Federal Assistant Treasurer Daniel Mulino will announce details of the special levy today. (Source: Newswire\/Getty) <\/p>\n
The $4.3 trillion superannuation sector will be required to pay into a compensation scheme for victims of dodgy financial advice<\/a>, despite rallying against the plan. The scheme is facing a $47.3 million shortfall and costs are expected to blow out in the future following the high-profile First Guardian and Shield collapses<\/a>.<\/p>\n Federal Assistant Treasurer Daniel Mulino will announce today that industry and retail super funds will contribute a \u201cspecial levy\u201d to cover a gap in funding for the Compensation Scheme of Last Resort<\/a> (CSLR) over the 2026 financial year. This marks the first time super funds<\/a> have had to pay.<\/p>\n \u201cThe 2026 special levy will be spread widely across subsectors to stabilise the scheme in the immediate term and avoid overwhelming any single part of the industry,\u201d Mulino will say, according to The Australian Financial Review<\/a>.<\/p>\n RELATED<\/p>\n \u201cIt is the responsible choice for now, but it does not fix the underlying problems that have driven the CSLR into this position so early in its life.\u201d<\/p>\n The CSLR revealed a total levy of $137.5 million would be needed for the 2027 financial year, with the figure not yet factoring in claims from the First Guardian and Shield collapses<\/a>.<\/p>\n This marks a huge increase from the revised $75.7 million figure for the 2026 financial year.<\/p>\n Mulino said that by spreading the cost amongst as many groups as possible, it would limit the damage caused by the special levy to any one sector.<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n The scheme was set up two years ago in the wake of the Banking Royal Commission<\/a> to act as a last resort support for victims of financial misconduct.<\/p>\n It provides up to $150,000 to victims if the financial firm responsible cannot pay up for reasons such as insolvency.<\/p>\n The cap is $20 million per subsector, however, the Minister has the discretion to impose a special levy.<\/p>\n It is funded through an industry-wide levy on financial advisers, banks, other lenders, mortgage and stockbrokers, however, super funds were not initially included.<\/p>\n Super Members Council, who represents profit-to-member funds like Australian Retirement Trust and AustralianSuper, last month argued APRA-regulated funds should not pay the special levy.<\/a><\/p>\n It warned spreading costs would \u201cescalate the moral hazard\u201d and mean \u201ceveryday Australians\u201d end up footing the bill for the losses.<\/p>\n The Association of Superannuation Funds of Australia has also rejected suggestions the super sector should contribute to the scheme, along with the Australian Council of Trade Unions, who argued \u201cworking people should not have to pay for APRA and ASIC\u2019s failures\u201d.<\/p>\n The Financial Services Council has said it would accept a short-term levy on the broad industry, but opposes normalising the use of \u201cspecial levies\u201d to fund the scheme and has called for broader changes to ensure the scheme is viable.<\/p>\n Mulino is set to release an options paper early next year on the \u201cstructural and technical levers available to ensure the scheme remains sustainable and operates as intended\u201d.<\/p>\n \u201cWe are committed to doing this in partnership with industry and consumer advocates,\u201d he will say.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n