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Issue 715, 12 July 2019 
In this issue: 

 

Departed temporary residents: consultation on disclosure relief 

ASIC has released a consultation paper about whether it should continue relief for superannuation trustees from obligations in the Corporations Act 2001 to provide an exit statement and notice to departed former temporary resident members. 

Class order CO 09/437 Departed former temporary residents’ superannuation–Disclosure relief relieves trustees of regulated superannuation funds from the requirement to notify and give exit statements to departed former temporary residents when their superannuation benefits are paid to the ATO under Part 3A of the Superannuation (Unclaimed Moneys and Lost Members) Act 1999. The relief is conditional upon disclosure of specified information in product disclosure documentation and on the trustee’s website. 

ASIC has indicated its preliminary view that CO 09/437 is operating appropriately and effectively, and it continues to form a necessary and useful part of the legislative framework. As a result, ASIC proposes to remake CO 09/437. However, in doing so, ASIC is proposing to make a minor amendment to transfer the obligation for website disclosures from the trustee’s website to the fund website. 

ASIC’s proposals are set out in Consultation Paper 318: Remaking ASIC class order on departed former temporary residents’ superannuation: [CO 09/437] and the draft ASIC instrument, ASIC Corporations (Departed Temporary Residents’ Superannuation—Disclosure Relief) Instrument 2019/XX. 

If you have any feedback you would like ASFA to consider in relation to this consultation, please forward it to Fiona Galbraith by close of business Wednesday, 14 August. 

 

 

Member outcomes assessment: APRA FAQs 

APRA has released a new set of frequently asked questions (FAQs) in relation to the new obligation on registrable superannuation entity (RSE) licensees to undertake member outcomes assessments, imposed as a result of result of recent changes to the Superannuation Industry (Supervision) Act 1993. 

The new FAQs focus on: 

 

 

Opt-in insurance for under 25’s and low-balance accounts: ‘Putting Members’ Interests First’ 

The Government has re-introduced into Parliament a bill to progress insurance reforms that were removed from its ‘Protecting Your Superannuation’ (PYS) package earlier this year. 

The Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 (PMIF Bill) seeks to implement provisions making insurance opt-in for members under age 25 and low-balance accounts. These measures were removed from the bill implementing the Government’s PYS reforms when that bill was considered by the Senate in February. A separate bill was immediately introduced to progress the age 25 and low-balance account reforms but lapsed in April when Parliament was dissolved ahead of the Federal Election. (See ASFA Action issues 704, 699 and 698 for background.) 

The newly re-introduced PMIF Bill includes amendments that prevent trustees from providing insurance on an opt-out basis to members who are under 25 years old and begin to hold a new product on or after 1 October 2019, and to members who hold products with balances below $6,000. In all circumstances, the member may opt-in to insurance by making a direction to the trustee. 

According to the explanatory material: 

The PMIF Bill remains before the House of Representatives, awaiting debate. It has been referred to the Senate Economics Legislation Committee for inquiry and report by 23 July. 

 

 

Genuine redundancy and early retirement scheme payments: consultation 

Treasury has commenced a consultation on extending the concessional tax treatment of genuine redundancy and early retirement scheme payments, from 1 July 2019. 

Currently, these payments receive concessional tax treatment where they are made to an individual under age 65. In its 2018-19 mid-year economic and fiscal outlook (MYEFO) statement, the Government announced its intention to extend concessional tax treatment to those under Age Pension qualifying age. 

Treasury has now released exposure draft legislation to give effect to this MYEFO announcement. 

From 1 July 2019, the proposed legislation will align the age below which a person can receive a genuine redundancy or early retirement scheme payment with the Age Pension qualifying age. This will address the circumstance where some older Australians who, due to their age, cannot access either the Age Pension or the tax-free component of genuine redundancy or early retirement scheme payments. 

The proposed legislation does not make any other changes to the taxation of genuine redundancy payment or other types of employment termination payments. It does not impact the tax treatment of payments made by superannuation funds. 

Treasury is seeking submissions on the draft legislation by close of business Thursday, 1 August. 

 

 

Intra-fund superannuation advice: ASIC instrument to be repealed 

ASIC has indicated it will withdraw a legislative instrument that provides now redundant relief from certain Corporations Act obligations in relation to intra-fund advice. 

Class order CO 09/210 Intra-fund superannuation advice provides relief for trustees of superannuation funds (and their authorised representatives) who provide personal advice to fund members about their existing fund from obligations imposed by section 945A of the Corporations Act. ASIC plans to repeal CO 09/210, on the basis the relief it provides is redundant following the repeal of section 945A in 2012. 

 

 

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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