Issue 659, 9 February 2018
In this issue:
- Tax relief for mergers, SuperStream funding, compassionate grounds and ATO-held super: bill introduced
- Reminder: APRA consultation on strengthening member outcomes
- Fintech regulatory sandbox: bill introduced
Tax relief for mergers, SuperStream funding, ATO-held super and compassionate grounds: bill introduced
On 7 February the government introduced into parliament the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018, proposing amendments to a number of superannuation-related laws.
The key reforms in the Bill include:
- tax relief for merging funds – the bill amends the tax legislation to extend tax relief for merging superannuation funds until 1 July 2020. The relief will be available for mergers that occur on or after 1 October 2011 and before 2 July 2020. This will provide a continuation of relief that lapsed on 1 July 2017, and was confirmed in the May 2017 Budget (see ASFA Action issue 627).
- SuperStream funding – the Bill amends the APRA Act to enable the government to recover the ongoing cost of the governance of the superannuation transaction network from the superannuation supervisory levy.
The cost of implementing the SuperStream measures, including the establishment of the Gateway Network Governance Body, has been recovered from APRA-regulated superannuation funds through the superannuation supervisory levy. The levy arrangements currently permit the recovery of costs for the ‘implementation’ of the SuperStream measures only until 30 June 2018. While the majority of implementation activities will have been completed by this time, the governance of the superannuation transaction network through the Gateway Network Governance Body will have an ongoing cost.
Under the proposed amendment, in determining the amount of levy money payable to the Commonwealth to cover certain costs, the Treasurer will be able to take into account the ongoing cost of governing and maintaining the superannuation transaction network. The amendment is intended to apply to financial years starting on or after 1 July 2018.
- transfer of responsibility for compassionate grounds applications to ATO – the Bill includes amendments to transfer the regulator role for the early release of superannuation benefits on compassionate grounds from the Department of Human Services to the Commissioner of Taxation.
This change will commence on a day to be set by proclamation or six months after the bill receives royal assent, and will apply to applications for the early release of superannuation made on or after the commencement date. The change was announced by the government in December (see ASFA Action issue 654).
- ATO-held superannuation amounts – the Bill amends the superannuation laws to enable the Commissioner of Taxation to pay certain superannuation amounts directly to individuals with a terminal medical condition, without first transferring them into an account with a complying superannuation fund. This measure will apply to ATO-held amounts including unclaimed money, claimed lost amounts, shortfall Superannuation Guarantee (SG) amounts and small (ATO-held) superannuation.
This amendment will commence at the beginning of the first quarter after the bill receives royal assent. The measure was first announced in the 2015-16 Budget as part of a package of lost and unclaimed superannuation measures (see ASFA Action issue 566 and was previously introduced in Treasury Legislation Amendment (Repeal Day 2015) Bill 2015 (see ASFA Action issue 585), which lapsed on the calling of the 2016 election.
Reminder: APRA consultation on strengthening member outcomes
As noted in ASFA Action issue 655, APRA has released a consultation package on proposed changes to the prudential framework designed to enhance strategic and business planning, oversight of fund expenditure and the assessment of outcomes for members of registrable superannuation entities (RSEs).
The consultation package proposes measures including:
- changes to the existing prudential standard SPS 220 Risk Management relating to strategic and business planning and fund expenditure policies and processes
- a new prudential standard, SPS 225 Outcomes Assessment, requiring all RSE licensees to annually assess the outcomes provided to members using a broader range of measures
- new prudential practice guides to assist RSE licensees with their strategic and business planning and the outcomes assessment
- amending SPS 250 Insurance in Superannuation to require RSE licensees to provide straight-forward processes for opting-out of all insurance products.
If you have any comments that you would like ASFA to consider including in a response to APRA, please forward them to Byron Addison by close of business Friday 9 March 2018.
Fintech regulatory sandbox: bill introduced
The government has introduced into parliament a bill to create the framework for an enhanced ‘regulatory sandbox’ to support innovation in financial services.
The Treasury Laws Amendment (2018 Measures No. 2) Bill 2018 amends the Corporations Act 2001 to extend existing regulation-making powers to enable a conditional exemption from obtaining an Australian financial services licence for the purposes of testing financial products and services.
The proposed FinTech regulatory sandbox is intended to help providers overcome the initial regulatory burden and costs of licensing that may otherwise hinder innovative offerings.
The reforms were the subject of consultation in late 2017 (see ASFA Action issue 649) and will apply from the day after the bill receives royal assent.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.