Welcome to the latest issue of the KHQ Super Alert. This week, APRA published its annual report and issued a consultation letter about proposals to publish super fund expenditure. Treasury released a consultation paper in relation to implementing the ‘Payday Super’ measure.
APRA – Annual report 2022-23
On 13 October 2023, APRA announced that it has published its annual report for the 2022-23 financial year.
In relation to the superannuation industry, the chair’s summary reported that APRA ‘continued to drive better outcomes for superannuation fund members during the year’ and in doing so has:
- ‘strengthened investment governance with the implementation of a new standard in January 2023, requiring trustees to have a robust valuation governance framework and to review valuations more frequently’;
- ‘undertaken its assessment and publication of findings on investment returns and fees of superannuation funds, through the statutory annual performance test and APRA’s heatmaps for MySuper and choice products’; and
- undertaken a retirement phase review which found ‘a lack of urgency in addressing requirements under the retirement income covenant’.
In relation to cross-industry matters, APRA reported that it:
- ‘released final prudential requirements and guidance for recovery and resolution planning, which aim to strengthen crisis preparedness’;
- ‘continued its work assessing cyber controls’; and
- ‘released the findings of the first Climate Vulnerability Assessment, which assessed the potential future financial impacts of climate change to help banks, insurers and superannuation trustees better understand and manage these risks’.
Click here for details.
APRA – Consultation letter on publication of data relating to expenses and asset class characteristics
On 10 October 2023, APRA issued a consultation letter entitled Superannuation Data Transformation publications and confidentiality consultation, two draft publications, and confidentiality proposals. The letter outlines APRA’s proposals for the publication of a range of data, including proposals ‘to determine as non-confidential certain data under [four] reporting standards’.
APRA is proposing to publish the data from SRS 332.0 Expenses, SRS 550.0 Asset Allocation, SRS 605.0 RSE Structure, and SRS 606.0 RSE Profile as follows:
- ‘new industry aggregate and fund level data on fund expenditure’;
- ‘new industry aggregate and fund level details on investments by detailed asset class characteristics’; and
- ‘new investment option classifications and the number of members under the standard fee arrangements to be included in APRA’s Quarterly Superannuation Product Statistics’.
The letter states that APRA is also ‘consulting on a consequential amendment to the definition for executive remuneration expenses following the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023’ which came into effect on 1 July 2023.
Consultation will close on 29 November 2023.
Click here for details.
APRA – Revocation of superannuation reporting standard
On 10 October 2023, APRA issued a brief letter to RSE licensees informing them that on 26 September 2023 it revoked reporting standard SRS 534.0 Derivative Financial Instruments. The last reporting period for this form was the period ending 30 June 2022 and RSE licensees are no longer required to report on this form.
Click here for details.
Treasury – ‘Payday Super’ consultation paper
On 9 October 2023, Treasury released for consultation a paper titled Securing Australians’ Superannuation. The consultation paper sets out a range of policy design elements proposed to enable the implementation of the ‘Payday Super’ measure announced as part of the 2023-24 Budget (see our Super Alert from 12 May 2023).
It is intended that, subject to the passage of legislation, the reforms will commence from 1 July 2026.
The core policy design issues considered in the paper include:
- defining payday super;
- updating the Superannuation Guarantee Charge; and
- compliance mechanisms.
Consultation will close on 3 November 2023.
Click here, here, and here for details.
APRA – Notes from SDT strategic forum
On 6 October 2023, APRA released the notes from the superannuation data transformation strategic forum held on 19 September 2023 which included updates on three of its upcoming activities:
- ‘plans to consult on the confidentiality and publication of data for expenses, detailed asset class characteristics and additional data introduced under the Phase 1 minor amendments for RSE profile and structure in October 2023’ (see the second item of this Super Alert);
- ‘plans to consult on proposals for data collection under Phase 2 of SDT on the topics of Investments including indirect investment costs, RSE Licensee and RSE Profile, and RSE Licensee Financial Statements from late November 2023 to March 2024’; and
- its intention to continue expanding the suite of superannuation data it publishes.
Click here for details.
This alert was written by Kiara Leslie (Lawyer) and Natalie Cambrell (Director).
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