Welcome to the latest issue of the KHQ Super Alert. This week, APRA and ASIC published new FAQs on the retirement income covenant, AFCA finalised its new funding model after an industry consultation and another trustee remuneration judicial advice application decision was handed down.
APRA and ASIC – FAQs on the retirement income covenant published
On 1 June 2022, APRA published five frequently asked questions ‘to assist registrable superannuation entity (RSE) licensees in developing their retirement income strategies to meet the requirements of the retirement income covenant’. The frequently asked questions were developed with input from both APRA and ASIC, following the publication of a joint letter on the implementation of the retirement income covenant written by both regulators on 7 March 2022.
The five questions are:
- What are APRA’s expectations of RSE licensees in relation to developing their retirement income strategy and meeting the requirements of the retirement income covenant by 1 July 2022?
- Can RSE Licensees submit draft retirement income strategies to APRA for feedback before 1 July 2022?
- What do RSE licensees need to do from 1 July 2022 to implement their retirement income strategies?
- Is there any existing guidance on reviewing the outcomes of retirement income products?
- Can the retirement income strategy cover the provision of financial product advice? (response provided by ASIC)
Click here for details.
AFCA – Funding model finalised after industry consultation
On 31 May 2022, AFCA announced that ‘the vast majority of financial firms will pay the same or less to the Australian Financial Complaints Authority under a new, user-pays funding model that will be implemented from 1 July 2022’. AFCA reports that the new model was ‘approved by AFCA’s independent board after an extensive consultation process with users of the external dispute resolution scheme and peak industry bodies’ (as referred to in our Super Alert of 18 March 2022).
Click here and here for details.
Supreme Court of NSW – Judicial advice application
On 27 May 2022, the Supreme Court of New South Wales handed down its decision in Re appln by SCS Super Pty Limited atf Australian Catholic Superannuation and Retirement Fund [2022] NSWSC 686. The Court determined that the trustee was ‘reasonably justified in exercising the power of amendment’ to ‘insert a new trustee remuneration clause giving the Trustee a right to charge, and take from the Fund a fee for acting as trustee of the Fund’.
Click here for details.
Treasury – Consultation on proposed financial institutions supervisory levies
On 27 May 2022, Treasury issued a discussion paper seeking submissions on the ‘proposed financial supervisory levies for the 2022-23 financial year’. The levies are set ‘to recover the operational costs of APRA and other specific costs incurred by certain Commonwealth agencies, including the Australian Securities and Investments Commission, the Australian Taxation Office, and the Australian Competition and Consumer Commission’. The consultation period closes on 10 June 2022.
Click here for details.
ATO – Transfer Balance Account Reporting Updates
On 27 May 2022, the ATO issued CRT Alert 007/2022 ‘Transfer Balance Account Reporting Updates’. According to the ATO, the ‘Treasury Laws Amendment (Allowing Commutation of Certain Income Streams) Regulations 2022 relating to the transfer balance cap (TBC) were recently passed and took effect from 5 April 2022’ (as referred to in our Super Alert of 8 April 2022). This means that members ‘can now action [the ATO’s] commutation authority relating to specific legacy pensions and market linked income streams’.
Click here for details.
This article was written by Sophia McNamara (Lawyer), Sanela Osmanovic (Senior Associate) and Natalie Cambrell (Director).
