Issue 529, 26 March 2014
In this issue:
- Bill to delay SG increase and abolish LISC rejected by Senate
- ATO consultation: Division 293 tax and defined benefit contributions
- APRA reporting standards: quarterly reporting dates extended, further consultation and minor revisions
- ASIC/APRA guidance on section 29QC
Bill to delay SG increase and abolish LISC rejected by Senate
On 25 March, the Senate voted against passing the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. In addition to repealing the minerals resource rent tax, the Bill included amendments which would have paused the increase in the Superannuation Guarantee (SG) rate for two years, and abolished the low income superannuation contribution (LISC) for years after 2012-13.
As a result of the Senate’s refusal to pass the Bill – and subject to any action the Government may take to reintroduce the amendments – the current law in relation to these superannuation measures will continue to apply:
- the SG rate will increase from 9.25 per cent to 9.5 per cent for the year commencing 1 July 2014, and then increase by half a percentage point each year until it reaches 12 per cent for years starting on or after 1 July 2019
- the LISC will be payable in respect of concessional contributions made after 1 July 2013.
ATO consultation on draft regulations for Division 293 tax and defined benefit contributions
The Government has released for comment draft regulations and explanatory material prescribing the ongoing methodology for determining defined benefit (DB) contributions for Division 293 tax purposes.
The proposed methodology will apply in respect of the 2013-14 financial year and subsequent years. See ASFA Action Issue 527 for details of recent regulations prescribing an interim methodology for the 2012-13 financial year.
The consultation material can be found on the Treasury website.
Those with an interest in DB matters who would like their comments considered for inclusion in the ASFA submission should provide them to Robert Hodge by Wednesday, 2 April.
APRA reporting standards: quarterly reporting dates extended, further consultation and minor revisions
In two separate letters to Registrable Superannuation Entity (RSE) licensees, APRA has announced a number of important changes to its superannuation data reporting standards.
On 21 March, APRA advised that, in response to feedback regarding implementation issues related to the new reporting requirements, it has decided to defer the implementation dates for some parts of the framework and make changes to some due dates for a transitional period. In particular, RSE licensees should note:
- APRA has temporarily extended the due date for the lodgement of all quarterly forms, from the current 28 calendar days, to 35 business days. This is in response to continued feedback from RSE licensees, highlighting difficulties in providing data to an appropriate quality standard within the 28 calendar day timeframe. This transitional extension will apply for the current reporting period (ending on 31 March), and will continue until the quarterly reporting period ending on 30 June 2015
- APRA has further deferred the application of reporting standards SRS 330.0 Statement of Financial Performance and SRS 533.0 Asset Allocation to select investment options. While APRA had previously indicated that these standards would apply to select investment options from 1 July 2014 at the earliest, this will now be deferred until 1 July 2015. APRA is also proposing to undertake additional consultation on the collection of select investment option data during the second half of 2014
- APRA had previously indicated that it would conduct a joint consultation with the Australian Bureau of Statistics (ABS) regarding the collection of additional data for ABS purposes. The ABS has now indicated that it will postpone implementation of this additional data collection until reporting periods commencing on or after 1 July 2015. Consultation on the proposed additional ABS data collection is expected to occur later in 2014.
More information on these changes can be found on the APRA website.
On 25 March, APRA advised RSE licensees that it has made minor amendments to a number of its reporting standards, effective as of 1 April 2014.
The amendments incorporate clarifications that have been provided through APRA’s publicly released frequently asked questions, and largely affect the instructions for completion of the reporting form. APRA has indicated that these minor amendments will somewhat simplify the superannuation industry’s reporting obligations, but do not impose any new obligations.
The revised reporting standards take effect from 1 April 2014, which means that RSE licensees will be required to comply with these revised reporting standards in respect of reporting periods ending on or after 30 June 2014.
In addition, APRA has indicated that:
- SRS 533.0 (asset allocation) and SRS 702.0 (investment performance), which were originally intended to apply to both MySuper and select investment options, will now apply only to MySuper investment options. APRA is proposing to consult on asset allocation and investment performance reporting for select investment options via separate reporting standards.
- APRA also intends to amend Reporting Standard SRS 001.0 Profile and Structure (Baseline), to clarify issues in the form and instructions that have been reported to APRA since the form commenced in April 2013. Changes to SRS 001.0 will be communicated prior to the next annual submission date of 30 June 2014.
More information on these changes, including a summary of the revisions to the standards, can be found on the APRA website.
ASIC/APRA guidance on section 29QC
ASIC and APRA have issued a joint letter seeking to address industry concern regarding the relationship between the disclosure requirements administered by ASIC, and the data that is required to be reported under APRA’s reporting standards, as a result of section 29QC of the Superannuation Industry (Supervision) Act 1993.
Section 29QC requires that if an RSE licensee provides information calculated in a particular way to APRA under a reporting standard, and they then give the same or equivalent information to another person, including on a website, then the licensee must ensure that this information is calculated in the same way as the information given to APRA.
The purpose behind this requirement is to improve the comparability of information about superannuation products.
The ASIC/APRA letter notes that, although there is express mention of APRA’s reporting standards in section 29QC, ASIC is responsible for the administration of this section. Breaches of this section should be reported to ASIC, and any further action taken as a result of a breach of this section would be taken by ASIC.
The letter provides clarification on the operation of section 29QC in relation to investment performance, return targets, asset allocation, fees and costs, and the provision of additional information. The letter also outlines ASIC’s approach to its administration of section 29QC, noting that ASIC considers asset allocation and return information to be key areas that are critical for transparency and consistency of information.
