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Issue 858, 5 July 2022 
In this issue: 

 

Climate and sustainability disclosures: ISSB consultation 

The International Sustainability Standards Board (ISSB) has published two draft global sustainability reporting standards (Exposure Drafts) for consultation: 

ASIC has encouraged all relevant stakeholders to respond to the consultation. ASIC’s Deputy Chair Karen Chester said: 

“The publication of the Exposure Drafts is a major step towards setting global sustainability and climate-related disclosure standards. The ISSB has worked at pace to meet the urgent demand for transparent and comparable reporting on sustainability and climate-related matters. Consistent, comparable and relevant information is critical for investors to make fully informed decisions here. 

It’s important that Australian companies and stakeholders more broadly  investors, other reporters, advisors and assurers participate in the ISSB consultation to establish these standards as ‘a global baseline’. The ISSB offers alternative consultation options, you can complete a survey or submit a comment letter. Australian stakeholder feedback is essential to ensuring the ISSB’s final standards are appropriate and workable for our market and economy. 

Should the Exposure Drafts be adopted internationally, they will inevitably impact Australia’s capital markets and participants, as investors continue to demand comparable sustainability and climate-related corporate disclosures.” 

Stakeholders can submit responses to the ISSB by participating in a survey or submitting a comment letter by close of business Friday 29 July. Alternatively, stakeholders may make submissions to the Australian Accounting Standards Board (AASB) by close of business Friday 15 July. The AASB is consulting on the ISSB Exposure Drafts, to provide feedback to the ISSB and gather information on how the proposals might operate in the Australian environment. 

 

Impact of choice reforms on DB funds: APRA consultation 

APRA is consulting to identify any unintended impacts that recent amendments to the choice of fund regime may have had on defined benefit (DB) funds. 

The Treasury Laws Amendment (Your Superannuation, Your Choice) Act 2020 (Your Choice Act) amended the choice of form regime in the Superannuation Guarantee Administration Act 1992 (SGA Act). In particular, the amendments require that where employers make contributions for employees under workplace determinations or enterprise agreements made on or after 1 January 2021, they must provide those employees with choice of fund. Prior to the amendments, employers did not have to provide choice of fund to employees where contributions were made for an employee under a workplace determination or enterprise agreement, regardless of when the determination or agreement was made. The amendments extended the circumstances in which choice of fund must be offered to employees and enabled more employees to choose a superannuation fund.  

Failure to comply with the choice of fund requirements in respect of an employee (other than in limited circumstances) attracts a penalty increase to the individual superannuation guarantee (SG) shortfall. The SGA Act was amended to clarify the limited circumstances where employers would not have an increased individual superannuation guarantee shortfall for failing to provide choice of fund to certain members of a DB scheme. 

The Your Choice Act requires APRA to conduct a review to identify any unintended consequences of the amendments to the SGA Act on the operation of DB schemes, including the ongoing viability and profitability of DB schemes, and consider whether any amendments are necessary to rectify any unintended consequences identified by the review. 

APRA has written to registrable superannuation entity (RSE) licensees of DB funds seeking their views on the amendments. The letter seeks specific responses to 13 questions about the impacts of the amendments on individual DB schemes. 

APRA is seeking feedback from the RSE licensees of DB funds by close of business Thursday 8 September. 

 

Retirement income estimates and calculators: new ASIC relief and guidance 

As reported in ASFA Action issues 834 and 849, ASIC has recently consulted on proposals to update its long-standing conditional relief from licensing, conduct and disclosure obligations for the provision of retirement estimates and superannuation calculators (collectively referred to as ‘superannuation forecasts’). 

In March, ASIC temporarily extended its relief, issuing ASIC Corporations (Repeal and Transitional—Relief for Providers of Retirement Estimates) Instrument 2022/204. ASIC also indicated at that time that it planned to issue a further instrument in June setting out its updated relief. 

ASIC has now registered ASIC Corporations (Superannuation Calculators and Retirement Estimates) Instrument 2022/603 to set out new conditional relief requirements, including the use of revised standard assumptions for inflation rates that must be used as the defaults. Instrument 2022/603 commenced on 1 July, however trustees and other providers can continue to provide superannuation forecasts under the previous relief arrangements while they transition to the new framework, until 31 December 2022. ASIC has also released a new regulatory guide RG 276Superannuation forecasts: Calculators and retirement estimates to explain what providers need to do in order to rely on the relief set out in Instrument 2022/603. 

ASIC has also registered ASIC Corporations (Amendment) Instrument 2022/604. This removes relief for superannuation or retirement calculators from ASIC’s previous relief instruments with effect from 1 January 2023. 

 

APRA supervisory levies for 2022-23 

The Government has determined the supervisory levies to be collected from APRA-regulated entities, including superannuation entities, for 2022-23. 

The levies recover the operational costs of APRA as well as other specific costs incurred by certain Commonwealth agencies and departments. These include: 

As relevant to APRA-regulated superannuation entities, the Australian Prudential Regulation Authority Supervisory Levies Determination 2022  imposes the following levy amounts and rates: 

Amount of levy 

Entity  Maximum restricted levy amount ($)  Minimum restricted levy amount ($)  Restricted levy percentage  Unrestricted levy percentage 
Pooled superannuation trust  400,000  10,000  0.00229  0.001019 
Small APRA fund or single member approved deposit fund  590  590  0.0  0.0 
Other superannuation entity  800,000  10,000  0.00459  0.002989 

 

Market linked income streams – halving of drawdown rate: social security instrument 

The Government has registered the Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Amendment (Minimum Amount) Principles 2022. 

The effect of this instrument to extend by a further year the halving of the minimum draw-down rate for market linked income streams, to allow the income stream to remain asset test exempt for social security purposes. This follows amendments to the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) in April to extend the halving of the drawdown rates for 2022-23 (see ASFA Action issue 849) and is intended to bring the rules into alignment with the SIS Regulations. 

 

 

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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