Super Members Council Opposed Compensation Levy Funding
The council has formally objected to government plans to spread compensation costs for firm failures across superannuation funds.
Updated on Oct. 14, 2026 in Financial Planning
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The Super Members Council has challenged a government proposal to fund the Compensation Scheme as a Last Resort (CSLR) for the 2026-27 period. The council argues that super fund members should not have to subsidise failures in high-risk financial sectors.
Why it matters
The proposed funding model would force superannuation trustees to cover shortfalls caused by external financial firm collapses. This raises concerns about fairness for members whose retirement savings may be used to pay for losses incurred by unrelated financial advice businesses.
Estimated compensation claim costs for 2026-27 total $190.3 million, with $147 million of that sum tied to four specific firm collapses. These four firms account for 87% of the total projected costs for the period.
The players
Super Members Council
This is an industry body that represents the interests of superannuation funds and their members in Australia.
Dixon Advisory
This is one of the financial firms whose collapse has contributed to the projected compensation costs.
United Global Capital
This is a firm whose collapse is cited in the government's compensation scheme cost estimates.
Shield
This entity is currently involved in multiple court proceedings following its collapse.
First Guardian
This firm is currently the subject of ongoing court proceedings linked to its corporate collapse.
The details
The government intends to use a risk-based mechanism to address shortfalls when claims exceed the annual levy cap, impacting firms such as Dixon Advisory, United Global Capital, Shield, and First Guardian. There are currently 17 active court proceedings regarding the collapses of Shield and First Guardian.
Timeline
The CSLR operator announced estimated 2026-27 claim costs in July 2026.
The proposed compensation levy allocation covers the 2026-27 period.
Market Dynamics
The dispute over the Compensation Scheme as a Last Resort legislation highlights the tension between protecting financial consumers and maintaining the integrity of retirement savings. This debate reflects a broader shift in how the government assigns liability for financial firm failures across different industry sectors.
Superannuation members face the prospect of their retirement funds being used to subsidise losses from failed financial advisory firms. This policy change could affect the total returns on retirement portfolios if trustees are required to contribute to the scheme's shortfall.
The takeaway
The proposed levy underscores the ongoing risk to superannuation assets when used as a backstop for broader financial market failures. Readers should monitor how their specific superannuation fund manages potential liabilities related to these compensation requirements.
Further reading
For more information on retirement savings policies, visit Australia Financial Planning.
Source note: This article includes information reported by Financial Standard.
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