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Issue 746, 1 April 2020 
In this issue: 

 

COVID-19 Coronavirus: APRA and ASIC letter to trustees and FAQs 

APRA and ASIC have jointly written to registrable superannuation entity (RSE) licensees to provide guidance to help them manage the financial and operational challenges associated with COVID-19, while continuing to meet their obligations to look after members’ best interests. 

The letter addresses issues in relation to liquidity, communication with members, insurance, and monitoring for scams and fraud. 

The letter notes that the regulators have postponed a range of new and planned regulatory initiatives to help licensees focus their resources and attention on responding to the impact of COVID-19. It states that: 

“…while the priorities of both regulators and trustees must inevitably shift during this period, unless APRA or ASIC has granted specific relief, trustees’ legal, regulatory and reporting obligations remain unchanged. 

Trustees must therefore ensure key business activities, such as administration, are operationally resilient to ensure ongoing processing of member benefits. Trustees should be scenario testing their critical functions and determining (in conjunction with outsourced providers) essential staffing levels and contingency plans to ensure essential member transactions proceed in a timely manner, particularly where such activities are undertaken offshore. 

Given the unusual and demanding circumstances, both regulators recognise that meeting legal and regulatory requirements may be challenging for some trustees. We encourage early and regular engagement in these cases and trustees can expect a constructive and pragmatic approach. To the extent that non-COVID related requests from either regulator remain outstanding, trustees may seek an extension from the relevant regulator where necessary.” 

APRA has published answers to the following superannuation-related frequently asked questions (FAQs): 

  1. In light of the additional pressures on the administration of superannuation funds, what action should trustees be taking? 
  2. Will APRA continue with the Super Data Transformation project? 
  3. Is APRA providing trustees relief from complying with SPS515 Strategic Planning and Member Outcomes, in particular the requirement to undertake a business performance review (BPR) by 31 December 2020? 
  4. APRA has some data queries underway with certain trustees – are these continuing? 
  5. Should trustees continue to undertake a trial outcomes assessment? 
  6. Will APRA’s superannuation publications be released as planned? 
  7. Will APRA publish the updated MySuper Product Heatmap with updated fee data in June 2020? 
  8. Will APRA proceed with thematic activity relating to outsourcing and conflicts management, which had been planned for 2020? 
  9. Will APRA take action against trustees for breaching the three-day portability rule? 
  10. Will the publication of the industry level findings from the joint work on trustees’ oversight of fees and other charges be deferred? 

ASIC has published answers to the following superannuation-related FAQs: 

  1. Will the publication of the industry level findings from the joint work on trustee’s oversight of fees and other charges be deferred? 
  2. Will ASIC be amending ASIC Class Order [CO 14/443] to extend relief for portfolio holdings disclosure obligations? 
  3. Will ASIC be providing any relief from the requirement to hold an annual members’ meeting under section 29P of the Superannuation Industry (Supervision) Act 1993? 

The FAQs will be updated periodically over the coming weeks and months. 

 

 

COVID-19 Coronavirus: new compassionate ground for early release of super 

As reported in ASFA Action issues 745, 743 and 742, the Coronavirus Economic Response Package Omnibus Act 2020 provides for a new compassionate ground for the early release of superannuation for those impacted by the pandemic. 

Individuals seeking release of their superannuation under the new compassionate ground will be required to apply directly to the ATO. The ATO has provided updated design and information about the process for the new compassionate ground payments on its website. 

 

 

COVID-19 Coronavirus: JobKeeper payment 

On 30 March the Government announced that it will introduce a wage subsidy of up to $1,500 per fortnight for eligible employees of businesses that have suffered a reduction in revenue of at least 30 per cent (50 per cent for businesses with an annual turnover exceeding $1 billion) since 1 March. The subsidy will be known as the ‘JobKeeper’ payment. 

According to the Prime Minister, the enabling legislation is still being drafted and arrangements to reconvene Parliament are yet to be finalised. While the Prime Minister indicated “there will be no superannuation guarantee levy on this payment”, it appears this may not fully describe the potential outcomes. A factsheet released by Treasury indicates that whether superannuation guarantee (SG) is payable will depend on factors including whether the JobKeeper payment is used by the employer to subsidise an employee’s existing earnings level or to increase their earnings, or is paid in circumstances where the employee has been stood down without pay and is not performing work-related duties for the employer. This is one aspect of the subsidy that will require further clarification. 

The ATO has established an online form for businesses to register to receive updates on the JobKeeper payment but is advising it cannot provide any further information at this time. 

 

 

ASFA REGULATORY WATCHLIST

ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations

and other regulatory announcements relevant to superannuation.

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