Welcome to this week’s issue of the KHQ Super Alert. This week the Treasurer announced a number of superannuation measures in the Economic and Fiscal Update, ASIC registered the legislative instrument which gives effect to the deferral of the new fees and costs disclosure obligations and APRA reminded trustees of their SPS 515 responsibilities.
Federal Budget – Economic and Fiscal Update
On 23 July 2020, the Treasurer released the Economic and Fiscal Update. The following superannuation-related announcements were made:
- The temporary COVID-19 early release of super measures (currently due to expire on 24 September 2020) will be extended to 31 December 2020.
- Previous measures ‘to pay lost and unclaimed superannuation amounts directly to New Zealand KiwiSaver accounts will commence six months after the date of Royal Assent of the enabling legislation’.
- The measures to simplify reporting to the ATO known as the ‘exempt current pension income changes’ will commence on 1 July 2021.
- The commencement of the ‘Retirement Income Covenant’ will be deferred to 1 July 2022 ‘to allow continued consultation and legislative drafting to take place during COVID-19’.
- The Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 which facilitates the closure of eligible rollover funds, will be amended to:
- ‘defer by 12 months the start date of the measure that prevents superannuation funds transferring new amounts to eligible rollover funds (ERFs)’;
- ‘defer the date by which ERFs are required to transfer accounts below $6,000 to the ATO to 30 June 2021’;
- ‘defer the date by which ERFs are required to transfer remaining accounts to the ATO to 31 January 2022’; and
- ‘allow all superannuation funds to voluntarily transfer amounts to the ATO in circumstances where the trustee believes it is in the best interests of that member, such as amounts that would otherwise have been transferred to an ERF’.
Click here and here for details.
APRA – SPS 515 requirements
On 23 July 2020, APRA wrote to all trustees to remind them of their obligations under the SIS Act and Prudential Standard SPS 515: Strategic Planning and Member Outcomes. APRA reminds trustees that they are required to undertake a business performance review by 31 December 2020 and a member outcomes assessment by 28 February 2021.
Click here for details.
ASIC – Fees and costs disclosure deferred
On 22 July 2020, the ASIC Corporations (Amendment and Repeal) Instrument 2020/579 (Instrument) was registered on the Federal Register of Legislation. The Instrument makes minor amendments to the ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 and clarifies that the new fees and costs disclosure rules will only apply to PDSs given on or after 30 September 2022. However, issuers can elect to apply the new rules from 30 September 2020 and this election can be withdrawn at any time.
No changes have been made to the application rules for periodic statements. The new disclosure rules will apply to periodic statements for reporting periods commencing on or after 1 July 2021, although an issuer can elect to apply the rules from 30 September 2020. This election cannot be withdrawn.
Click here for details.
APRA – Pandemic data collection
On 22 July 2020, APRA published a set of frequently asked questions in relation to ‘Pandemic Data Collection requirements in response to COVID-19’. According to APRA, the main aspects of the Pandemic Data Collection are to:
- ‘provide APRA with enhanced early release of superannuation data including demographic data’;
- ‘provide APRA and ASIC with monthly data on complaints, insured member accounts that have been cancelled, insurance claim activity and intra-fund advice provided’; and
- ‘provide APRA with quarterly data on investment options, foreign currency exposure and hedging and member switching’.
Click here for details.
ATO – Guidance in relation to unclaimed money
On 20 July 2020, the ATO published two website updates in relation to minor changes made to the Superannuation (Unclaimed Money and Lost Members) Act 1999 in June. The ATO explains that the Act was amended to ensure that:
- ‘an account is not an ‘inactive low balance account’ if the member has elected to maintain insurance on that account’ under the SIS Act;
- if a member does not want their account to be an ‘inactive low balance account’, the election must be made to the fund trustee, not the ATO; and
- trustees do not need to ‘report to [the ATO] accounts identified on the unclaimed money day, that cease to be either unclaimed money or inactive low balance accounts or lost member accounts by the scheduled statement day’.
