Royal commission spotlight about to shift to super

Australia’s banks may have suffered severe scrutiny during the first part of the royal commission, but with the focus now shifting to superannuation, their situation could become much worse.

e18a5d9fc581 1

But it’s not just the retail and bank-owned super funds that will go under the microscope. Round five of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry will also focus on industry super funds, which may have cause to be nervous about what’s in store.

It is believed that the Government included super in the royal commission to embarrass industry funds for their connection to unions.

But it may be other factors that bring them undone, including their share of the tens of billions a year in fees extracted from people’s retirement savings.

“We estimate that the excess fees and charges and underperformance in super is about $12 billion a year,” RMIT University Associate Professor Michael Rafferty told the ABC.

“In other words, the rip-off in wealth management is about three to four times the rip-off in banking.”

While industry funds can hardly be accused of underperformance, Prof. Rafferty says that offering services such as financial planning, charging for insurance and prominently advertising their products make them look a lot like retail funds and “the net result of all of this is the whole superannuation industry is charging people too much”, he said.

Industry funds may also come under scrutiny for their lack of transparency, says independent financial adviser Louise Lakomy.

“I think retail funds are better at the transparency piece, because you can usually have some kind of research paper or some kind of product detail that goes into who the fund manager is, what the exposure is to a commercial property, retail property,” said Ms Lakomy.

“It goes into a lot more detail than what a typical industry fund would do.’’

Australia’s biggest superannuation provider, AMP, may have already borne the brunt of the brutal royal commission investigation, with billions wiped off the company’s value, half a billion in costs, recommendations for criminal charges and barely a body left sitting in the top offices but, if its banking practices are anything to go by, once the focus shifts to super, it can expect a lot worse.

The Productivity Commission has already indicated that it won’t be pretty for super. Earlier this year, it released a report damning providers for exorbitant fees and what it believes is a sector imbued with corruption, inefficiency and unnecessary costs.

One such cost is insurance, which can wipe out huge portions of retirement incomes. According to the Productivity Commission’s draft report on super, one in four people don’t realise they’re paying for life insurance as part of super. If these people have multiple accounts, they could be losing hundreds of thousands over the life of their funds.

“Income protection policies have terms which say you can only collect under one policy,” said Grattan Institute chief John Daley.

“So, by definition, if you have a number of those policies, people are paying premiums and they could never collect on them.”

Industry regulators, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are also up for a roasting, with many finance experts saying the both talk the talk when it comes to regulation, but do not walk the walk.

According to the same draft report, APRA has been missing in action when it comes to regulating Australia’s $2.6 trillion super industry.

The report revealed that one in four funds – retail, industry, corporate and government funds – consistently underperform, a fact which is hidden by the lack of quality performance data.

The Productivity Commission has accused the regulators of not holding funds accountable for bad behaviour, to the detriment of millions of Australian fund holders.

“The problem here is the regulators needing more spine,” said Mr Daley.

“Regulators in Australia, financial regulators, by and large have plenty of powers, the issue is whether or not those powers are exercised.”

One thing is certain: the next few weeks will be an eye-opener for fund holders, but will any such action taken as a result of the commission actually benefit retirees who may have been victims of super rorts over the past 25 years? Or will the result be the Government putting the onus back onto the customer, for not having chosen the right fund in the first place?

We’ll see.

What would you expect as a fair result of the royal commission into super? Should you expect compensation for poor practice? Or do you trust that your fund has performed and behaved admirably?

ADSO Comment

Very good questions to be asked except for the 700,000 Australian military and Australian Public servant clients of the Commonwealth Superannuation Corporation  (CSC) that has been expressly excluded from the Royal Commission

Royal Commission

They have no choice of Funds.

The Prime Minister’s refusal to have the CSC included is in his words the government agencies have a higher standard of scrutiny through legislation and legislators, the National Audit office and parliamentary senate estimates hearings. Doesn’t some of this sound familiar as reasons why the Government opposed the Royal Commission into banking?

Related articles:

A Shock to the Super System

Super Funds Exploiting Members

Can you trust your Super Funds

Help Us in Supporting the Case for CSC inclusion

 

DVA e-news July 2018

Welcome to the July issue of DVA e-news, featuring information on DVA’s client satisfaction survey and a new PTSD treatment trial as well as the following stories:
• Veterans’ Advocacy and Support Services Scoping Study
• Portrait honours Indigenous service
• Battle of Hamel remembered
• One-off ADF post-discharge GP assessment
• Nominations open for 75th anniversary of Hellfire Pass

READ MORE

RSL National President Robert Dick resigns following charity probe

RSL National President Robert Dick resigned at the charity’s board meeting on Thursday, amid an investigation into the organisation’s governance and accountability issues.

The Australian Charities and Not-for-profits Commission said Mr Dick’s decision to step down was taken to “put the interests of the charity and the RSL first.”

The Bergin inquiry – which reported on RSL NSW, DefenceCare and the charity’s aged-care arm RSL Lifecare – along with the ACNC’s own investigations, led to the investigation of RSL National.

Spending by the RSL NSW had fallen into the spotlight after it was discovered that the former state president Don Rowe had spend $475,000 on his corporate credit card over four years.

The national charity regulator directed RSL National in February to enlist a governance expert to review its board and governance practices, and develop an action plan to address its shortcomings.

The ACNC said Mr Dick’s resignation acknowledges the need for new leadership to implement “significant changes” once the plan – developed with KPMG – is finalised at the end of this month.

“The governance improvement Action Plan resulting from the KPMG review will contain a clear set of recommendations to address current, critical governance issues and the need for a broader, more strategic process of reform and improvement,” ACNC Commissioner Dr Gary Johns said.

“RSL National will soon have a clear path forward and know what steps it must take to get back on track.”

RSL ACT president John King will fill the vacant role until new appointments are made.

“RSL National is committed to improving its governance and accountability, in order to fulfil our important role as the peak body of RSL in Australia,” said Mr King.

RSL members will have to wait until “governance and compliance is improved” before being allowed to elect a new RSL National president.

Read the full SMH article

READ MORE

National RSL president resigns amid probe – The Australian

DVA Minister – RSL Continues Supporting Veteran Community

download 16MINISTER for Veterans’ Affairs Darren Chester has today reiterated the importance of the Returned and Services League (RSL) to the veteran community following the announcement that Robert Dick has stood down as National President of the RSL.

“I thank Mr Dick for his 21 years of service in the Royal Australian Air Force and his significant contribution to the RSL and veteran community and wish him well in his future endeavours,” Mr Chester said.

“I look forward to continuing to work with the RSL and Mr Dick’s successor in the future to ensure that our ex-service men and women receive the services and support they need.”

“The RSL has played a vital role in supporting the veteran community since it was established over 100 years ago by offering care, financial assistance, advocacy and commemorative services,” Mr Chester said.

“The Government is committed to putting veterans and their families first, and working with the RSL and other ex-service organisations is an important part of this commitment.”

Read the full Release

DVA – 2018 Client Satisfaction Survey

The Department of Veterans’ Affairs (DVA) is preparing fits Client Satisfaction Survey (CSS), to collect information about clients experience interacting with DVA to help identify ways to improve its services.

The  Survey seeks the views of around 3,000 veterans and dependants who are currently receiving services from DVA. ORIMA Research, an independent market research company, is conducting the survey on DVA’s behalf.

Those selected to participate in the survey will receive a letter in July advising them about the survey and instructions on how to opt out of the survey for people not wanting to participate. An ORIMA  survey interviewer  will telephone between late July and the end of August 2018 to conduct the survey, which should take about 20 minutes to complete.

All information will be collected and stored in accordance with the Australian Privacy Principles and the Privacy Act 1988 (Cth). Answers given by participants will be completely confidential and any personal details which may identify participants will not be passed to DVA. Answers will not affect any benefits or services which participants receive from DVA, or to which they may become entitled in the future. If they wish, participants can discontinue the survey at any time.

Information about the survey can be found on DVA’s website w.dva.gov.au/survey.  Any questions email [email protected], or call the general enquiry line on 133 254.

Veterans’ Advocacy and Support Services Study – Brisbane & Townsville Consultations

Members of the veteran, ex-service and Defence communities

I am seeking your input to the Veterans’ Advocacy and Support Services Study at face-to-face meetings in:

 Brisbane on Monday 16 July and Tuesday 17 July, and

 Townsville on Tuesday 7 August and Wednesday 8 August.

I would like to hear from:

  • ex-service organisations
  • advocates and pension and welfare officers
  • clients of advocates and pension and welfare officers
  • clients of the Department of Veterans’ Affairs, and
  • anyone who has an interest in veterans’ issues.

To book a meeting please go to the website: www.dva.gov.au/advocacystudy

If you have any difficulties booking a meeting or have a question, please send an email to [email protected]

If you cannot attend a meeting, I would welcome receiving your views and ideas in a submission. See the website for more information: www.dva.gov.au/advocacystudy

Kind regards

Robert Cornall AO
Study Lead

is an independent study investigating how veterans and their families are assisted to access entitlements and services.

Invitation – Inquiry into ADF use of Mefloquine and Tafenoquine

On 19 June 2018 the Senate referred to the Foreign Affairs, Defence and Trade References Committee a range of matters relating to the ADF use of Mefloquine and Tafenoquine for inquiry and report by 17 September 2018. 

The full terms of reference are to inquire with particular reference to:

(a) the current and past policies and practices for:
(i) prescribing Quinoline anti-malarial drugs to ADF personnel, and
(ii) identifying and reporting adverse drug reactions from Quinoline anti-malarial drugs among ADF personnel;

(b) the nature and extent of any adverse health effects of those who have taken Mefloquine/Tafenoquine on serving and former ADF personnel;

(c) the support available for partners, carers and families of personnel who experience any adverse health effects of Quinoline anti-malarial drugs;

(d) a comparison of international evidence/literature available on the impact of Quinoline anti-malarials;

(e) how other governments have responded to claims regarding Quinoline anti-malarials; and

(f) any other related matters.

The purpose of this letter of invitation is to draw your attention to the inquiry and to invite you or your organisation to make a written submission to the committee by 31 July 2018.

READ THE DETAILS

DVA Secretly Changed Rules to Deny Veteran’s Claim

The Department of Veterans’ Affairs secretly deleted an incapacity policy to prevent an injured veteran claiming compensation. The Department denies any impropriety by its staff.

Read the full statement from the Department of Veterans’ Affairs.

ABC  TV  7.30 Report 18th June 2018

www.abc.net.au/7.30/dva-secretly-changed-rules-to-deny-veterans-claim/9883774

ALP Supports – Banking Royal Commission Must Include CSC in Terms of Reference

Labor has written to Treasurer, Scott Morrison and Minister for Veterans’ Affairs, Michael McCormack backing calls by ex-service organisation to include the Commonwealth Superannuation Corporation (CSC) into the Terms of Reference for the Royal Commission into the misconduct in the Banking, Superannuation and Financial Services Industry.

Royal Commission

While the Turnbull Government made it clear they wanted superannuation to be examined by the Royal Commission they have neglected to include CSC- a significant player in the superannuation sector especially for our current and former Australian Defence Force (ADF) personnel.

Labor has listened to calls from the National Returned and Services League (RSL) and the Alliance of Defence Services Organisations (ADSO) who have also raised their concerns about the exclusion of the CSC from the Terms of Reference.

In neglecting to include CSC from the Terms of Reference our service men and women cannot be satisfied that CSC is working in their best interests.

If the Turnbull Government believes superannuation needs to be examined by the Royal Commission then they need to amend the Terms of Reference to include CSC.

Labor is committed to ensuring the Royal Commission delivers justice to all families and small businesses that have suffered because of the misconduct in the banking and financial services sector.

Open Letter to the Hon. Malcolm Turnbull MP Prime Minister of Australia

 

 

 

Dear Prime Minister,

ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY
Call to include the Commonwealth Superannuation Corporation

The Alliance of Defence Service Organisations and the Returned & Services League of Australia, on behalf of 230,000 serving and former Australian Defence Force men and women, and their families, whose superannuation is managed by the Commonwealth Superannuation Corporation (CSC) cordially pose you the question:
“Why is the Commonwealth Superannuation Corporation excluded from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry”?

CSC is the only significant superannuation entity in Australia to avoid examination with the Government claiming that it is “not only already well-regulated but is also subject to greater scrutiny and accountability than other funds by Acts of Parliament, by the Australian National Audit Office, and through oversight by a Senate Estimates process”.

Those very same ‘well-regulated’ claims were initially made as arguments against holding a Banking Royal Commission. What has transpired at recent Commission hearings starkly exposed the inability of established regulators to deal with misconduct. No misconduct is necessarily implied against CSC but what possible confidence could anyone now have that the very same or similar inability to properly scrutinise should not apply to CSC’s regulators as well.

Simply put, the veterans’ community is not convinced of assurances that CSC is as well oversighted and regulated as has been the claim thus far. As an example, if CSC always acts in the best interests of its members, what could have driven legal proceedings, self-funded by disabled individual exservice personnel as recently as last week, seeking redress for claimed unfairness and injustices.

The Royal Commission’s Terms of Reference say: “All Australians have the right to be treated honestly and fairly in their dealings with…. superannuation…. providers.”

The Defence Family of 230,000 service men and women, serving and retired, and those they leave behind, are also Australians. Why is their superannuation provider excluded from Royal Commission scrutiny? Why deny the Defence Family an equal voice in making submissions to the Royal Commission?

We urge you to include the Commonwealth Superannuation Corporation in the Royal Commission’s Terms of Reference without further delay. Fairness demands nothing less!

Yours sincerely,

 

                        

 

 

Kel Ryan                                                                                Robert Dick
National Spokesman                                                           National President
Alliance of Defence Service Organisations                      RSL Australia
Mobile: 0418 759 120                                                           Mobile: 0448 889 848

Phone: (02) 6265 9530   Email: [email protected] ABN: 49 929 713 439

——————————————————————-

                  

 

RSL & ADSO Comments

The Open Letter has been sent to the PM and all Federal Parliamentarians, the Defence Family network and national media outlets.

The ALP has announced its support for our request here.

We ask your support for the CSC to be included in the Royal Commission by calling the PM (both his electorate office (02) 9327 3988 and parliamentary office (02) 6277 7700) and your local Federal member at their electorate office (details at www.aph.gov.au/Senators_and_Members  , ideally before Parliament resumes next week 18th June or during the Parliament sittings (18 – 21 June and 25 – 28 June)
Thank you Australia.

 

 

 

 

 

 

 

ALP – Labor announces Senate Inquiry Inquiry into the use of Anti – Malarials in the ADF

Today, Labor has announced that we will move to establish a Senate Inquiry into the use of the Quinoline anti-malarial drugs Mefloquine and Tafenoquine in the Australian Defence Force.

 

HWA

It is almost two years since the Turnbull Government first acknowledged concerns around the use of the anti-malarial drug, Mefloquine.

However, members of the serving and ex-service community have continued to raise their concerns around the side effects from some anti-malarial drugs which were taken during their service.

It is time for a proper and public examination of the issue and to establish the facts.

In that spirit, Labor has discussed the draft Terms of Reference with the Government to ensure the Senate Inquiry has the opportunity to work through this issue in an open and transparent manner and provide a thorough and comprehensive report about the use of Quinoline anti-malarial drugs in the ADF.

The draft terms of reference for the inquiry are:

The use of the Quinoline anti-malarial drugs Mefloquine and Tafenoquine in the Australian Defence Force with particular reference to:

A. Current and past policies and practices for prescribing quinolone anti-malarial drugs to ADF personnel

B. Current and past policies and practices for identifying and reporting adverse drug reactions from quinoline anti-malarial drugs among ADF personnel

C. The nature and extent of any adverse health effects of those who have taken Mefloquine/Tafenoquine on serving and former ADF personnel

D. Support available for partners, carers and families of personnel who experience any adverse health effects of quinoline anti-malarial drugs

E. A comparison of international evidence/literature available on the impact of quinoline anti-malarials

F. How other governments have responded to claims regarding quinoline anti-malarials

G. Any other related matters.

Labor understands this is a complex issue and looks forward to the Inquiry providing further transparency on this issue.

It is anticipated the inquiry would hold public hearings to allow all voices to have an opportunity to be heard.

Labor will consult with senators over the coming weeks to establish the inquiry during the next sittings of the Senate in June.

Amanda Rishworth MP & Senator Alex Gallacher
Tuesday 5 June 2018