Super Alert – 24 June 2022

Articles


Posted By and on 24/06/22 at 11:18 AM

Welcome to the latest issue of the KHQ Super Alert. This week, APRA published a speech in relation to the operational resilience of superannuation trustees, and a further judgement in relation to a judicial advice application was handed down. The ATO released the final version of its legal professional privilege protocol, and an alert on continuation of contributions during an SFT.

APRA – Speech in relation to operational resilience of trustees

On 23 June 2022, APRA published a speech delivered by its chair, Wayne Byres, and Executive Director of Superannuation, Suzanne Smith relating to APRA’s latest priorities. The focus was on operational resilience in the industry and comments made by Mr Byres and Ms Smith include:

  • “…it’s difficult to get away from the fact that size, translating into economies of scale, helps deliver better member outcomes, and trustees that can’t compete on that basis need to think very hard about how (and whether) they can deliver in their members’ best financial interests, now and into the future”;
  • in terms of successor fund transfers, APRA is “observing funds facing difficulty due to what [APRA refers] to consolidation indigestion. This may manifest at the industry level at the point of transfer in a SFT, for example where an administrator has a backlog of transfers to process…While these challenges are not insurmountable, the focus of trustees needs to remain firmly on translating the transaction into demonstrable financial benefits to their members”; and
  • APRA “will undertake a thematic review of [retirement income covenant] strategies, and release the findings in due course, along with examples of better practice, to assist industry to continue to evolve and strengthen their role of supporting their members”.

Click here for details.

APRA – New FAQs to the Superannuation Data Transformation Project

On 23 June 2022, APRA added 12 new questions to the list of frequently asked questions relating to its Superannuation Data Transformation project. One existing question was also updated.

Click here for details.

ATO – Legal professional privilege protocol and compendium finalised

On 22 June 2022, the ATO advised that it had released the final version of its legal professional privilege protocol and compendium. The purpose of the protocol is to provide guidance when making a legal professional privilege claim ‘in response to a formal information gathering notice’. As referred to in our Super Alert of 1 October 2021, the protocol was subject to consultation and the ATO has documented in the compendium its responses to public feedback.

Click here for details.

Supreme Court of SA – Judicial advice application

On 17 June 2022, the Supreme Court of South Australia handed down its decision in Host-Plus Pty Limited v Blackwell [2022] SASC 59. The application was opposed by a member of the fund as the representative for all beneficiaries of the fund. The Court ultimately found that it was appropriate for the relevant trust deed to be amended to allow the trustee to charge a new fee to be known as a ‘Risk Charge’.

Click here for details.

ATO – Employer contributions during an SFT

On 17 June 2022, the ATO issued a news alert for trustees to ensure that employers are “able to keep making contributions to all funds for their employees throughout a successor fund transfer”. The ATO has advised that during an SFT, it is recommended that the ATO is notified “well in advance” so that it can “provide guidance and support to reduce impacts for your fund and members, and the broader superannuation system”. If a continuation of contributions is not allowed, then employer contributions “may not be allocated to the right financial year – this can have an impact on contribution caps and member entitlements”.

Click here for details.

Want KHQ Super Alerts delivered straight to your inbox each week? Click here to subscribe.

KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in the superannuation & financial services team, and has a broad range of experience working with a range of superannuation fund trustees, superannuation administrators,... Read More

KHQ Lawyers - Natalie Cambrell

Natalie Cambrell Director

Natalie Cambrell leads our superannuation and financial services team.  With more than 20 years’ experience, she has an enviable reputation for her in-depth knowledge in these highly regulated and... Read More