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Issue 683, 24 August 2018 
In this issue: 

 

Royal Commission superannuation hearings: issues and questions arising 

The Royal Commission into misconduct in the banking, superannuation and financial services industry has now concluded its fifth round of hearings, which focused on superannuation. 

In his closing statement, Counsel Assisting the Commission Mr Michael Hodge QC made a number of observations in relation to issues arising from the hearings. These included that the evidence may suggest: 

Against these overarching issues, Counsel Assisting identified some specific questions to assist parties in preparing for written submissions: 

  1. Are there structures that raise inherent problems for a superannuation trustee being able to comply with its fiduciary duties? 
  2. If these structures do raise inherent problems, is structural change of entities, mandated by legislation or otherwise, desirable? 
  3. Apart from structural arrangements, are there other types of relationships that present obvious challenges to a trustee discharging its duties or where the benefits to the member of those relationships are limited or non-existent? If so, would it be appropriate to make legislative intervention? 
  4. Is it necessary to strengthen existing laws prohibiting misconduct so as to address potential misconduct identified during the hearings, or is it simply necessary to enforce the existing laws? 
  5. What can be done to encourage the regulators to act promptly on misconduct/potential misconduct, and is the present allocation of regulatory roles appropriate to achieve specific and general deterrence of misconduct? Are either of the regulators best placed to carry the responsibility to protect consumers and should the balance between them be restructured or significantly altered? 
  6. Are there further structural tweaks necessary to make it more likely that consumer interests will be best served in the superannuation industry? 

These issues and questions will be refined and developed further in written submissions by Counsel Assisting to the Commission, which will be published on the Commission’s website by 5pm Friday 24 August. 

The Commission will take submissions from interested parties on these issues and questions until Friday 21 September. 

If you have any feedback that you would like ASFA to consider in relation to these matters, please forward it to Julian Cabarrus by close of business Friday 7 September. 

 

 

APRA: prudential framework post-implementation review: consultation reminder 

As mentioned in ASFA Action issues 672, 679 and 681, APRA is currently consulting as part of a post-implementation review of the prudential framework―prudential and reporting standards―implemented as part of the Stronger Super reforms. 

As part of this consultation, APRA has issued an overarching discussion paper and six ‘short topic papers’ on: 

Submissions on all papers are due to APRA by 26 September. 

If you have any feedback you would like ASFA to consider including in a response to APRA, please forward it to Fiona Galbraith by close of business Wednesday 12 September. 

 

 

AFCA: membership webcast 

The Australian Financial Complaints Authority (AFCA) is holding a webcast on membership of AFCA, which may be particularly relevant for superannuation trustees that are not already members of the Financial Ombudsman Services. 

A panel of AFCA staff will step through the key aspects of AFCA membership: 

Attendees will have the opportunity to submit questions both before and during the webcast. 

The webcast will be held from 1.30 – 3.00pm, Tuesday 28 August. 

If you are interested in attending, please register directly via this link through the AFCA website. 

A recording of the webcast will subsequently be made available on the AFCA website. 

 

 

First home super saver scheme: ATO Ruling 

The ATO has published a ruling to provide guidance on the First Home Super Saver Scheme (FSS scheme). 

The FHSS scheme allows eligible individuals who make voluntary contributions into superannuation from 1 July 2017 to withdraw those contributions (up to limits) and associated earnings for the purpose of purchasing a first home. 

Law Companion Ruling LCR 2018/5 – First home super saver scheme covers topics including eligibility for the FHSS scheme, eligible contributions and withdrawals. It also addresses obligations following the release of money under the scheme and the penalty tax that applies where the conditions of the scheme are not met. 

 

 

APRA governance: bill passed 

A bill to strengthen APRA’s governance arrangements by allowing for the appointment of a second deputy chair has been passed by Parliament without amendment (see ASFA Action issues 674 and 672 for background). 

The Treasury Laws Amendment (APRA Governance) Bill 2018 was passed by the Senate on 16 August and has received Royal Assent. 

The Government has confirmed its previous nomination of John Lonsdale, the former Treasury deputy secretary, as the second deputy chair of APRA. 

 

 

2018 National Financial Capability Strategy 

ASIC has launched the 2018 National Financial Capability Strategy. The Strategy aims to help Australians better control their financial lives by improving their skills in managing money day to day, making informed decisions and planning for the future. 

ASIC noted that while strengthening financial capability takes time, the benefits are significant. Chair James Shipton emphasised the importance of programs delivered under the National Strategy. “The 2018 National Financial Capability Program drives programs and initiatives that make a difference in people’s lives. We want more Australians to access information and guidance they can trust to ensure everyone can make informed decisions.” 

Mr Shipton also reiterated ASIC’s commitment to financial inclusion and better outcomes for all Australians: 

“People are at the heart of the financial system and at the centre of this National Strategy. The financial sector as a financial community should be engaging in practices that promote fair consumer outcomes. In particular, we need to continue to encourage women to be more confident with money, young people to find the information they need when they need it, and support Indigenous Australians to access appropriate financial products and services. We want to see more Australians in control of their financial lives and I look forward to working collaboratively under the 2018 National Strategy to advance this important work”. 

 

 

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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