Maximum civil penalties for core breaches of superannuation trustee obligations will rise from 2,400 penalty units to 50,000, an increase of more than twentyfold, under a package the government announced on Wednesday. The trigger was the collapse of the Shield and First Guardian Master Funds, which the government says cost almost 12,000 people around $1 billion in retirement savings.
Those 12,000 are the reason the package exists and they are not the people it compensates. Payments from the Compensation Scheme of Last Resort will be limited to actual investment losses rather than the returns a member might otherwise have earned, for applications reaching the Australian Financial Complaints Authority after 30 June 2027.
The reforms go at the front of the chain rather than the end of it. Unlicensed real-time contact with consumers about superannuation will be banned, with exemptions for advocacy, educational and employment communications. The exemption that lets financial advisers make unsolicited approaches under the anti-hawking regime will be cut back to existing client relationships, and breaches of that regime will carry civil penalties. Licensees will have to take reasonable steps to ensure their lead generation arrangements comply, including due diligence, record keeping and ongoing oversight.
Self-managed funds carry a share of the cost. The SMSF supervisory levy rises from $259 to $295, its first increase since 2013. Every self-managed fund also becomes a tier three payer in the waterfall model that funds the compensation scheme when a special levy is called, with the sector total scaled against assets under management relative to the broader trustee sub-sector and a flat amount applying per fund.
The Australian Taxation Office gets the power to block rollovers into a new self-managed fund while it is investigating fraud, financial abuse or misconduct. Trustee education before registration becomes mandatory, funds will have to hold uniquely identifiable bank accounts, and a written investment strategy will be required up front rather than assembled after the fact.
Assistant Treasurer Daniel Mulino, who holds the financial services portfolio, took the package to the National Press Club. "We are focused on ensuring that Australians are protected from conduct that can slash savings and reduce financial security in retirement," he said. The government's statement described how poor conduct at one point in the chain "can be amplified as consumers move between lead generators, advisers, trustees, investment products and compensation arrangements".
The regulators get instruments as well. The Australian Prudential Regulation Authority will be able to set risk-based capital requirements for trustees offering higher-risk investment options, and the Australian Securities and Investments Commission will be able to direct a trustee to begin remediation when an investment option fails and there is reason to suspect the trustee breached its obligations. Trustees will also face a legislated obligation to cap the advice fees deducted from member accounts.
What the package leaves alone is the rate. The superannuation guarantee has been 12 per cent since July 2025 and is not being lifted; Mulino said on Wednesday there were no plans to do so. Treasurer Jim Chalmers rejected the case for early access this week, saying it would "absolutely decimate the retirement incomes of millions of Australian workers".
Consultation with industry, consumer groups and regulators continues before any of this reaches a bill, and the Treasury fact sheet describes the measures as building on the 2026-27 budget. The government has been consulting on the compensation scheme's funding since earlier this year, when it put out three papers covering trustee governance, lead generation and the scheme itself.
For the members of Shield and First Guardian, the number that matters is not the penalty ceiling. It is the actual-loss rule and the date their application lands at the complaints authority.
