In this edition:
Government and Regulator Interaction
The ASFA Secretariat met with representatives from APRA and ASIC to discuss a range of topics including cyber, breach reporting, Financial Accountability Regime, APRA’s and ASIC’s current priorities for the superannuation industry.
ASFA gave evidence to the Senate Standing Committees on Economics on its Inquiry into the provisions of the Treasury Laws Amendment (2022 Measures No. 3) Bill 2022 regarding the performance test treatment of faith-based funds. ASFA supported the adjustment of the annual performance test to reflect the faith-based orientation of a fund where this has had an effect on the investment decisions made by the fund, generally through the screening out of particular investments or assets.
Research and submissions
ASFA made a submission to the Senate Economics Legislation Committee on the Financial Services Compensation Scheme of Last Resort Bill 2022 and related bills. In our submission we maintain our long-standing view that the CSLR model should avoid cross-subsidisation by the APRA-regulated superannuation sector of losses incurred within other sectors, or in relation to financial services that are not provided by the APRA-regulated superannuation sector.
ASFA also made a submission to the Committee on the Financial Accountability Regime Bill 2022. In our submission we reiterated our concerns about the definition of a ‘significant related entity’ of an RSE licensee.
ASFA made a pre-Budget submission for the October 2022 Budget. The submission raised several recommendations including the payment of Superannuation Guarantee (SG) at the same time as wages, a review of the treatment of superannuation payments owed by insolvent employees, introducing SG on paid parental leave and or a baby bonus, increasing the upper threshold of the low-income tax offset, a maximum of $5 million in the superannuation and a reduction of the division 293 threshold.
ASFA made a submission to the Senate Standing Committee on Economics on the Performance Test Treatment of Faith-based Products. In the submission ASFA called out the need for the scope to be broadened to all ‘values-based’ investing, including ethical, ESG and sustainability. In addition, the submission called for an ‘adjusted’ performance test and not a ‘supplementary’ performance test.
ASFA made a submission to Treasury on the Review of Your Future, Your Super Measures consultation paper. In the submission ASFA recommended that the Test be a more comprehensive assessment of investment performance, incorporating multiple metrics. In addition, for a product that has failed the Test by a specified margin, the consequences should be either more intense scrutiny by APRA and/or an opportunity to ‘show cause’ to APRA as to why it should continue to be treated as if the product was performing.
ASFA made a submission to APRA on Strengthening Operational Risk Management. In the submission, ASFA made several recommendations including: a deferral of the commencement, refinement of the scope of the ‘material service provider’, a need for CPS 230 to be refined to better articulate the Board’s accountability as compared to management and clarity about the relationship between APRA’s suite of prudential requirements and guidance that deal with risk.
ASFA made a submission to Treasury on the ASIC Industry Funding Model review. ASFA recommends that the core principle guiding the design of the IFM should remain and that those entities that cause the need for regulation should generally pay for the cost of regulation. The submission calls for increased transparency as to the calculation of the levies.
ASFA made a submission to Treasury on the global agreement on corporate taxation, addressing the tax challenges arising from the digitalisation of the economy. In the submission ASFA is supportive of Australia’s adoption of the two-pillar multilateral solution to the tax challenges from digitisation, but wish to emphasise the importance of ensuring that the Australian rules clearly reflect the intention for superannuation/pension funds and related investment and service entities to be treated as ‘Excluded Entities’.
Media
The ASFA Retirement Standard was featured in articles across several publications including Adelaide Now and The News Daily.
ASFA’s support for the proposed Housing Accord announced in the recent Federal Budget was mentioned in an article in Super Review and Financial Newswire.
ASFA’s challenge of the Your Future, Your Super (YFYS) performance test methodology to Treasury through a recent submission was featured in an article in Financial Newswire.
ASFA’s recommendation to pay SG on paid parental leave and or introduce a superannuation baby bonus as part of the Pre-Budget submission was mentioned in an article in the West Australian.
ASFA’s support for the Quality of Advice Review (QAR) proposals as per the recent submission was featured in an interview and an article for ABC News and Financial Newswire.
Events and Learning
ASFA will be delivering the following learning workshops and events in November:
- Superannuation Governance Masterclass, Sydney: 9 November
- RG 146 Superannuation Virtual Workshop: 14, 16, 18 November
- Financial Accountability Regime: 15 and 25 November
- End-of-year networking event, Sydney: 23 November
- End-of-year networking event, Melbourne: 24 November
- RG 146 Superannuation Refresher: 28 November
- RG 146 Superannuation (face-to-face): 29-30 November
View our new professional development calendar to see what learning workshops and events are scheduled for the new year. Check out the course content, dates and locations and map out your professional development journey for 2023.
