Religious superannuation funds will have their faith-based investment strategy taken into account by the end of this year when undergoing the annual performance test.
After representations from Christian Super and Islamic super fund Crescent Wealth, the Albanese Government intends to set a supplementary test for faith-based funds penalised under the My Super, My Future standards.
Gambling, alcohol and other industries in which faith-based funds will not invest are well-represented in the ASX200, Australia’s primary stock market index that acts as the benchmark for Australian equity performance.
Faith-based funds that do not invest in these asset classes may perform worse under the current annual performance test and, once new legislation passes later this year, will instead be assessed against a different supplementary test that takes faith-based investment strategies into account.
Christian Super and the Australian Catholic Superannuation and Retirement Fund have undergone merger processes as a result of failing the performance test in recent years.
“There are some funds which are absolutely, 100 per cent set up to attract members interested in having their superannuation invested in accordance with their values, and their religious values and beliefs,” Assistant Treasurer Stephen Jones told The Catholic Weekly.
“… some funds see the current benchmarks as a disincentive to invest in environmental, social and governance (ESG) compliant asset classes – such as renewable energy, or social housing and other infrastructure projects.”
Mr Jones said it was not reasonable in a free society to penalise these funds by treating them in the same way as other super funds.
The Albanese Government will also review superannuation benchmarks by the end of the year, Mr Jones said, meeting another election promise.
He told The Catholic Weekly that he is aware that some funds see the current benchmarks as a disincentive to invest in environmental, social and governance (ESG) compliant asset classes – such as renewable energy, or social housing and other infrastructure projects.
“I’ve got to say I’m a little skeptical about this. But I want to put it to the test and if they’ve got a case to be made, then that’ll come out in the review we’ve commissioned,” he said.
Concessions for faith-based super are “absolutely about ensuring the principle of freedom of religion and freedom of religious expression,” Mr Jones added.
A spokesperson for the Australian Catholic Superannuation and Retirement Fund declined to comment.