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Issue 830, 26 October 2021 
In this issue: 

 

PMIF and PYS: revised APRA FAQs 

APRA has published revisions to its frequently asked questions (FAQs) in relation to the Putting Members’ Interests First (PMIF) and Protecting Your Super (PYS) reforms. 

The updated information clarifies that members who were not required to elect for insurance, as a result of the historical provisions in sections 68AAB and 68AAC of the Superannuation Industry (Supervision) Act 1993, can have their insurance continued in a successor fund without needing to elect for insurance. The Government intends to amend the SIS Act to give effect to this change in due course. 

Sections 68AAB and 68AAC relate to the provision of insurance to fund members with low-balance accounts and members under 25 years old. 

APRA has updated its FAQ pages in relation to PMIF and PYS. 

 

APRA data FAQs 

APRA has published two additional frequently asked questions (FAQs) for registrable superannuation entity (RSE) licensees to provide further guidance on meeting the Reporting Standards for Phase 1 of the Superannuation Data Transformation project. 

This update includes a clarification to an existing FAQ regarding the use of excel files as a submission format. APRA has also archived 20 FAQs that contain guidance on matters that have now been incorporated into the reporting standards. 

 

Member outcomes assessment: new APRA FAQs 

APRA has published a new set of frequently asked questions (FAQs) and an update to an existing FAQ on the outcomes assessment under section 52(9) of the Superannuation Industry (Supervision) Act 1993. 

The new information provides information to RSE licensees about how the outcomes assessment must consider the performance test, and outlines APRA’s expectations on the publication of the outcomes assessment. 

APRA has also updated guidance on how RSE licensees may undertake the outcomes assessment for lifecycle products. 

 

Your Future, Your Super: stapling, choice of fund penalty instruments 

The ATO has made two legislative instruments relevant to an employer’s penalties under the choice of fund provisions, following the commencement of the stapling component of the Your Future, Your Super reforms. 

Under the YFYS reforms, generally employees who do not make a choice of fund when commencing a new employment arrangement from 1 November 2021 will be ‘stapled’ to a single default account. Under stapling, employers request a notification from the Commissioner of Taxation identifying if there is a stapled fund for a new employee. The stapling requirements are contained in the Superannuation Guarantee Administration Act 1992 (SGA Act). (See ASFA Action issues 817 and 810 for background.) 

The ATO has now registered: 

The Commissioner will also have regard to whether there are circumstances to support an increase to the employer’s shortfall.
 

 

Critical infrastructure reforms: Bill substantially amended 

The Government has substantially amended the Security Legislation Amendment (Critical Infrastructure) Bill 2020. The amended Bill, the Security Legislation Amendment (Critical Infrastructure) Bill 2021, was passed by the House of Representatives on 20 October and will now be considered by the Senate. The updated supplementary explanatory memorandum can be found here. See ASFA Action issues 771, 783, 790, 800 and 827 for further background. 

As reported in recent ASFA Actions, the Bill will amend and build on the existing regulatory regime created by the Security of Critical Infrastructure Act 2018 (the Act) to enhance security and resilience of critical infrastructure assets. This will include introducing the concept of a ‘critical superannuation asset’. 

The amendments address some of the recommendations made by the Parliamentary Joint Committee on Intelligence and Security (PJCIS) in its Advisory Report on the Security Legislation Amendment (Critical Infrastructure) Bill 2020. 

As outlined in the supplementary explanatory memorandum the amendments would: 

Preventative measures and the design of the Risk Management Programs, Systems of National Significance and Enhanced Cyber Security Obligations will be proposed in a separate Bill that the Government intends to bring back to the Parliament for consideration at a later date. 

 

Royal Commission implementation: Better Advice Bill

A Bill to support reforms in relation to financial advisers, introduced as part of the Government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, completed its passage through Parliament on 21 October without amendment. 

As reported in ASFA Action issue 817, the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021  proposes to: 

The Bill is now awaiting Royal Assent. 

 

Virtual and hybrid meetings and electronic document execution: Bill introduced 

The Government has introduced into Parliament a Bill to make permanent relief provided on a temporary basis, as a result of the COVID-19 pandemic, allowing companies to use technology to meet certain requirements under the Corporations Act 2001 around meetings and documents. 

The Corporations Amendment (Meetings and Documents) Bill 2021 includes amendments to: 

The amendments to be made by the Bill will apply to meeting-related documents sent and meetings held on or after 1 April 2022, and to documents executed on or after the day after the Bill receives Royal Assent. The current temporary relief will remain in place until 31 March 2022. 

As reported in ASFA Action issue 819, the relief measures are not specific to superannuation but will be relevant to the way superannuation trustee companies discharge their general obligations under the Corporations Act. 

The Bill has been referred to the Senate Economics Legislation Committee for inquiry and report by 18 November. The Committee is seeking submissions by close of business 8 November. 

An exposure draft of the Bill was the subject of consultation in September (see ASFA Action issue 822). 

 

Australian Corporate Bond Market: Parliamentary Committee report 

The House of Representatives Standing Committee on Tax and Revenue has released its report into the Australian corporate bond market entitled The Development of the Australian Corporate Bond Market: A Way Forward. 

The Committee has made a number of recommendations the primary aim of which is to remove barriers to the issuance of corporate bonds as well as raising awareness about the benefits of corporate bonds for investors and issuers. 

Of particular relevance to superannuation is recommendation 12: The Committee recommends that the Australian Government investigate options to remove barriers inhibiting the investment of superannuation in the Australian corporate bond market. 

 

Closure of SCT: transitional provisions Bill 

As reported in ASFA Action issue 821, the Government has introduced into Parliament a Bill containing transitional provisions addressing the closure of the Superannuation Complaints Tribunal (SCT) and its replacement by the Australian Financial Complaints Authority (AFCA) as the external dispute resolution body for superannuation. 

The Treasury Laws Amendment (2021 Measures No. 7) Bill 2021: 

The Senate Economics Legislation Committee recently held an inquiry focused on other aspects of the Bill and recommended that it be passed. 

The Bill has now been passed by the House of Representatives and awaits debate in the Senate. 

 

 

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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