Issue 708, 16 May 2019
In this issue:
- Complaints handling: ASIC consultation
- Protecting your super: APRA and ATO guidance and expectations
- Approved audit report form for superannuation funds
Complaints handling: ASIC consultation
ASIC has released a consultation package on reforms to standards about how financial firms—including superannuation trustees—handle consumer complaints. The proposed standards are intended to improve the way that consumer complaints are dealt with across the financial system and make firms’ complaints handling performance transparent.
The proposed reforms follow on from the Ramsay Review of the financial services dispute resolution framework and the commencement of the Australian Financial Complaints Authority (AFCA) as the external dispute resolution body for financial services, including APRA-regulated superannuation funds.
The consultation covers:
- proposed updates to ASIC’s internal dispute resolution (IDR) standards (currently set out in Regulatory Guide 165 Licensing: Internal and external dispute resolution)
- the proposed framework for mandatory IDR data reporting by financial firms to ASIC.
Some key elements of the new standards that ASIC is seeking feedback on include:
- maximum time frames for responding to a complaint – including a reduction in the IDR timeframe for superannuation complaints from the current 90 days to 45 days
- what constitutes a ‘complaint’
- setting clear standards about what should be in written reasons for decisions
- strengthening the requirement that firms take a systemic focus to complaints handling
- the details of the new framework for reporting of complaints data to ASIC.
If you have any feedback that you would like ASFA to consider including in its response to ASIC, please forward it to Julia Stannard by close of business Friday, 12 July.
ASIC will commence a separate consultation on the publication of IDR data in early 2020.
Protecting your super: APRA and ATO guidance and expectations
APRA and the ATO have each released material providing guidance and outlining their expectations on trustees in relation to the Protecting Your Super (PYS) reforms.
APRA has written to all registrable superannuation entity (RSE) licensees to highlight a number of issues in relation to implementation of PYS. The letter states that APRA:
- considers the reforms to be an important step in improving member outcomes across the entire superannuation industry, particularly for those members with low account balances
- expects that RSE licensees will implement the reforms in ways that promote the outcomes the reforms are seeking to achieve and reflect the obligation to act in members’ best interests.
APRA has encouraged RSE licensees to take note of ASIC’s 2 April letter to industry and its expectations that communication with members about the reforms will be balanced, factual and consumer focused (see ASFA Action issue 704), and published by the ATO.
The letter also indicates that APRA:
- has written specifically to RSE licensees authorised to provide an Eligible Rollover Fund (ERF) on the implications of the fee caps and the ATO account sweep on the future viability of ERFs, and the capacity of RSE licensees of ERFs to meet their fiduciary duties to members
- expects all RSE licensees to review their policies governing the transfer of accounts to ERFs and determine whether these policies remain in the best interest of members
- expects that in undertaking any account transfers, including successor fund transfers, RSE licensees consider the implications of these transfers for the ATO account sweep under the PYS reforms to ensure that account consolidation is not averted or delayed, contrary to the best interest of members.
APRA has also published some Frequently Asked Questions to provide general guidance on the PYS reforms and has established a dedicated email address, PYSP@apra.gov.au, to which any specific implementation questions can be directed. RSE licensees are also encouraged to raise any issues with their APRA Supervisor.
The ATO recently wrote to trustees to provide an update on the PYS measure requiring inactive low-balance accounts to be transferred to the ATO for consolidation. The ATO has now published CRT 030/2019, highlighting the publication on its website of the following materials:
- Q&A document: the ATO has maintained an issues log to record the questions and issues raised and its response or resolution
- draft member authorisation form and instructions: Members are able to provide a written notice to the ATO, declaring they are not a member of an inactive low-balance account. Members may authorise funds to provide the written notice to the ATO on their behalf. To assist funds where members want to authorise them to provide the written notice, the ATO has produced a member authorisation form and also answered key questions on the declaration process.
The ATO has also advised that until changes can be introduced in a new version of the SuperStream rollover message, the interim reporting solution for the low balance inactive accounts measure will be for funds to use the existing code P ‘Insoluble lost member account ’ in the current USM message/statement to report ‘inactive low balance accounts’.
Approved audit report form for superannuation funds
APRA has updated the approved audit report form for superannuation funds for reporting periods ending on or after 30 June 2019.
According to APRA, the form has been updated to:
- reflect language recommended by the Auditing and Assurance Standards Board
- include a greater focus on ‘controls’ in Part 3B of the Form, now titled ‘Controls and Compliance’.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
