Issue 544, 10 July 2014
In this issue:
- Latest ASFA HWL Ebsworth Regulatory Update (June quarter)
- ASIC releases Report 398: Fee and cost disclosure: Superannuation and managed investment products
- AUSTRAC Industry Contribution discussion paper
- APRA consultation on select investment option reporting
- Unpaid super? Tell the ATO
Latest ASFA HWL Ebsworth Regulatory Update (June quarter)
Delivered in partnership with HWL Ebsworth, the latest edition of the Regulatory Update has just been released and is now available to download from the Regulatory Update section of the ASFA Toolbox.
This free ASFA member service seeks to keep you up to date with the changing superannuation environment, new legislation, developing policy and pertinent case law developments. The Update is issued quarterly, and provides essential information for those wanting to stay abreast of the challenges and issues facing superannuation funds.
The information will be of particular use to:
- trustees
- compliance managers
- risk managers
- operations managers
- administrators and self-managed superannuation fund (SMSF) service providers
- members of investment committees
- government and regulatory liaison managers.
For trustees, the Update will provide an overview of key information, with more detailed information directed at senior managers and administrators.
Members wishing to discuss the Update can contact ASFA general manager, policy operations, Tony Keir.
ASIC releases Report 398: Fee and cost disclosure: Superannuation and managed investment products
ASIC has released a report on its review of fee and cost disclosure practices in the superannuation and managed investment industry [Rep 398]. The aim of the report is to identify any gaps that may lead to the under-reporting of fees and costs.
The report identifies:
- key circumstances where inconsistent disclosure of fees and costs occur, including the non-disclosure of fees and costs relating to investment in underlying investment vehicles, incorrectly disclosing fees net of tax and inconsistent disclosure of performance fees
- ASIC’s view on proper disclosure with regard to the key issues identified
- further work that ASIC will undertake to assist the industry in meeting its fee and cost disclosure obligations. This work will include providing the industry with further guidance, modifying the requirements in the law to make it clearer and less costly to comply with, and encouraging the industry to develop standards that build on ASIC’s guidance.
ASFA supports ASIC’s efforts to promote fee transparency and comparability, and will work with ASIC and other industry associations to develop industry standards.
AUSTRAC Industry Contribution discussion paper
AUSTRAC has released a discussion paper on the proposed model for the AUSTRAC Industry Contribution for public consultation.
The discussion paper outlines the proposed charging structure and administrative arrangements for the industry contribution.
In the 2014 Federal Budget, the Australian Government announced that it would replace the cost recovery arrangements currently administered by AUSTRAC (known as the AUSTRAC Supervisory Levy) with an industry contribution to fund AUSTRAC’s regulatory and intelligence functions.
As part of implementing the Government’s decision, this discussion paper invites input and feedback concerning the AUSTRAC Industry Contribution.
The paper canvasses a proposed model for the calculation of the AUSTRAC Industry Contribution payable by reporting entities.
The discussion paper is available on the AUSTRAC website. Submissions close on 25 July 2014. If you have any comments that you would like ASFA to consider including in our submission to AUSTRAC, please send them to Jon Echevarria by close of business (COB) Friday 18 July 2014.
APRA consultation on select investment option reporting
APRA has released a consultation package on proposed data reporting requirements for select investment options (SIOs) offered by Registrable Superannuation Entities (RSEs). This follows APRA’s decision in March 2014 to defer the SIO reporting requirements until 1 July 2015, pending further consultation.
The consultation package comprises a discussion paper, proposed amendments to existing reporting forms, and drafts of additional forms. In particular, APRA has indicated that it will:
- amend the definition of ‘select investment option’, to remove the part of the current definition that draws in investment options underlying a reserve. APRA is also considering amending the current SIO threshold of $50 million and 5 per cent of total RSE assets
- amend existing SRS 330.1 (statement of financial performance) and 533.0 (asset allocation) to remove reporting requirements in relation to SIOs
- create two new specific reporting forms for SIO reporting; SRS 533.1 (asset allocation and members’ benefit flows) and 702.1 (investment performance). These new reporting forms will take effect from the first reporting period ending on or after 1 July 2015.
The consultation package is available on the APRA website. Submissions close on 15 September 2014.
In particular, APRA is seeking information that will assist it in better understanding any impediments to providing the proposed data, and has asked that the industry provides feedback that is as specific as possible and addresses the compliance impact of the proposals.
If you have any comments that you would like ASFA to consider including in our submission to APRA, please send them to Julia Stannard by COB Friday 22 August 2014.
Unpaid super? Tell the ATO
The Australian Taxation Office (ATO) is seeking information from third parties about employers who are not meeting their Superannuation Guarantee (SG) obligations.
Referred to as ‘third-party referrals’, this information from superannuation funds, unions and other government agencies is a useful source for the ATO in identifying instances of employer non-compliance for SG.
The ATO advises that third-party referrals can be emailed to SGThirdPartyReferrals@ato.gov.au, and should include the employer’s Australian Business Number (ABN), the employer’s name, and the date that SG non-compliance has been an issue. The ATO also advises that they take action on every referral they receive from third parties.
While reporting sponsoring employers to funds poses challenges for funds, due consideration also needs to be given to the rights of fund members to receive their SG contributions as and when they are due.
