Welcome to the latest issue of the KHQ Super Alert. This week the Federal Budget was released, ASIC issued a report updating industry on its recent greenwashing actions and APRA released findings from a review of recent amendments to the SG Act.
ASIC – Report in relation to recent greenwashing actions
On 10 May 2023, ASIC released Report 763 ASIC’s recent greenwashing interventions (Report 763) which details the interventions ASIC has taken so far in response to its ‘greenwashing surveillance activities’. As explained by ASIC Deputy Chair Karen Chester, Report 763 ‘discloses ‘how and why’ ASIC has taken action against greenwashing’. Among other things, Report 763 outlines ‘the nature of matters where ASIC has intervened’, why ASIC intervened and the corrective outcomes of the intervention. ASIC encourages issuers and advisers to consider Report 763 when preparing disclosures.
Click here for details.
APRA – Findings from review of recent amendments to SG Act
On 10 May 2023, APRA released a report titled ‘Legislative Impact Assessment – Review of the impacts on defined benefit schemes from amendments to the [Superannuation Guarantee (Administration) Act 1992 (SGAA)]’. As referred to in our Super Alert of 1 July 2022, APRA had written to trustees of defined benefit funds in June seeking input about amendments to the SGAA that were introduced in 2020 by the Treasury Laws Amendment (Your Superannuation, Your Choice) Act 2020 (YSYC Act). The YSYC Act amendments ensure that employees under workplace determinations or enterprise agreements can choose the super fund that receives their compulsory employer contributions.
The YSYC Act also required ‘APRA to conduct a one-off review into the operation of the amendments’ in order to:
- ‘identify any unintended consequences of the amendments for defined benefit schemes’; and
- ‘consider whether any further amendments are required to the SGAA to rectify any unintended consequences identified by the review’.
The report explains that APRA’s findings ‘did not identify any unintended consequences on the operation or ongoing viability and profitability of defined benefit schemes that can be attributed to the amendments to the SGAA’. Accordingly, ‘APRA’s view is that no further amendment to the SGAA or any other Act is required as a consequence of the YSYC Act amendments’.
Click here for details.
Government – Federal Budget
On 9 May 2023, the Government released this year’s Federal Budget. As anticipated, the Federal Budget included two previously announced superannuation measures ie, the introduction of ‘payday super’ (see our Super Alert from 5 May 2023) and the proposal to adjust the tax rate applicable to super accounts with high balances (see our Super Alert from 6 April 2023).
Another superannuation related announcement includes amending the ‘non-arm’s length income (NALI) provisions that apply to expenditure incurred by superannuation funds by’:
- ‘exempting large APRA regulated funds from the NALI provisions for both general and specific expenses of the fund’ (previously proposed amendments to these provisions included the exemption for general expenses only – see our Super Alert from 3 February 2023); and
- ‘exempting the expenditure that occurred prior to the 2018-19 income year’.
The Government has also committed to provide funding to the ATO and towards superannuation consumer advocacy. The funding to be provided to the ATO is to facilitate its engagement with businesses and taxpayers, enabling it to address unpaid tax and super liabilities. The funding dedicated for superannuation consumer advocacy is to be offset by an increase in the APRA-administered superannuation supervisory levy.
Click here and here for details.
APRA – New FAQs in relation to SDT project
On 9 May 2023, APRA released new and updated frequently asked questions (FAQs) in relation to the superannuation data transformation project. Changes were made to general FAQ 1.25 (‘When will APRA revoke pre-SDT Reporting Standards that were replaced under Phase 1?’), while the following six FAQs are new:
- superannuation reporting standard 332.0 t (‘Can APRA clarify the expectation for reporting internal Marketing expenses such as staff wages?’);
- superannuation reporting standard 705.0 f (‘SRS 705.0 outlines an expectation that Gross Returns less all fees, costs and taxes reported on the 705.0 must equal the Net Investment Return reported on 705.1. Is the expectation that these must match exactly?’); and
- minor amendments MA. 12 to MA. 15 (‘Will APRA include the instructions for reporting Separately Managed Accounts?’; ‘With the differing implementation dates of the amended reporting standards, when will the revised definitions under SRS 101.0 become effective?’; ‘How should an RSE licensee apply look-through of ‘connected entities’ in SRS 332.0?’; and ‘Can APRA advise how to report “Date of Change” if there has been more than one change date during the reporting period for SRF 605.0, SRF 706.0 and SRF 251.3?’).
APRA has also ‘archived 26 FAQs that contain guidance on matters that have been incorporated in the final reporting standards, forms and instructions’.
Click here for details.
This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
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