Stakeholders within the financial planning, funds management and superannuation sectors have questioned Treasury's consultation process and understanding of the government's MySuper legislation.
On Friday, representatives from eight industry associations and bodies fronted a "last minute" public parliamentary hearing to discuss concerns regarding the third tranche of the government's low-cost superannuation bill.
InvestorDaily understands that industry representatives were given less than a week to prepare for the hearing, with some only notified of their hearing time 24 hours before the start of the Parliamentary Joint Committee (PJC) on Corporations and Financial Services's MySuper meeting.
Questions have also been raised over the amount of time the PJC has been given to finalise and present its MySuper bill findings to the Financial Services and Superannuation Minister Bill Shorten.
According to the PJC website, the deadline for submissions was last Wednesday, with the PJC's reporting date to government set for tomorrow.
Among those present at the hearing into the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 was FPA general manager policy and government relations Dante De Gori.
"We had no opportunity to go back to members or our committee about it. There was just no time and for me that is not satisfactory," he told InvestorDaily.
The FPA's presence at the hearing comes a week after the advice association was believed to have been overlooked by Treasury at a stakeholder meeting to discuss the MySuper bill.
"I'm a little bit disappointed because Treasury has not engaged with us on this issue at all," De Gori said.
"We have obviously provided submissions in the normal process that everyone else gets a chance to but we haven't had any additional consultation with Treasury on MySuper which we are a little bit disappointed about."
While De Gori acknowledged that the legislation is "obviously much bigger" than the MySuper bill's intra-fund advice component and fee structure - which the FPA has taken issue with - he said the FPA was "a bit disappointed from an advice perspective we weren't shown the same courtesy in participating in the consultation process".
"But in saying that, what's evident from [Friday's] hearing is that the consultation process has been not as comprehensive as it could have been. Other stakeholders have said that as well," he said.
"There is so much legislative reform happening simultaneously in our industry that it's tough even for Treasury to keep the process going, even from a consultation process. So I think we have to acknowledge that and I do.
"I appreciate that there are a larger number of issues in the MySuper space that are mainly for the super funds and the trustees and I understand that as well. But in the context of the intra-fund advice, just as important as everything else, I would have appreciated the consultation. But obviously that was acknowledged today hence the reason we were invited to the PJC. So for that I'm grateful."
De Gori said while the association presented its view on intra-fund advice, the key questions from the PJC centred on the transition element from default superannuation to MySuper.
"The reason for the concern, and what we've raised, is not the intention - and in fact everyone agrees - that all disengaged members who have been placed into a superannuation fund or an investment option of their choosing or understanding, knowledge or awareness, ie disengaged to members, should be caught in the transition and hence transferred to the MySuper option because that's what MySuper is designed to do," he said.
De Gori said the problem is in the way the legislation has been drafted. He said it has been drafted in a "much broader" than just people thrown into default options without their consent.
"The example that we've raised is the issue of wraps where the wrap accounts or the trustees select one of their investment options, generally the cash option, to be their default option," he said.
"So we're talking outside the industrial award enterprise agreement space, we're talking about where individuals have proactively gone to a financial adviser looked for a superannuation option and investment options or an individual has on their own gone to a product provider and said 'I want this superannuation fund and these investment options'.
He said if some or all of an individual's money is in an investment option that has been classified as a default option by the trustee and the member has chosen to go in there, then "even those are going to be swept in the transition because the trustee has nominated that investment option as a default".
"We believe, and if you refer back to the definition of a default member policy intention ... that the legislation has gone over and beyond the intention of the legislation - and that was the general theme from all the witnesses that were presenting in respect to the breadth and the scope of the legislation. Nobody was disagreeing with the intent or the purpose of that."
The FPA were invited to present evidence to the PJC alongside the Financial Services Council (FSC), Association of Financial Advisers, Corporate Super Specialist Alliance, Australian Institute of Superannuation Trustees, Association of Superannuation Funds of Australia, Industry Super Network, Law Council of Australia and Treasury.
