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Issue 878, 15 November 2022 
In this issue: 


Successor fund transfer planning: APRA consultation on proposed enhancements 

APRA  has released a Discussion Paper on proposed measures to enhance planning by superannuation trustees in the event they need to transfer members out of – or into – their fund. The proposals are aimed at ensuring trustees prepare for, manage and execute successor fund transfers (SFTs) more smoothly and efficiently. 

The proposals have been prompted by a period of heightened transfer activity in the industry, which has been amplified by APRA’s focus on combating underperformance through measures including the annual performance test and heatmaps. 

To ensure SFTs achieve better outcomes for members, APRA has proposed updating the prudential framework to introduce new requirements: 

APRA will also look to strengthen and simplify the transfer planning guidance contained in Prudential Practice Guide SPG 227 Successor Fund Transfers and Wind-ups. 

If you have any feedback you would like ASFA to consider in relation to the Discussion Paper, please forward it to Fiona Galbraith  by close of business Friday 10 February. 


Financial resources for risk events in superannuation: APRA consultation 

APRA has released a Discussion Paper on proposed changes to improve how superannuation trustees manage financial resources to protect members from poor operational risk event outcomes. 

The Discussion Paper proposes replacing the existing Prudential Standard SPS 114 Operational Risk Financial Requirement with enhanced obligations for trustees. These include: 

At the core of the enhanced requirements will be a two-tiered model, consisting of:  

If you have any feedback you would like ASFA to consider in relation to the Discussion Paper, please forward it to Fiona Galbraith  by close of business Friday 17 February. 

Information provided in response to the Discussion Paper will inform revisions to the prudential framework, with consultation on the draft standard and guidance expected to commence in mid-2023. 

The Discussion Paper follows an earlier round of consultation on the current and emerging approaches for RSE licensees to maintain the financial resilience needed to protect members’ best financial interests (see ASFA Action issue 834). 


Financial Counselling Industry Funding Model: DSS Consultation 

The Department of Social Services (DSS) has announced a public consultation on the Financial Counselling Industry Funding Model. 

The proposed industry funding model will collect and distribute voluntary contributions from industry to address unmet demand for financial counselling services. The model is anticipated to commence 1 July 2023. 

The Discussion Paper recommends contributions for financial services – currently that does not include superannuation, but the Discussion Paper does refer to superannuation as a sub-sector and notes that 2.39 per cent of financial counsellors’ time can be traced to a superannuation. 

The Discussion Paper outlines the proposed design of the model, informed by previous consultations with industry and financial counselling sector stakeholders. Feedback is being sought on discussion questions covering: 

 In addition to the discussion paper, the DSS will hold a range of consultation activities including targeted roundtables with subsectors that are the focus on the proposed model. 

The DSS is seeking feedback by close of business Friday 16 December. 


National Housing Infrastructure Facility: consultation on widened remit 

Treasury has conducted a very brief consultation on amendments to broaden the remit of the National Housing Infrastructure Facility (NHIF), to provide flexibility for NHIF financing to be used to attract more private capital into the social and affordable housing sector, including from superannuation funds and other institutional investors. 

The proposed amendments to the National Housing Finance and Investment Corporation Investment Mandate Direction 2018: 

The proposed amendments were open for consultation between 8 and 14 November. 


Increased penalties for serious data breaches: Bill progress 

As reported in ASFA Action issue 876, the Government has introduced into Parliament the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022. The Bill to proposes significant increases to the maximum penalties for serious or repeated privacy breaches, as well as enhancements to the enforcement powers of the Australian Information Commissioner and the information sharing powers of the Commissioner and the Australian Communications and Media Authority. 

The Bill has been passed by the House of Representatives without amendment and is awaiting introduction into the Senate. 


Increase in penalty unit: Bill introduced 

The Government has introduced into Parliament a Bill to increase the amount of a Commonwealth penalty unit from $222 to $275, as announced in the Budget on 25 October (see ASFA Action issue 875).  

The increase, set out in the Crimes Amendment (Penalty Unit) Bill 2022, will apply to offences committed on or after 1 January 2023. The value of a penalty unit will continue to be indexed every three years to the Consumer Price Index, under current arrangements. 


ASIC industry funding model: legislative instruments 

ASIC has registered two legislative instruments relevant to its industry funding model: 


Objective and taxation of superannuation 

The Assistant Treasurer and Minister for Financial Services, Stephen Jones MP, has confirmed  that the Government intends to legislate the objective of superannuation, before ‘having a conversation’ about superannuation tax concessions. 

In a speech to the AFR Wealth and Super Summit last week, Mr Jones noted that the tax treatment of superannuation has been the topic of public conversation: 

“We need this conversation to continue. 

But we cannot put the cart before the horse. 

We will consult widely to inform a common, agreed objective for super. 

Australians need to have their say. 

With an objective that is settled, we can talk sensibly about tax. 

Those who support the status quo will need to demonstrate how concessional tax arrangements for high balance super funds meet the common objective. 

Those who argue for change will need to show how that approach meets the objective. 

And the millions of fund members watching and participating in the debate will know it is framed around their interests and their dignity in retirement. 

By having this national conversation, governments now, and into the future, will be held accountable for the stewardship of our system for the next 30 years and beyond.” 




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

and other regulatory announcements relevant to superannuation.

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