The global information services company said it’s essential for clients to review current remuneration structures, remuneration frameworks and board reporting.

“The government supports recommendations relating to the supervision of remuneration, limited use of financial metrics for long-term variable remuneration, and annual review of the remuneration system of frontline staff,” they wrote.

“Remuneration structures will need to be reviewed and amended to ensure they sufficiently address performance for management of non-financial risks and, in particular, misconduct and compliance.

“Remuneration frameworks should be reviewed and amended in line with revised prudential standards and guidance, with particular focus on the metrics surrounding long-term incentives and the ability to claw back remuneration that has vested. Board reporting on risk management performance and remuneration will need to be reviewed and enhanced.”

Also essential is for clients to periodically review culture and governance.

“The government supports the recommendation that all financial services entities should, as often as reasonably possible, take proper steps to assess their culture and governance; identify any problems; deal with those problems and determine whether changes have been effective,” the piece outlined.

“The government also supports the recommendation relating to APRA supervision of culture and governance. There will be a regulatory requirement to periodically review culture and governance.”

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The Wolters Kluwer staff noted that clients need to be advised and prepared for a narrowing market.

“The government has agreed that a person should have only one default superannuation account. On the one hand, this should result in cost savings for the sector; however, it may also narrow the market for some funds particularly if they are industry specific,” they said.

A review of engagement, gift and corruption policies is also important to flag with clients, they added.

“Stop ‘treating’ employers to get nomination as default fund. The government has agreed to the recommendation that trustees of a regulated superannuation fund, and their associates, should be prohibited from doing any specified acts which may reasonably be understood by the recipient to have a substantial purpose of having the recipient nominate the fund as a default fund or having its employees become members of the fund.

“It was recommended that this should be a civil penalty provision. The relevant provisions of the SIS Act will likely be amended to make it clearer that monetary and non-monetary benefits are prohibited to be paid by funds to entice employers to use them as the default employee fund. Engagement, gift and corruption policies for funds will require review to ensure they prohibit this type of conduct and engagement with employers.”