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Issue 752, 23 April 2020 
In this issue: 

 

COVID-19 Coronavirus: early release of super – APRA data collection and ATO updates 

APRA has launched a new data collection to assess the progress and impact of the Government’s temporary early release of superannuation scheme. 

From next week, registrable superannuation entity (RSE) licensees will be asked to complete and submit APRA’s new Early Release Initiative (ERI) data collection form weekly until further notice. 

The form will gather a range of information from RSE licensees, including the number and value of early release benefits paid to superannuation members and the processing times of those payments. APRA advises this information “will help the Government, APRA and other stakeholders monitor the take-up of the new scheme among superannuation members, and ensure licensees are processing eligible applications in a timely manner”. APRA intends to publish the data at both the industry and fund level. 

APRA has indicated it expects funds to report on a best endeavours basis, but will “implement reporting through a legally binding reporting standard if the response from industry does not meet the objectives of the data collection”. 

The first ERI data collection is due on 29 April, for information as at 26 April. 

The ERI reporting template and some frequently asked questions about the new collection are available on the APRA website. 

The ATO has also issued a number of updates in relation to the early release initiative: 

 

 

COVID-19 Coronavirus: AFCA factsheet about income protection benefits 

The Australian Financial Complaints Authority (AFCA) has released a new factsheet about income protection benefits in superannuation, to address consumers’ frequently asked questions. 

The factsheet is in response to a volume of queries received from consumers—many of whom are out of work due to the COVID-19 pandemic—about whether they can access income protection benefits. 

The factsheet notes that: 

 

 

ASIC superannuation calculators: assumptions updated 

ASIC has updated the assumptions used in the superannuation and retirement calculators on its Moneysmart website. 

ASIC has advised that: 

ASIC will continue to consider its policy framework for setting the longer-term economic and financial assumptions for the Moneysmart superannuation and retirement planner calculators and will keep stakeholders informed. 

For more information on Treasury’s long-term retirement income modelling assumptions, ASIC has referred stakeholders to the 2019 Treasury Research Institute paper Accumulation of superannuation across a lifetime. 

 

 

AFCA: new super lead ombudsman 

AFCA has announced the appointment of a new Lead Ombudsman for superannuation. 

Heather Gray will commence as Superannuation Lead Ombudsman on 18 May. Ms Gray is a highly experienced law firm partner and financial services specialist, whose most recent role was as national superannuation practice leader for Hall & Wilcox. Ms Gray has also spent more than a decade on the Law Council of Australia’s Superannuation Committee, including a term as its chair. 

Ms Gray’s appointment follows the promotion last year of Dr June Smith to the role of Deputy Chief Ombudsman. 

 

 

Government co-contribution regulations: sunsetting deferred 

The Government has deferred the sunsetting (expiry) of regulations to support the payment of the Government co-contribution for low income earners. 

The Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004 were due to sunset on 1 April. On 26 March, the Attorney-General registered the Legislation (Deferral of Sunsetting—Superannuation (Government Co-contribution for Low Income Earners) Regulations) Certificate 2020, to defer the sunsetting of the Co-Contribution Regulations) until 1 April 2022. 

The deferral has been made on the basis it was not possible to complete the legislative instrument necessary to replace the Regulations, for reasons that could not be foreseen and avoided. The explanatory material indicates that this deferral was not related to the COVID-19 Coronavirus pandemic, but rather it was “due to the acceleration of other government commitments in the implementation of recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which will require significant resourcing. This will impact the ability of the Department of Treasury to complete the necessary processes of reviewing and revising the instrument.” 

 

 

Internal audit: draft best practice guidance 

The Institute of Internal Auditors – Australia (IIA-Australia) has released an exposure draft of internal audit best practice guidance for the financial services industry following recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. 

In late 2019 IIA-Australia established a committee made up of ten senior banking, superannuation, insurance and finance industry professionals to address the governance issues raised by the Royal Commission. Observers to the committee included ASIC and APRA. 

The Committee developed the draft guidance, Internal Audit Better Practice Guide for Financial Services Principles and Recommendations Australia. It sets out what is expected of the internal audit function so that boards, audit committees and regulators’ expectations can be met. IIA-Australia is now undertaking a consultation process with the financial services sector, with a view to releasing the final internal audit guidance mid-year. 

If any ASFA member would like to provide feedback on the draft guidance, please forward it directly to IIA-Australia’s Public Affairs Manager, Tony Rasman by close of business 31 May. 

 

 

Design and Distribution Obligations – EOI for a Working Group 

ASIC’s consultation on a draft of guidance for the new financial product design and distribution obligations (DDO) that come into effect in April 2021 closed on 11 March (see ASFA Action issues 732 and 731 for more details). 

ASFA is canvassing member interest in ASFA facilitating a working group to consider implementation challenges and/or concerns with DDO as it applies to registrable superannuation entity licensees. This includes consideration of the final guidance when it is released by ASIC. 

If you would be interested in joining a DDO Working Group, please contact Maggie Kaczmarska by close of business Wednesday 6 May. 

 

 

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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