Welcome to the latest issue of the KHQ Super Alert. The ATO’s ‘Your Super’ tool is now available to compare MySuper products. This week APRA and ASIC issued guidance to trustees in relation to the charging of advice fees as well as notes from a CEO roundtable held earlier this year. Treasury has also released exposure draft legislation to make electronic signing of company documents a permanent option.
ATO – Your Super comparison tool now live
On 1 July 2021, the YourSuper comparison tool was released by the ATO for MySuper products. The tool ‘displays a table of 80 MySuper products ranked by fees and net returns (updated quarterly)’ and allows users to compare up to four MySuper products (including their own if they access the personalised version through myGov).
The ATO has advised that from ‘September 2021, the tool will show how APRA assessed the annual performance of each super fund. Until then, all funds will show as Not assessed in the Investment Performance column’.
Click here for details.
APRA and ASIC – Oversight of advice fees
On 30 June 2021, APRA and ASIC issued a joint letter in relation to their ‘expectations of superannuation trustees in their oversight of financial advice fees charged to members’ accounts’. The regulators have provided ‘additional guidance for trustees in reviewing and improving their oversight framework and practices’ which was ‘informed by the cases identified during the financial services Royal Commission, other remediation processes undertaken by several trustees, and the new obligations introduced by the Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021’.
Click here for details.
ASFA, AIST and FSC – Replacement of Insurance in Superannuation Voluntary Code
On 30 June 2021, ASFA, the AIST and the FSC, advised that they had jointly agreed ‘to replace the Voluntary Code with more detailed guidance that will assist consumers in claims handling and vulnerable consumers’. This decision has been made because ‘many of the elements of the Code have been superseded by legislation or regulatory guidance’.
Please note that at the time of publication, a link to publicly available material was not available.
APRA and ASIC – Notes from Superannuation CEO Roundtable
On 29 June 2021, APRA and ASIC released the notes from a ‘CEO Roundtable’ which was held at the end of April 2021 with 11 chief executive officers of superannuation funds. The focus of the session was the implementation of SPS 515 and the upcoming product design and distribution obligations. The following matters were noted:
- ‘work undertaken to meet SPS 515 has added value to [the] strategic planning process [at superannuation funds] and encouraged new ways of thinking at the senior executive and board level about metrics and strategic outcomes’;
- the CEOs ‘expressed a desire for consistent and richer data to be provided more frequently by APRA’;
- ‘work is currently underway on implementing DDO requirements… However, there are challenges in applying the legislation; for example there was ongoing discussion in the industry about what defines a product versus an investment option, how the MySuper exemption applies in practice and whether clearing houses were captured or exempt under DDO’ (ASIC confirmed that clearing houses were captured); and
- ‘a discussion paper focussing on trustee reserving and resilience, which would touch on the trustee indemnity changes, would be released [by APRA in] mid-2021’.
Click here for details.
APRA – Supervisory levies determined
On 29 June 2021, the Australian Prudential Regulation Authority Supervisory Levies Determination 2021 was registered on the Federal Register of Legislation. This determination sets out the process for ‘the recovery of APRA’s costs, and the costs incurred in connection with supporting the integrity and efficiency of markets and promoting the interests of consumers in the financial system, from industries that are prudentially regulated by APRA’.
Click here for details.
AUSTRAC – Latest newsletter released
On 28 June 2021, AUSTRAC published the latest edition of its ‘InBrief’ newsletter. The main articles relevant to trustees are:
- ‘Are you up to date on AML/CTF reforms?’;
- ‘Do you know what makes a good SMR?’; and
- ‘Customer due diligence: Source of wealth and source of funds considerations’.
Click here and here for details.
Parliament – Technical changes to Treasury laws
On 25 June 2021, the Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2021 were registered on the Federal Register of Legislation. The regulations make technical amendments to laws in the Treasury portfolio, including:
- amending the Income Tax Assessment (1997 Act) Regulations 2021 to ‘clarify that a fee refund paid by a trustee to a member’s superannuation account [for low balance accounts] is not a concessional contribution [and therefore] does not count towards the member’s concessional contribution cap’; and
- as referred to in our Super Alert of 18 June 2021, amending the Corporations Regulations 2001 (Cth) to provide ‘that fee disclosure statements given to clients during the transition period need to include a reasonable estimate of the amount of any ongoing fees paid and services expected to be provided for the 60 day period immediately before the fee disclosure statement is provided rather than the exact amount’.
Click here for details.
Treasury – Draft legislation for virtual meetings and electronic document execution
On 25 June 2021, Treasury issued an exposure draft Bill in relation to the use of technology for meetings and related amendments. According to the draft explanatory memorandum, the Bill proposes to make ‘a permanent statutory mechanism for the electronic execution of company documents’ and allow companies ‘to sign and provide meetings-related documents electronically and use technology to hold meetings, including hybrid meetings, on a permanent basis’.
The consultation period closes on 16 July 2021.
Click here for details.
ATO – Individual transfer balance caps
On 24 June 2021, the ATO advised that each individual’s ‘personal transfer balance cap will be available online from 5 July 2021’. This may change ‘if a change is reported regarding the highest ever balance of their transfer balance account that took effect before 1 July 2021’. The ‘personal transfer balance cap is based on the highest ever balance of [a member’s] transfer balance account between 1 July 2017 and 30 June 2021’.
Reminder
All measures in the Your Future, Your Super Act (other than the stapling of accounts) commenced on 1 July 2021. Trustees should keep in mind the revised duty to act in the best interests of their members which is now expressed as a duty to act in the ‘best financial interests’, together with a reversed burden of proof in civil proceedings alleging contravention of the covenant.
