Issue 666, 11 April 2018
In this issue:
- ASFA Thomson Geer Regulatory Update (March 2018 quarter)
- APRA review of executive remuneration
- ATO event-based reporting: MAAS legislative instrument
- AML/CTF: low value superannuation accounts and departing Australia superannuation payments
ASFA Thomson Geer Regulatory Update (March 2018 quarter)
Delivered in partnership with Thomson Geer, the latest edition of the ASFA Thomson Geer Regulatory Update has been released and is now available for members to download from the Regulatory Update section of the ASFA website.
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 Julia Stannard.
APRA review of executive remuneration
APRA has released the results of a review of remuneration practices at large financial institutions, including superannuation funds, concluding there is considerable room for improvement in the design and implementation of executive remuneration structures.
The review examined whether policies and practices in regulated institutions were meeting the objectives of APRA’s prudential framework: that remuneration frameworks operate to encourage behaviour that supports risk management frameworks and institutions’ long-term financial soundness.
APRA’s review comprised detailed analysis of executive remuneration practices and outcomes from a sample of 12 regulated institutions across the authorised deposit-taking institutions, insurance and superannuation sectors.
The review found that remuneration frameworks and practices did not consistently and effectively promote sound risk management and long-term financial soundness, and fell short of the better practices set out in APRA’s existing guidance.
The report identified the need for improvement in:
- ensuring practices adopted were appropriate to the institution’s size, complexity and risk profile
- the extent to which risk outcomes were assessed, and weighted, within performance scorecards
- enforcement of accountability mechanisms in response to poor risk outcomes
- evidence of the rationale for remuneration decisions.
Chairman Wayne Byres said APRA encouraged all regulated institutions to review their remuneration frameworks and address any areas where APRA’s findings indicated room for improvement.
In response to the findings, APRA will consider ways to strengthen its prudential framework. Any revisions to the prudential framework will be subject to APRA’s usual practices of stakeholder consultation and engagement.
ATO event-based reporting: MAAS legislative instrument
The ATO has published an instrument setting out the timeframe within which superannuation providers and life insurance companies are required to report superannuation account phases and attributes to the ATO under its new event-based reporting regime, the Member Account Attribute Service (MAAS).
The Taxation Administration Member Account Attribute Service – the Reporting of Information relating to Superannuation Account Phases and Attributes 2018 relates to the requirement to lodge a MAAS form to report superannuation account phases and attributes. It applies to all superannuation providers except self-managed superannuation funds. Superannuation account phases and attributes include but are not limited to, opening and closing accounts, and acceptance of contributions and government rollovers.
The instrument provides that a MAAS form is to be lodged no later than five business days (or such later date as the Commissioner of Taxation may allow) after the day on which:
- an account is opened or a life insurance policy is first held
- any changes to the superannuation account phases and/or attributes relating to the account or policy occur.
Reporting of superannuation account attribute and phase events to the ATO in the MAAS form commenced on 1 April 2018, however—following consultation with industry—transitional arrangements will apply until 31 October 2018. This means the time for the first lodgment of the MAAS form is no later than 5 business days from 31 October 2018 (unless further deferred by the Commissioner).
A previous ATO instrument, Reporting of all new member accounts and closed member accounts by superannuation providers in relation to superannuation plans (other than self managed superannuation funds) in accordance with the Taxation Administration Act 1953 required providers to report to the ATO details of all new member accounts and closed member accounts, commencing from 31 March 2017. This Instrument (see ASFA Action issue 621) has now been repealed.
However, the new instrument does not change:
- the reporting requirements detailed in Reporting of event based transfer balance account information in accordance with the Taxation Administration Act 1953 (see ASFA Action issue 646)
- providers’ obligation to provide a ‘member contributions statement’ to the ATO for the financial year ending 30 June 2018 (governed under the 2014 instrument Lodgment of statements by superannuation providers in relation to superannuation plans (other than self-managed superannuation funds) for each financial year ended 30 June in accordance with the Taxation Administration Act 1953).
AML/CTF: low value superannuation accounts and departing Australia superannuation payments
AUSTRAC has amended the anti-money laundering and counter-terrorism financing (AML/CTF) rules to remake exemptions that facilitate the delivery of two superannuation-related designated services.
The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No 2) remakes exemptions in Chapter 41 of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (Cth) relating to two designated services – cashing out of low value superannuation accounts ($1,000 or less) and the Departing Australia Superannuation Payment. These exempt a designated entity from requirements to conduct an applicable customer identification procedure before delivering the designated service.
The instrument commenced on 3 April.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
