ASIC has today released Consultation Paper 384 Employee redundancy funds (CP 384) to seek feedback on the requirements that should apply to employee redundancy funds under the Corporations Act 2001 once the transitional relief ASIC has granted expires on 1 April 2026.
ASIC considers it is an appropriate time to re-assess the relief afforded to employee redundancy funds and the requirements suitable for fund operators given the:
- significant growth in funds under management
- range of activities now undertaken by fund operators beyond redundancy entitlements, and
- feedback received during prior consultation in 2024.
CP 384 seeks feedback on changes to the definition of ‘employee redundancy funds’ for the purposes of guidance and any relief we grant, and three options for the regulation of employee redundancy funds going forward, which are:
- allow the relief to expire and require full compliance with the Corporations Act
- grant relief from specific obligations in the Corporations Act, and
- remake the existing relief with additional conditions.
ASIC intends to announce its final position on its approach to regulation of these funds under the Corporations Act by late 2025.
Providing feedback
ASIC welcomes feedback from industry and interested stakeholders on the issues raised in CP 384, particularly protections under the Corporations Act that would assist employees and employers and the cost and impact of regulation on fund operators.
Submissions should be sent to rri.consultation@asic.gov.au by 5.00 pm on 22 July 2025. Feedback provided will not be treated as confidential unless you specifically request that we treat all or part of it in that way.
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Consultation Paper 384 Employee redundancy funds (CP 384)
Background
Employee redundancy funds are arrangements established to accept contributions from employers made on behalf of employees for the purpose of providing redundancy and incidental benefits for those employees.
Funds operators have been granted relief from the licensing, managed investment and associated provisions of the Corporations Act since 2000.
ASIC recently consulted on extending the relief in 2024 (see CS 9). Given the divergent feedback received, ASIC extended relief for a transitional period of 18 months pending further consultation in 2025.
There has been a significant increase in funds under management in this sector. In 2003, fund operators had approximately $500 million under management which by 2015 had increased to $2 billion under management. ASIC is now aware that some funds individually have close to or over $1 billion under management. Some funds are now also involved in activities beyond the provision of redundancy entitlements, including raising money for long service leave entitlements.
ASIC is Australia’s corporate, markets and financial services regulator.