Issue 795, 4 March 2021
In this issue:
- Two super Bills passed by the Parliament
- Actuaries Institute Survey on Retirement Projections
Two super Bills passed by the Parliament
The Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 and the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 were passed by the Parliament on 25 February 2021.
Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 (Reuniting Bill)
The Reuniting Bill (see ASFA Action issues 731 and 736 for more detail) includes amendments that:
- require eligible rollover funds (ERFs) to transfer the balance of all accounts less than $6,000 on 1 June 2021 to the ATO by 30 June 2021
- the balance of all remaining accounts held by ERFs must be transferred to the ATO by 31 January 2022
- ERFs will be able to voluntarily report and pay the balance of the account to the ATO from 1 June 2021 up until the day when the statement and payment is due
- where the ATO receives an amount from an ERF, it will be able to proactively reunite the ERF amount with a member’s active superannuation account
- applications to operate a new ERF cannot be made from the day after Royal Assent.
Government amendments to the original Bill will allow superannuation funds to voluntarily transfer amounts, including small residual account balances, to the ATO in circumstances where the trustee believes it to be in the best interests of that member.
Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 (No.2 Bill)
The No.2 Bill (see ASFA Action issues 735 and 787 for further background) implements the following Royal Commission recommendations:
- ongoing fee arrangements (recommendation 2.1).
Financial services providers that receive fees under an ongoing fee arrangement will be required to provide clients with a single document each year which outlines the fees that will be charged and the services the client will be entitled to in the following 12 months. Written consent will be required to be obtained before fees under an ongoing fee arrangement can be deducted from a client’s account.
- no deducting advice fees from MySuper accounts (recommendation 3.2)
The No. 2 Bill prohibits a superannuation trustee from charging a fee under an ongoing fee arrangement (fee for personal advice paid for a period over 12 months) to a MySuper product but fees can continue to be charged under a non-ongoing fee arrangement.
- limitations on deducting advice fees from choice accounts (recommendation 3.3)
Superannuation trustees can only charge advice fees to a member if the fee is in accordance with an arrangement that the member entered into, the member has consented in writing to being charged the fee, and the trustee has a copy of the written consent. These conditions will also apply to fees deducted under recommendation 3.2.
The No. 2 Bill will commence from 1 July 2021. A 12-month transitional period for arrangements entered into before 1 July 2021 will apply for arrangements that fall under recommendations 3.2 and 3.3.
The No. 2 Bill received Royal Assent on 2 March 2021.
Actuaries Institute Survey on Retirement Projections
The Actuaries Institute is reviewing how and when superannuation funds use retirement projections to help members better understand their retirement outcomes ahead of possible consultation on this issue by ASIC in April. The Institute is hoping superannuation funds can complete a short survey to obtain funds’ views regarding retirement projections and retirement adequacy measures. This includes an investigation into fund provision of retirement projections directly to their members, as well as whether retirement adequacy measures are employed in funds’ Member Outcome Assessments and strategic planning. Results will be shared at an aggregated level with all participants.
The Actuaries Institute is requesting funds to complete the survey before the close of business Friday 12 March.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
