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Issue 570, 12 June 2015 

In this issue: 


Section 29QC consistency requirements: deferral until 1 January 2016 

As foreshadowed in ASFA Actions 568 and 596, the legislative instrument that defers the implementation date for section 29QC of the Superannuation Industry Supervision Act 1993 until 1 January 2016, has been made and is available here. 

Section 29QC is intended to ensure that there is a level of consistency when a superannuation entity provides information to APRA under a reporting standard and also provides the same or equivalent information to other parties. Under class order relief, the requirement was currently due to take effect from 1 July 2015. 


QROPS update 

In ASFA Action 569, we provided an update on the current state of play in regards to the United Kingdom (UK) Government’s Her Majesty’s Revenue & Customs (HMRC) department letter to all Qualifying Recognised Overseas Pension Scheme (QROPS) providers in Australia asking them to ensure their schemes remain compliant with new rules, which were brought in from 6 April 2015. Specifically, the new rules do not allow members to access their benefits before age 55, unless they are retiring due to ill health, in line with UK pension rules. Australian schemes have until 17 June to acknowledge compliance with the extended requirements. 

ASFA is aware of significant unrest among APRA-regulated Australian QROPS providers which believe that they are unable to provide such an acknowledgement because they currently offer members limited access to benefits before 55 under certain circumstances apart from retiring due to ill health, including: 

ASFA Action 569 outlined that ASFA had: 

Further to this, ASFA has provided extra data to Treasury estimating the value of QROPS transactions. 

Overnight, ASFA was advised by HMRC that it has been looking at the matter centrally, in conjunction with official representatives, and is unable to enter into any separate discussions with any other bodies or individuals, given the sheer number of Australian QROPS. HMRC further indicated that it will be “writing to respondents as appropriate sometime after the deadline of 17 June” but in the meantime, schemes are free to return their declarations to 

ASFA continues to engage with Treasury. Treasury has informally advised us that they have had extensive discussions with HMRC with the aim to provide as much certainty to funds as soon as possible. 

ASFA members can contact Fiona Galbraith or Tony Keir on this issue. 


New APRA prudential guidance on fraud risk management 

APRA has finalised a new prudential practice guide outlining its expectations for the treatment of fraud risk in a registrable superannuation entity (RSE) licensee’s risk management framework, and outlines sound practices in relation to the management of fraud risk throughout an RSE licensee’s business operations. 

New Prudential Practice Guide SPG 223 Fraud Risk Management (SPG 223) focuses on current and emerging fraud risk factors affecting the superannuation industry, while taking into account broader risk management-related matters raised in Prudential Standard SPS 220 Risk Management and Prudential Practice Guide SPG 220 Risk Management. 

APRA has also released a letter outlining its response to submissions on the draft version of SPG 223. 


SuperStream readiness: APRA and ATO expectations 

APRA and the Australian Taxation Office (ATO) have written to all RSE licensees to outline their key expectations with regards to certain obligations under the Superannuation Data and Payment Standards 2012. 

The joint letter covers matters including: 

The letter also contains links to guidance notes issued by the ATO on some of the above matters. 


Single Touch Payroll: Government to consult further 

The minister for small business, the Hon. Bruce Billson MP, has announced that the Government will undertake further consultation with the business community as it looks to cut red tape for employers by simplifying tax and superannuation reporting obligations through Single Touch Payroll. 

Under Single Touch Payroll, employers’ accounting software will automatically report payroll information to the ATO when employees are paid. In addition, the Government will streamline tax file number declarations and super choice forms by providing digital services to simplify the process of bringing on new employees. 

Having considered feedback submitted in response to a discussion paper issued by the ATO earlier this year, the Government has acknowledged that the proposed start date of July 2016 will not be achievable for many businesses. 

The Government has also recognised that the proposal for employers to remit Pay As You Go withholding amounts and Superannuation Guarantee contributions in ‘real time’ (at the same time as employees are paid) poses cash-flow implications for business. As a result, future consultations will focus on real time reporting, with voluntary real time payments as an option. 

The minister has asked the Treasury and the ATO to continue to consult with the business community and the software industry on the scope and timing for the Single Touch Payroll initiative and the feasibility of conducting targeted pilots from July 2016. 


Family law superannuation interest rate determination 

The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2015 was registered on 9 June 2015, and will commence on 1 July 2015. 

The determination provides for the interest rate for adjusting entitlements under certain orders or agreements made under the Family Law Act 1975, and for splitting future superannuation benefits for the adjustment period that is the 2015/2016 financial year. The determination also provides the method by which the interest rate is calculated for that purpose for an adjustment period that includes a period within that financial year. 

The interest rate for the adjustment period, being the financial year beginning on 1 July 2015, is 5.3 per cent. For information on how to apply the rate to full year, part year and across financial year periods, refer to the determination and its explanatory statement. 

However, this instrument now defers the implementation of 29QC to 1 January 2016. 


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