Deadline for updating exit statement templates nears

May 2021
Disclosure & Marketing
Fees & Costs
Regulated Disclosure Documents

Exit statements for superannuation products that cover exit reporting periods beginning on or after 1 July 2021 must comply with the revised fees and costs disclosure requirements for periodic statements under ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 (as amended).

This must occur whether or not the product’s product disclosure statement has been updated to comply with the revised fees and costs disclosure requirements for product disclosures under the Instrument (by electing to opt in to the new requirements early).

While the Instrument’s changes to the presentation of fees and costs in periodic statement (when looked at in isolation) may not appear very onerous, there are a number of important underlying considerations which may be onerous depending on a product’s characteristics (for example, if buy/sell spreads apply).

The new requirements (including revised fee definitions) affect the calculations of fees and costs figures that must be disclosed in a new format.  In particular, a dollar amount reflecting the impact of buy and sell spreads incurred during the reporting period must be reflected in the amount of fees and costs impacting a former member’s investment (other than fees deducted directly from an account).  Also the use of reserves and tax deduction benefits during the reporting to meet fund expenses must also be considered for potential impacts on the disclosure of the amount of these other fees and costs.

While estimated amounts may be provided (based on the apportioned amount of fees and costs affecting an investment that are not shown as transactions in a statement), estimates must be reasonable.  This will usually require changes to administrative systems or processes for completing variable fields in a periodic statement.  

The new requirements for exit statements (or the implications for systems and processes) is something that might easily be missed, particularly given the significant amount of other reforms that funds are currently dealing with.  Because complying with the new requirements is not straightforward in some cases, if trustees have not already commenced preparation for their implementation or implementation is not well progressed, the new requirements will require urgent attention to meet the pending deadline.

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