Ban on advertising of superannuation funds during onboarding

Announcement date
18 September 2024 

Link to announcement
Payday superannuation design details to ensure super is paid on time

Problem being addressed
Retirement outcomes are not served by employees making uninformed or disengaged choices about their superannuation fund. Where employees are uninformed or disengaged, stapling and default superannuation fund arrangements protect consumers. Advertising of superannuation products during onboarding can confuse or pressure employees to make uninformed decisions, open inappropriate products and unintentionally create duplicate accounts. 
 
Proposal
A limited ban on superannuation product advertising during onboarding to protect employees from being influenced to join inappropriate products, in combination with adjustments to stapling policy to reduce the number of unintentional duplicate accounts. Products could be prohibited from advertising during onboarding if they: are not MySuper products; have failed the annual Australian Prudential Regulation Authority (APRA) superannuation performance test; or are related to the onboarding service provider. This limited ban would reduce consumer harm. 

Assessed Impact Analysis outcome
Adequate

Assessment comments
The IA addresses the seven IA questions and follows an appropriate policy development process commensurate with the significance of the problem and magnitude of the proposed intervention. To be considered ‘good practice’ as per the Australian Government Guide to Policy Impact Analysis, the IA would have benefitted from further analysis across all questions, including further outlining the competition impacts.

Regulatory burden
The Treasury estimates these measures will result in an increase in regulatory costs of between $480,000 and $1.16 million per year, averaged over ten years. This estimate consists of $480,000 and $2.8 million in one off costs, and ongoing costs of between $440,000 and $880,000 per year.