Big super funds and SMSFs could have to pay compensation | The Business | ABC NEWS
Assistant Treasurer Daniel Mulino is looking to revamp funding for the Compensation Scheme of Last Resort (CSLR), saying that large super funds, as well as people with self-managed super funds, could be asked to chip in. Mr Mulino says with more investors losing money through First Guardian, Shield investment funds and other high-profile cases, the CSLR was facing “huge pressure”, far beyond what was originally anticipated when the scheme was established.
Currently, the CSLR is funded by a levy on financial advisers. Mr Mulino wants to widen the funding base. He is considering a three-tier “waterfall model” where future shortfalls would be allocated based on a sector’s alleged connection to the underlying losses.
There is now more than a $170 million shortfall in the amount required to fund victims making claims under CSLR. The scheme was introduced after the banking royal commission and was designed to assist victims of financial misconduct when all other avenues for compensation have been exhausted.
The Assistant Treasurer is also considering excluding what’s known as the ‘but for’ test, which could lower people’s payouts. That would mean people only get back what they’ve invested, rather than what they could have got if they’d received appropriate financial advice and earned interest.
Super Consumers Australia chief executive Xavier O’Halloran says he wants to see the compensation scheme broadened so that more financial services providers are contributing, and he wants the “but for” test to remain.
But the lobby group for industry superannuation funds, the Super Members Council led by Misha Schubert, is resisting the levy, which would be passed on to members. She also wants to see compensation limited to actual losses, removing payments for “but for” investment returns.
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Read more here: https://www.abc.net.au/news/2026-07-14/big-superannuation-funds-and-smsfs-could-pay-cslr-levy-mulino/106885970
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