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Issue 699, 22 February 2019 
In this issue: 

 

Protecting Your Super Package: bill passed by Parliament, consultation on regulations 

The revised Bill to implement the ‘Protecting Your Super’ reforms has now completed its passage through Parliament, and the Government has now commenced a very short consultation on regulations to implement the reforms. 

The Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 (PYS Bill) reforms the circumstances in which insurance can be offered to members, imposes caps and a prohibition on the charging of certain fees, and expands the circumstances in which inactive, low-balance accounts must be transferred to the ATO for consolidation. 

The House of Representatives agreed to extensive amendments made by the Senate (see ASFA Action issue 698), including the removal of provisions that would have made insurance opt-in for members under age 25 and low-balance accounts. The Government has now introduced a separate Bill to progress those reforms (see later item in this ASFA Action). The PYS Bill now awaits royal assent. 

Treasury has this afternoon released a draft of regulations to implement the PYS reforms for a very brief consultation, with submissions closing next Friday, 1 March. The draft regulations address: 

If you have any feedback that you would like ASFA to consider in relation to the draft regulations, please forward it to Byron Addison by close of business, Wednesday 27 February. 

 

 

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

The Government has introduced into Parliament a new bill to progress insurance reforms that were removed from its ‘Protecting Your Superannuation Package’ legislation by the Senate. 

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, that were removed from the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 (PYS Bill) when that Bill was considered by the Senate. The PYS Bill has now been passed by both houses of Parliament, with extensive amendments (refer above item in this ASFA Action, and issue 698). 

The 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. The new measure builds on reforms implemented by the PYS Bill. 

According to the explanatory material: 

The PMIF Bill remains before the House of Representatives, awaiting debate. 

 

 

Fee and cost disclosure: ASIC consultation and reminder re feedback 

As advised in ASFA Action issue 696, ASIC has released a consultation package on proposed changes to the fee and cost disclosure regime for superannuation funds and managed investment schemes. Comments on the consultation package are due by 2 April 2019. 

As part of ASIC’s consultation on the proposed changes, ASIC is holding roundtable meetings in Sydney (4 March) and Melbourne (5 March). Details of the roundtables are available on ASIC’s website. The roundtable meetings are an opportunity to hear ASIC describe their proposed changes and to ask ASIC any questions you may have about their proposals. It is not intended to replace providing a written submission. 

If you have any feedback that you would like to provide to ASFA please forward it to Fiona Galbraith by close of business, Monday 11 March 2019. 

 

 

Status of superannuation bills 

Parliament concluded its current sitting on 21 February and is not scheduled to sit again until 2 April (the date of the Federal Budget). 

As noted above, the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 (PYS Bill) has now been passed by Parliament (with extensive amendments) and is awaiting Royal Assent. The Government has introduced into Parliament the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019(PMIF Bill) to implement provisions making insurance opt-in for members under age 25 and low-balance accounts, that were removed from the PYS Bill by the Senate. The PMIF Bill remains before the House of Representatives, awaiting debate. 

The status of other superannuation-related bills, when Parliament rose, was as follows: 

 

 

Royal Commission: Government, Opposition and ASIC responses 

In the last few days, the Government, Opposition and ASIC have all released detail about their responses to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. 

In particular, the Government has announced that it has given a direction extending the remit of the Australian Financial Complaints Authority’s (AFCA) to consider financial complaints dating back to 1 January 2008, providing expanded access to redress for consumers and small businesses harmed by financial misconduct. This action is being taken in the context of the Commission’s recommendations about establishing a compensation scheme of last resort (recommendation 7.1) but goes beyond that recommendation. 

As a result of the Government’s direction, AFCA will be able to consider disputes dating back to 1 January 2008 (the start of the timeframe considered by the Royal Commission) that have not previously been heard and which fall within AFCA’s current monetary limits and compensation thresholds. AFCA will run a limited consultation regarding required changes to its ules, which will need to be approved by ASIC. AFCA has indicated it will issue guidance prior to 1 July 2019 to explain how impacted individuals can raise their matters, and will consider eligible complaints between 1 July 2019 and 30 June 2020. It is not presently clear what—if any—impact this may have on superannuation-related complaints. 

After making a number of statements about specific recommendations of the Royal Commission, the Opposition has now released a consolidated outline of its proposed responses to each of the 76 recommendations. 

ASIC has issued an outline of its proposed response to the 12 Royal Commission recommendations that are directed at ASIC, or where the Government’s response requires action now by ASIC, without the need for legislative change. ASIC has indicated that it is committed to fully implementing each of these recommendations. The action to be taken by ASIC includes: 

 

 

Superannuation reporting: single touch payroll legislative instrument 

The ATO has made a legislative instrument impacting the reporting of superannuation-related amounts under the Single Touch Payroll (STP) regime. The STP regime provides for mandatory and voluntary reporting of employee payroll and superannuation information by employers to the ATO.  

The ATO has provided an exemption for all employers from a STP requirement, that they report superannuation contribution amounts paid to complying superannuation funds that count toward reducing the employer’s superannuation guarantee liability.   

Since 1 July 2018, the ATO has received information about contributions received by funds directly via funds’ reporting under the Member Account Transaction Service (MATS). As a result of the MATS reporting, the separate STP reporting of contributions by employers was considered unnecessary. The Taxation Administration – Single Touch Payroll – Exemption for Employers from Reporting Contribution Amounts Paid to a Superannuation Fund therefore effectively removes the reporting requirement under STP. 

The instrument is taken to have commenced on 1 July 2018. 

 

 

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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