In this edition:
Government and regulator interaction
The ASFA Financial Accountability Regime (FAR) Working Group met with APRA representatives to discuss the finalised Prudential Standard CPS 511 Remuneration (CPS 511). During the discussion several questions were raised, including how CPS 511 applies in the context of the current obligations imposed on superannuation fund trustees under the SIS Act, the timing of implementation of CPS 511 (e.g. for Remuneration Committee decisions) and how deferrals should be calculated.
ASFA and ASP members have been working with the ATO to achieve a simpler approach to the administration of contributions that are effectively ‘recontributions’ of withdrawals made under the COVID-19 early release of super measure. The ATO has reduced the complexity of administration and made it much easier for funds to implement. This represents a great win for the industry and highlights the value of industry working closely with regulators to achieve optimal outcomes for members.
Earlier this month ASIC published an updated version of RG 271 that contained several amendments reflective of ASFA Advocacy and the support provided by the Internal Dispute Resolution (IDR) Working Group. ASFA was successful in securing a more detailed explanation in the guidance, clarifying when a superannuation fund trustee might be providing an explanation or apology as opposed to a decision directly, reducing the requirement for a full written IDR response to the complainant. An amendment was also made to the requirements around the IDR and EDR process for objections to proposed death benefit distributions to better reflect the ‘claim-staking process’ and the legislative obligations imposed on trustees.
Representatives from ASFA recently attended a workshop run by ASIC and Beyond Blue to discuss ways to improve support for Australians who are impacted by financial wellbeing and mental health issues. The research presented at the workshop showed a correlation between the two as observed by survey data and primary research undertaken over an 18-month period. ASFA believe there is an opportunity for superannuation funds to explore this area of research further as it pertains to your membership base.
ASFA were invited to appear before the House of Representatives Economics Committee Inquiry into the implications of common ownership and capital concentration in Australia. Several experts from both within Australia and abroad were called upon, including representatives from industry associations, academics and superannuation funds to express their views on common ownership of assets and the potential impact on capital concentration.
Research and submissions
September has been a busy month for the Policy team with several submissions made.
ASFA made a submission to Treasury in response to the draft regulations for superannuation portfolio holdings disclosure (PHD). This submission raised concerns about the level of detail required to be disclosed under some of the provisions in the draft PHD regulations. The submission highlighted the material disadvantage superannuation funds experience when investing as a result of the portfolio holdings disclosure requirement.
A submission was made to the Department of Home Affairs in response to the consultation paper ‘Strengthening Australia’s cyber security regulations and incentives’. ASFA’s submission outlined the potential for regulatory overlap and duplication in managing cyber risk and the importance of harmonisation. The submission calls for a single regulator, APRA, to be responsible for managing this risk for the financial sector and ensuring harmonisation across the Department of Home Affairs, ASIC and the ATO.
A submission was made to Treasury in response to the draft Bill released on the financial and auditing requirements for superannuation funds. The submission supported measures to improve transparency and member outcomes however highlighted the need for the costs of any proposed change to be considered as well as the benefit it will provide members.
Finally, a submission was made to the House of Representatives Economics Committee Inquiry into the implications of common ownership and capital concentration in Australia. In our submission ASFA called out that there is no direct relationship between changes in concentration measures and changes in market competitiveness. ASFA also warned that the implementation of regulatory responses to the perceived harms of common ownership are likely to be harmful.
ASFA’s submission in response to the draft regulations for superannuation portfolio holdings disclosure was featured in the AFR.
The ASFA Retirement Standard was featured in several publications including Over 60,
The Australian and The Advertiser in relation to different topic areas such as how much you need to retire, how to work out when you are ready to retire and how to manage longevity risk.
Events and Learning
The ASFA Events and Learning team have several sessions lined up over the next few weeks to make sure you are across the key issues affecting superannuation at this time.
We will also be delivering the following learning workshops: