All will be revealed - finally

Funds will have to tell members exactly where their retirement savings are invested

- Vita Palestrant

After a decade of repeated delays, the superannuation portfolio holdings disclosure regulation has been introduced. It will give members greater transparency and force greater accountability on funds.

Australia’s $3.4 trillion superannuation system is often touted as one of the best in the world. While our funds have been transparent on fees and asset allocation, they have been less transparent when it comes to investments.

Morningstar’s 2020 Global Study of Fund Disclosures singled out Australia for having the “weakest disclosure regime” among the 26 markets it reports on. “As an otherwise sophisticated market, Australia remains the only market where portfolio holdings disclosure is not required.”

Treasury announced the reforms in November, saying: “Reviews of the super system have found that current disclosure is unduly opaque, does not meet global best practice and that requiring the disclosure of portfolio holdings would provide greater transparency and allow members to understand where their superannuation is invested.

“Under the requirements, superannuation funds must disclose information about the identity, value and weightings of their investments. Members will be able to clearly see how much of their retirement savings are being invested by superannuation funds across a range of asset classes and derivatives.”

Given super has now become an important part of the financial system, Treasury says “it is timely to ensure policymakers and regulators have a sound understanding of the extent and nature of the use of derivatives, and any implications for the operation of our financial system that could arise from these exposures”.

New culture of transparency