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Issue 721, 23 September 2019 
In this issue: 

 

Putting Members’ Interests First Bill: Passed by the Parliament 

The Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 (PMIF Bill), which seeks to implement provisions making insurance opt-in for members under age 25 and low-balance accounts, was passed by both Houses of Parliament on 19 September 2019 (see ASFA Action issues 699, 715 and 717 for further background information). 

Two significant amendments were made to the PMIF Bill in the Senate: 

A trustee may elect that members are covered by the dangerous occupation exemption if those members are employed in an occupation specified in the election and a Fellow of the Institute of Actuaries of Australia has certified that based on rates of death, or death and total permanent disability, the occupation is in the riskiest quintile of occupations in Australia. 

An election to apply the dangerous occupation exemption must be made in writing and a copy must be published on the trustee’s website and given to APRA. 

If you have any questions about the PMIF Bill please contact Byron Addison, Senior Policy Advisor. 

 

 

Partial superannuation guarantee opt-out 

As mentioned in ASFA Action issue 717, the Government had re-introduced into Parliament amendments to implement a partial opt-out from Superannuation Guarantee (SG) for eligible individuals with multiple employers. 

An individual who has multiple employers will be able to apply to the ATO for an SG exemption certificate, exempting an employer from SG liability for a particular quarter. A certificate can only be issued by the Commissioner of Taxation where a number of conditions are met, including: 

The amendments, contained in the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019, has now passed both Houses of Parliament. It will apply for SG quarters commencing on or after 1 July 2018. 

The partial opt-out was announced in the 2018-19 Budget (see ASFA Action issue 669) and is intended to reduce the likelihood of an individual inadvertently breaching their non-concessional contributions cap as a result of receiving mandated SG contributions from multiple employers. The explanatory material to the Bill notes that instead of receiving SG contributions, an individual who has taken advantage of the partial opt-out may negotiate with their employer to receive additional cash or non-cash remuneration. 

The amendments were previously included in the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018, which lapsed when Parliament was prorogued ahead of the Federal Election. (See ASFA Action issue 672 for background.) 

 

 

Integrity amendments for 2016-17 Budget reforms 

As mentioned in ASFA Action issue 717, the Government had re-introduced into Parliament amendments to support the integrity of the reforms introduced in the 2016-17 Budget. 

The measures, contained in the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 and having passed both Houses of Parliament: 

The amendments apply to borrowings arising under contracts entered into on or after 1 July 2018. They do not apply to borrowings arising under a contract that was entered into prior to 1 July 2018, or to refinancing of the outstanding balance of borrowings arising under contracts entered into prior to 1 July 2018. 

These amendments were announced in the 2017-18 Budget and were previously included in the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018. That Bill lapsed when Parliament was prorogued ahead of the Federal Election. (See ASFA Action issue 672 for background.) 

 

 

Design and distribution obligations: consultation on regulations 

Treasury has released a draft of regulations to support the recently introduced ‘design and distribution’ obligations on financial services providers. 

The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 introduced new requirements on financial services providers, intended to ensure that financial products are appropriately targeted and sold to consumers (see ASFA Action issues 704 and 686 for background). 

Treasury consulted on an earlier draft of regulations to support the reforms late last year (see ASFA Action issue 689), and has now released an updated draft which reflects amendments made as the legislation passed through Parliament. 

The draft regulations extend the design and distribution obligations to apply to some additional products and persons. Importantly for superannuation, the draft regulations also exclude from the obligations interests in eligible rollover funds and defined benefit interests. 

Treasury is seeking submissions by 11 October. 

The draft regulations extend the design and distribution obligations to apply to some additional products and persons. Importantly for superannuation, the draft regulations also exclude from the obligations interests in eligible rollover funds and defined benefit interests. Treasury is seeking submissions by 11 October. 

 

 

Naming of firms in published AFCA determinations 

As outlined in ASFA Action issue 719, ASIC recently approved changes to the governing rules of the Australian Financial Complaints Authority (AFCA), to allow AFCA to name financial firms—including APRA-regulated superannuation funds—in its published determinations. 

AFCA has now published its updated rules on its website, confirming that it will start naming financial firms in determinations from 1 October. AFCA has also updated its operational guidelines to explain the changes in more detail. 

 

 

ASIC legislative instrument: departed former temporary residents 

ASIC has remade the instrument about departed former temporary residents’ unclaimed superannuation disclosure. The new instrument, ASIC Corporations Unclaimed Superannuation – Former Temporary Residents 2019/873, will continue to provide relief from the requirement to notify and give exit statements to departed former temporary residents when their superannuation benefits are paid to the Australian Taxation Office (ATO) under Part 3A of the Superannuation (Unclaimed Moneys and Lost Members) Act 1999. 

The relief is conditional on specified information for temporary residents being included in any product disclosure documentation and on the fund’s website and the trustee providing reasonable assistance as soon as practicable (an in any event within one month) if the former temporary resident asks the trustee about their interest in the fund. 

A minor policy change was made in the instrument to shift the location for the website disclosure from the trustee website to the fund website. 

 

 

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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