Issue 722, 9 October 2019
In this issue:
- Review of the Retirement Income System
- Sunsetting Unclaimed Money and Lost Members regulations: Treasury consultation
- Recovering Unpaid Superannuation Bill: Senate Committee consultation
Review of the Retirement Income System
The Treasurer, the Hon Josh Frydenberg MP, and the Assistant Minister for Superannuation, Financial Services and Financial Technology, the Hon Jane Hume, have announced the terms of reference for an independent review of the retirement income system.
The Treasurer had indicated in May, during a media interview, that he will be commissioning a review of the retirement income system (see ASFA Action issue 709 for background).
The Review of the Retirement Income System will be conducted by an independent three-person panel comprised of Mr Michael Callaghan AM PSM, Ms Carolyn Kay and Dr Deborah Ralston.
The Review was one of the recommendations made by the Productivity Commission in their report Superannuation: Assessing Efficiency and Competitiveness (see ASFA Action issue 696 for background).
A consultation paper is expected to be released in November 2019 and the final report is expected to be provided to Government by June 2020.
The Review will establish a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians.
The Review will identify:
- how the retirement income system supports Australians in retirement;
- the role of each pillar (Age Pension, superannuation, voluntary savings) in supporting Australians through retirement;
- distributional impacts across the population and over time;
- the impact of current policy setting on public finances.
Sunsetting Unclaimed Money and Lost Members regulations: Treasury consultation
Treasury is consulting on draft Superannuation (Unclaimed Money and Lost Members) Regulations 2019, which are scheduled to sunset on 1 April 2020.
The draft regulations include two substantive changes to the previous regulations. These include:
- prescribing conditions of release whereby an account will no longer be considered an inactive low balance account if the member has met one of the conditions specified, and
- that interest will apply to the payment of unclaimed amounts in relation to inactive low balance accounts.
Minor technical changes have also been made and so the numbering of particular sections are now different.
Additional regulations to repeal the existing regulations are also being consulted on. These regulations repeal the 1999 regulations upon the commencement of the 2019 regulations, should that occur before the scheduled sunsetting date of 1 April 2020.
Treasury is seeking comments by 25 October.
If you have any feedback that you would like to provide to ASFA please forward it to Byron Addison by close of business, Friday 18 October 2019.
Recovering unpaid superannuation Bill: Senate Committee consultation
In May 2018 the Government announced a one-off 12-month amnesty to encourage employers to self-correct historical Superannuation Guarantee (SG) non-compliance (see ASFA Action issues 639 and 672 for background).
The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018, aiming to implement the Government’s proposed amnesty as announced in May 2018, lapsed at the end of the 45th Parliament in July 2019 (see ASFA Action issue 696 for background).
The Government has now re-introduced the SG amnesty into Parliament through the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 (Recovering Unpaid Super Bill). The Recovering Unpaid Super Bill provides for a one-off amnesty:
- to allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, and
- that will reduce penalties and fees that may otherwise apply in relation to historical SG non-compliance to nil.
The amnesty period is from 24 May 2018 and ends six months after the Recovering Unpaid Super Bill receives royal assent. To qualify for the amnesty, a disclosure must be made during the amnesty period and relate to quarters starting on 1 July 1992 until and including the quarter starting on 1 January 2018.
The Recovering Unpaid Super Bill aims to complement the Government’s package of reforms to improve SG compliance, recently enacted through the Treasury Laws Amendment (2018 Measures No. 4) Act 2019 (see ASFA Action issues 698, 670 and 665 for background).
The Recovering Unpaid Super Bill has been referred to the Senate Economics Legislation Committee for report by 7 November.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
