Welcome to the latest issue of the KHQ Super Alert. This week the Government released a roadmap setting out its proposed reforms relating to sustainable finance. APRA launched a new website with its ‘prudential handbook’ and the instrument containing the tax withholding rates for superannuation payments in 2024/25 was registered.
APRA – Quarterly industry statistics published
On 20 June 2024, APRA released the quarterly superannuation industry publication, the quarterly superannuation product statistics and the quarterly fund-level statistics for the quarter ending March 2024. The last publication is new and ‘contains detailed member demographic information and total fund investments by asset sector types’ (for example, trustees can now see which fund has the youngest median member age, greatest number of inactive accounts etc.).
Some key statistics include that as of 31 March 2024:
- there were 59 MySuper products, 478 accumulation choice products, and 352 retirement products (including transition to retirement);
- there were over 14.7 million MySuper member accounts; and
- the average member account balance had increased to $68,000 for MySuper products, $126,000 for accumulation choice products, and $355,000 for retirement products (excluding transition to retirement).
Click here for details.
Treasury – Government’s proposed sustainable finance reforms
On 19 June 2024, Treasury released a ‘Sustainable Finance Roadmap’ which sets out the Government’s ten priority areas towards ‘modernising [Australia’s] financial markets and maximising the economic opportunities associated with energy, climate and sustainability goals’. For example, priority 1 is ‘implementing climate-related financial disclosures’ and priority 2 is working with the Australian Sustainable Finance Institute ‘to develop an Australian sustainable finance taxonomy’.
The roadmap sets out the proposed timing and Federal Budget implications of each of the priorities. In an associated media release, the Treasurer expressed that the roadmap ‘identifies additional priorities to fast‑track the growth of [Australia’s] sustainable finance industry, including dealing with greenwashing, better understanding climate risks and opportunities, and improving access to climate and emissions data’.
Click here and here for details.
APRA – Digital prudential handbook launched
On 19 June 2024, APRA announced the launch of handbook.apra.gov.au which ‘brings together all of APRA’s policy standards, guidance and supporting information into one place’. The website has a search function which allows users to search for topics across all regulated industries. APRA has explained that the materials ‘are grouped into clear pillars (governance, risk management, financial resilience/business operations, and recovery and resolution planning), and ordered by “core or supporting” – giving a clearer sense of “how things fit together”’.
Click here for details.
APRA – Feedback in relation to unlisted asset valuations
On 19 June 2024, APRA published a letter to all RSE licensees in relation to its ‘survey of unlisted asset valuation governance practices’. APRA has explained that almost all entities with exposure to unlisted assets participated in its survey. The areas identified for improvement were as follows:
- ‘use of revaluation triggers for ongoing and interim valuations…[s]ome RSELs did not have predefined triggers or did not describe clear triggers for revaluations’;
- ‘frequency of valuations. Some unlisted assets were not valued at least quarterly as per SPS530 guidance (for example private equity, property and infrastructure)’; and
- ‘extent of Board scrutiny of unlisted asset valuations. This was particularly prevalent with the platform trustees’.
Click here for details.
APRA – Minor amendments to auditing standards
On 18 June 2024, APRA announced that it has finalised consultation on the ‘minor and consequential’ changes required to various prudential standards (such as SPS 310 Audit and Related Matters) as a result of changes made by the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 (Cth). This Act extended the financial reporting and auditing requirements in Chapter 2M of the Corporations Act 2001 (Cth) to apply to registrable superannuation entities, so certain provisions in the prudential standards are no longer required or references need to be updated.
Click here for details.
AFCA – Proposed schedule for new complaints guidance released
On 13 June 2024, AFCA released its proposed schedule in relation to the ‘Approach documents’ that it is intending to create or amend in the 2024/25 financial year. For example, in relation to superannuation, AFCA proposes to issue a new Approach document called ‘Approach to sections 29(6) and (7) of the Insurance Contracts Act 1984 (Cth) (ICA)’.
AFCA has asked for feedback as to whether there are ‘any other approach documents that should be prioritised for the financial year’. The consultation period closes on 27 June 2024.
Click here for details.
Legislation – New family law superannuation rates determination registered
On 12 June 2024, the Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2024 was registered on the Federal Register of Legislation. The determination specifies certain rates that ‘relate to orders or agreements providing for a base amount split of future superannuation benefits…payable in respect of a defined benefit superannuation interest or an interest in a self-managed superannuation fund’.
Click here for details.
Legislation – Tax withholding for 2024/25 specified in legislative instrument
On 11 June 2024, the Taxation Administration (Withholding Schedules) Instrument 2024 was registered on the Federal Register of Legislation. This instrument specifies ‘the amount, formulas and procedures to be used for working out the amount required to be withheld by an entity under the pay as you go (PAYG) system’ for the 2024/25 financial year. This includes tax to be withheld from superannuation lump sums and superannuation income streams.
For example, the instrument states that ‘the transition period [for the progressive increase to the preservation age] has been completed, for the 2024-25 and future income years the preservation age is 60 for all payees born after 30 June 1964. For those payees born before that date, they have already reached their preservation age’.
Click here for details.
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