Issue 761, 24 June 2020
In this issue:
- COVID-19 Coronavirus: APRA COVID-19 Pandemic Data Collection
- COVID-19 Coronavirus: updated ASIC FAQs
COVID-19 Coronavirus: APRA COVID-19 Pandemic Data Collection
In ASFA Action issues 759 and 760 we advised that APRA was proposing a new COVID-19 Ongoing Data Collection, with details to be released this week.
This morning APRA wrote to registrable superannuation entity (RSE) licensees about the data collection, which has now been renamed the COVID-19 Pandemic Data Collection (PDC).
The letter explains that the purpose of the PDC is to:
- provide APRA with enhanced data surrounding the early release of superannuation, enabling analysis of impacted demographics
- provide APRA and ASIC with monthly data on complaints, member accounts with insurance that have been cancelled, insurance claim activity and intra-fund advice provided
- provide APRA with quarterly data on investment options, foreign currency exposure and hedging, and member switching
- allow APRA to understand the impact of the COVID-19 pandemic on the superannuation industry and provide reporting to the Government and other agencies.
The PDC comprises two components:
- Monthly reporting, which will cover information in relation to complaints, insurance, advice and operational resilience. The initial lodgment for the monthly information is due on 31 July 2020 and will cover the period of April 2020 through June 2020. Going forward, this information will be due 15 business days following the end of the month.
- Quarterly reporting, which will cover information on liquidity, early release demographics and, in addition, a one-off collection of insurance cancellations relating to the Protecting Your Super reforms. The initial lodgment for the quarterly information will also be due on 31 July 2020. Going forward, this information will be due 15 business days following the end of the quarter.
APRA has made a PDC reporting collection template available for reference purposes, however the PDC will be collected via Direct to APRA (D2A). APRA will advise submitting entities when D2A is ready for PDC collection (expected to be early July).
The letter indicates that, at this time, APRA intends to only publish the data collected through the PDC at the industry level on a monthly or quarterly basis.
APRA will hold a webinar in early July on the PDC, with details to be provided shortly. APRA is also seeking feedback on the PDC—including about any difficulties funds may encounter in implementing the PDC in the timeframes required—to covid19superdata@apra.gov.au.
The PDC will continue until issues that are being faced by RSE licensees relating to the COVID-19 pandemic have abated. In this regard, a review of the continued need for the PDC will occur in late September 2020.
COVID-19 Coronavirus: updated ASIC FAQs
ASIC has updated its frequently asked questions (FAQs) addressing current superannuation regulatory issues that have arisen from the COVID-19 pandemic.
ASIC has updated FAQ 2D to reflect the revised timetable of ongoing work released on 11 June (see ASFA Action issue 759).
ASIC has also added new FAQ 1F, indicating its expectations of how trustees should communicate with their members about the Government’s temporary reduction to the minimum drawdown rates for superannuation pensions for the 2020-21 financial year. ASIC’s response is as follows:
Trustees should contact affected members directly with clear information about the changes and the trustee’s implementation approach.
Members in retirement phase need to understand how the halving of the minimum drawdown rates will impact them in light of:
- their current drawdown instructions; and
- the trustee’s implementation approach.
This communication is important because:
- an unexpected change to pension payments can cause members financial and emotional distress;
- without the right information members may miss out on an opportunity to decrease their pension payments when this would suit them best.
It is especially important that any communications are timely, to enable members to make an informed decision about their financial needs for the 2020-21 financial year. Generally, trustees would be obliged to send a significant event notice to members as a result of the change to the minimum drawdown rates.
Trustees should provide affected members with a clear, factual explanation of:
- the changes to minimum drawdown rates;
- the member’s current drawdown instructions;
- what will happen to the member’s pension payments in the 2020-21 financial year if the member takes no action; and
- how members can change their current drawdown instruction, if they wish to.
Trustees also need to consider whether their processes for engaging with members about and accepting new drawdown instructions have sufficient capacity to meet member needs in a timely and effective way.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
