002 performs the following roles:

• The provision for licensing of individuals who provide financial services or products, known as "dealers".
• Establishes a standard of conduct for financial services providers, including what constitutes misconduct in regards to the management of superannuation funds.
• Oversees training programs for agents who represent dealers.
• Sets out the level of information that must be provided on financial products sent to fund members and prospective fund members.

Written by

William Eve

Group publisher

Willam Eve is the country manager for Finder's Canada operations. He has previously held the positions of group publisher of insurance for Finder Australia and lead publisher for the Finder global team. William has a Bachelor of Communications from the University of Technology Sydney, Australia. He loves the challenge of launching Finder into new markets while helping grow Finder’s global team. See full bio

Co-written by

Alison Banney

Editor

Alison Banney is the money editorial manager at Finder. She covers all areas of personal finance, and her areas of expertise are superannuation, banking and saving. She has written about finance for 10 years, having previously worked at Westpac and written for several other major banks and super funds. See full bio

Alison's expertise

Alison has written 652 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living