Super Alert – 17 September 2021

Welcome to the latest issue of the KHQ Super Alert which follows another busy week of news. The ATO was especially busy, providing updated guidance in relation to the tax consequences of trustees receiving compensation and the reporting of successor fund transfers. The Government announced that it is consulting with businesses and individuals in relation to modernising document execution.

ATO – UPDATE ON COMPASSIONATE RELEASE OF SUPER

On 16 September 2021, the ATO published guidance in relation to ‘compassionate release of super approval’. The ATO previously advised that it would ‘be deploying an update to the Compassionate release of super (CRS) approval notifications sent to superfunds and administrators via the Online services for business portal’. According to the ATO, the ‘update will be deployed on 23 September 2021 and will see the USI of the nominated superfund included in the PDF file name’. The ‘update should assist administrators to more easily identify the recipient superfund without having to download and view each individual PDF’.

Click here for details.

ATO – ENACTED CHANGES TO ACTUARIAL CERTIFICATE REQUIREMENTS

On 15 September 2021, the ATO announced that legislative changes to actuarial certificate requirements have received Royal Assent. According to the ATO, these changes, discussed in our Super Alert of 20 August 2021, ‘removes a requirement for superannuation trustees to obtain an actuarial certificate when calculating exempt current pension income (ECPI), where all members of the fund are fully in retirement phase for all of the income year’. These changes ‘will apply to assessments for the 2021-22 income year and later years’.

Click here for details.

ATO – UPDATES TO SUCCESSOR FUND TRANSFER REPORTING

On 15 September 2021, the ATO released updated guidance on successor fund transfer reporting, although it is not clear from the source material what the specific updates are. The ATO’s previously-released guidance was referred to in our Super Alert of 26 June 2020.

Click here for details.

GOVERNMENT – CONSULTATION ON MODERNISING DOCUMENT EXECUTION

On 14 September 2021, the Government issued a media release in relation to modernising ‘document execution across the Federation’. The Government is seeking feedback ‘on how technology can be used to streamline the way statutory declarations and deeds are executed’ particularly in light of the ‘temporary amendments made by some jurisdictions in response to the COVID-19 pandemic’. The Government noted that this is part of its ‘Deregulation Agenda’ which is focussed on ‘reducing regulatory barriers and making it simpler and easier for business to grow and create jobs’.

The consultation period closes on 8 October 2021.

Click here and here for details.

TREASURY – DESIGN AND DISTRIBUTION OBLIGATIONS REGIME TO BE AMENDED

On 14 September 2021, Treasury updated its policy statement in relation to the Design and Distribution Obligations regime. Treasury noted that it had ‘received feedback from industry stakeholders as they work towards implementing the requirements prior to the regime’s commencement’ and consequently ‘the Government intends to make a number of amendments to achieve its intended operation of these reforms’. Until these legislative changes are implemented ASIC ‘will provide temporary relief that gives effect to the Government’s policy intention’.

The regime’s commencement date of 5 October 2021 remains unchanged.

Click here for details.

APRA – APRA’s CHAIR UPDATES PARLIAMENTARY STANDING COMMITTEE ON ECONOMICS

On 10 September 2021, APRA published a speech given by its Chair, Wayne Byres, to the House of Representatives Standing Committee on Economics. Mr Byres noted that APRA’s ‘2021-2025 Corporate Plan, released in August, sets out APRA’s strategic priorities for protecting bank depositors, insurance policyholders and superannuation members during the current period of disruption and uncertainty’. Regarding the Your Future Your Super reforms, Mr Byres advised that ‘the sharpening of the best interest duty to the best financial interest duty’ and the reverse onus of proof ‘will require trustees to be able to demonstrate that their decisions to invest or spend members’ funds are based on well founded analysis of expected member financial benefits’.

Click here for details.

ATO – RIGHTS RELATING TO THE SEEKING OF COMPENSATION

On 10 September 2021, the ATO published a fact sheet in relation to ‘compensation received by super funds from financial institutions and insurance providers’. According to the ATO, ‘[a] super fund may have a right to seek compensation if it entered into a legal contract or agreement with a financial services provider or insurance provider, paid the fees or premiums from fund assets, allocated the cost to the members, and:

  • the financial service or advice was not provided
  • the advice was deficient, or
  • the insurance premiums for death or disability insurance cover were overcharged’.

Should a super fund be successful in obtaining such compensation, ‘the trustee of the fund needs to be aware of possible super, income tax and goods and services tax (GST) consequences’ which will ‘depend on the circumstances in which the compensation amounts are received’.

Click here for details.

KHQ Lawyers - Natalie Cambrell

Natalie Cambrell Director

Natalie leads our Superannuation & Financial Services team. With more than 25 years’ experience, she has an enviable reputation for her in-depth knowledge in these highly regulated and complex... Read More

KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in our Superannuation & Financial Services team, and has a broad range of experience working with a range of superannuation fund trustees... Read More

KHQ Lawyers - Jordan Diamantopoulos

Jordan Diamantopoulos Lawyer

Jordan is a lawyer in our Litigation & Dispute Resolution team, with experience across the private and public sector. He commenced with KHQ as a graduate lawyer in 2021,... Read More