Issue 548, 26 September 2014
In this issue:
- ASIC consultation on fees and costs disclosure
- Raising superannuation issues with the ATO
- Treasury consultation on involuntary rollovers
- Treasury consultation on CGT exemption for compensation and insurance
- APRA reporting: consultation on SRF 711.0 SuperStream reporting
ASIC consultation on fees and costs disclosure
ASIC is seeking industry feedback to clarify key fee and cost disclosure requirements for superannuation products and managed investment products.
In particular, ASIC is seeking feedback and comments on proposed technical amendments to Schedule 10 of the Corporations Regulations 2001, which aim to clarify the requirements for:
- indirect costs, double counting and fee issues for superannuation products
- the disclosure of costs associated with investing through interposing entities by managed investment products
- the appropriate application of the consumer advisory warning for some products.
This follows on from ASIC’s Report 398 Fee and cost disclosure: Superannuation and managed investment products, released in July 2014, which highlighted a number of issues around disclosure of fees and costs.
ASIC has provided ASFA with a copy of a background paper outlining its proposed technical amendments to Schedule 10, as well as a draft of the Class Order ASIC is intending to issue to give effect to the amendments.
We welcome member feedback to assist us in preparing our response – please email Julia Stannard if you would like a copy of the discussion paper and draft class order. We would appreciate receiving any feedback, via email, by Close of Business (COB) Monday 6 October (or alternatively, the draft class order can be obtained by emailing ASIC directly on feeandcostdisclosure@asic.gov.au, and comments can be made directly to ASIC by 17 October).
Treasury consultation on involuntary rollovers
Treasury is consulting on the former government’s Mid-Year Economic and Fiscal Outlook 2012-13, announcement that a tax integrity rule will not be triggered when superannuation benefits are rolled over to another fund as part of a merger between funds. The aim of the draft legislation and explanatory memorandum is to provide greater certainty for superannuation fund mergers.
In brief, the proposed change, with respect to involuntary transfers of members’ interests in a fund merger situation, will:
- Enable the amount of the contributions segment and the crystallised segment of an individual’s superannuation interest in the old fund to be retained in the new fund rather than being capped at the value of the transferred benefit.
- Ensure that, an accumulation member’s contributions segment in the new plan will include an amount equal to the contributions and crystallised segment in the original plan immediately before the involuntary roll payment.
- Ensure that for an income stream interest, the proportions of the tax free and taxable components of the income stream commenced in the new plan are the same as the income stream in the original plan.
- Remove the requirement for transferring superannuation plans to give a rollover superannuation benefit statement to the member.
The consultation documents are available from the Treasury website.
Members wishing to have their comments considered for inclusion in an ASFA submission should provide them to Robert Hodge by COB on Thursday 9 October (or alternatively, comments can be made directly to Treasury by 20 October).
Treasury consultation on CGT exemption for compensation and insurance
The Treasury has released for comment exposure draft legislation and a draft explanatory memorandum gives effect to minor amendments to the operation of the capital gains tax (CGT) provisions in the Income Tax Assessment Act 1997.
The measure ensures a CGT exemption is available to trustees and beneficiaries who receive compensation or damages for certain insurance policies and will ensure that the CGT exemption available to a trustee of a superannuation entity covers insurance policies related to injuries or illness.
The consultation documents are available from the Treasury website.
Members wishing to have their comments considered for inclusion in an ASFA submission should provide them to Robert Hodge by COB on Thursday 9 October (or alternatively, comments can be made directly to Treasury by 21 October).
APRA reporting: consultation on SRF 711.0 SuperStream reporting
As advised earlier this year, APRA has recommenced consultation on the content of SRF 711.0. The consultation is only with industry associations.
ASFA members with views on this matter and who wish to assist ASFA in the development of a proposal for a more pragmatic approach to SuperStream reporting should contact Robert Hodge before 1 October.
Raising superannuation issues with the ATO
Following requests from the industry, the ATO has created a process map for raising superannuation issues with the ATO.
The map provides two ways to raise issues, depending on whether the issue is an ‘interpretive issue’ or a ‘superannuation industry issue’. The map includes definitions to help you to determine the type of issue you wish to raise.
The ATO advises that if you send your query to the wrong mailbox, they will redirect it to the correct area. We understand that the map will shortly be placed on the ATO website.
ASFA has requested that a similar map be developed for SuperStream issues.
