Welcome to the latest issue of the KHQ Super Alert. APRA has released the draft prudential practice guide in relation to remuneration for regulated entities, while Treasury has commenced two consultations relating to greater transparency of proxy advice and miscellaneous changes to some superannuation laws.
ASIC – Quarterly report
On 6 May 2021, ASIC published its first quarterly industry update report, which covers the period from 1 January to 31 March 2021. In the report, ASIC has set out a summary of the proceedings which it has commenced against some superannuation trustees, as well as its work with APRA.
Click here for details.
Treasury – Miscellaneous amendments to Treasury laws
On 5 May 2021, Treasury released for public consultation an ‘exposure draft Bill and Regulations [relating to] proposed minor and technical amendments to the Treasury portfolio laws’. In relation to superannuation, the miscellaneous legislation proposes to:
- amend the Superannuation (Unclaimed Money and Lost Members) Act 1999 to:
- allow the ATO ‘in certain circumstances [to] recover amounts overpaid [to superannuation funds] under Part 4B [of the Act]’; and
- ‘ensure that New Zealand-sourced amounts held under the that Act are treated consistently with the rules in Part 12A of the Superannuation Industry (Supervision) Regulations 1994’, which means that ‘amounts which include a New Zealand-sourced amount cannot be paid out under the Superannuation (Unclaimed Money and Lost Members) Act 1999 to self-managed superannuation funds, funds which have not notified the [ATO] or, in certain circumstances, persons who do not satisfy the New Zealand eligibility age’; and
- amend section 291-25.01(3) of the Income Tax Assessment (1997 Act) Regulations 2021 ‘to clarify that a fee refund made under section 99G(6) of the Superannuation Industry (Supervision) Act 1993 [i.e., the low balance fee cap rules], made from a general reserve, is not considered a concessional contribution’.
The consultation period closes on 25 May 2021.
Click here for details.
ASIC – Research into ‘general advice’ label
On 4 May 2021, ASIC released the findings from independent consumer research on the term ‘general advice’. The research found that changing the ‘label alone is unlikely to prevent confusion about the nature of general advice’. Previous government reports had ‘recommended that general advice should be re-labelled to ensure that consumers are able to clearly distinguish between personal advice and general advice’.
For example, a recommended change was to add ‘the word ‘only’ to the general advice label, [however this was not found to] have any measurable effect on consumers’ perceptions about the nature of the advice given’. Because no evidence was found to suggest changing the label, ASIC will not make any further recommendations to the government in relation to changing the phrase.
Click here for details.
APRA – Prudential practice guide for remuneration
On 30 April 2021, APRA released a draft prudential practice guide for consultation, CPG 511 Remuneration. The draft guide ‘sets out principles and better practice examples to assist entities in meeting the requirements proposed in the new prudential standard, CPS 511 Remuneration’.
The consultation period closes on 23 July 2021.
Click here for details.
Treasury – Greater transparency of proxy advice
On 30 April 2021, Treasury released for public consultation a paper in relation to greater transparency of proxy advice. According to Treasury, proxy advice ‘assists institutional shareholders to make decisions on how to vote on matters put to shareholders for approval at company meetings’ such as superannuation funds. Due to ‘the influential role of proxy advisers in corporate governance in Australia and the high degree of institutional share ownership, the Government is consulting on the adequacy of the current regulatory regime for proxy advice and developing reform options that would strengthen the transparency and accountability of proxy advice’.
The consultation period closes on 1 June 2021.
Click here for details.
Legislation – Director IDs
On 29 April 2021, the Corporations (Transitional) Director Identification Number Extended Application Period 2021 was registered on the Federal Register of Legislation. As referred to in our Super Alert of 1 April 2021, a transition period will apply to directors before they need to apply for a director ID under the new modernising business registers program. The purpose of the instrument is to set out this transition period (until 30 November 2022) and extend ‘the application period for new directors appointed during this testing period to ensure that they are not disadvantaged or exposed to the offence provision’.
Click here for details.
Reminder – Federal Budget
The Federal Budget will be handed down on Tuesday 11 May. Members of ASFA will be able to attend in-person the ASFA Discussion Group we are running on Monday 17 May, which will consider any superannuation-related announcements.
Click here to register your attendance.
