Welcome to the latest issue of the KHQ Super Alert. This week, a Bill which proposes to increase the financial reporting and auditing requirements of RSEs was introduced into Parliament. APRA published new frequently asked questions relating to the member outcomes assessment and also released a consultation paper in relation to its Superannuation Data Transformation project.
APRA – Member outcomes assessment FAQs updated
On 24 February 2022, APRA published an updated set of frequently asked questions (FAQs), including two new FAQs, in relation to the outcomes assessment under section 52(9) of the SIS Act. The update to the FAQs follows a review undertaken by APRA, discussed in our Super Alert of 29 October 2021. The two new FAQs are:
- Which annual outcomes assessment must be incorporated in the annual business performance review?’
- ‘When does an entity need to undertake its business performance review?’
Click here for details.
ATO – ECPI Bill receives Royal Assent
On 23 February 2022, the ATO issued a media release advising that the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 (Bill) received Royal Assent on 22 February 2022. The Bill, which was discussed in our Super Alert of 18 February 2022, amends several Acts.
Most relevantly for trustees, the Bill amends the Income Tax Assessment Act 1997 to ‘enable superannuation trustees to choose their preferred method of calculating exempt current pension income when they have member interests in both accumulation and retirement phases for part, but not all, of the income year’.
Click here for details.
ATO – Fund reporting obligation challenges
On 21 February 2022, the ATO issued two media releases advising trustees:
- of the ‘[common] errors [it] receives through SuperStream messaging’; and
- that ‘funds and administrators who manage their own machine credential…[should] check the expiration of those credentials’.
Click here and here for details.
Legislation – Super co-contributions regulations registered
On 18 February 2022, the Superannuation (Government Co-contribution for Low Income Earners) Regulations 2022 (Regulations) were registered on the Federal Register of Legislation. The registration of the Regulations follows an earlier Treasury consultation on the Regulations, which was discussed in our Super Alert of 21 January 2022. The Regulations:
- ‘remake and improve the operation of the Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004 (Superseded Regulations) before they ‘sunset’…by omitting redundant provisions, simplifying language and renumbering provisions for ease of navigation’;
- differ from the Superseded Regulations by stipulating that ‘an account that only allows benefits to be released due to a member’s death, terminal medical condition or permanent or temporary incapacity will not be an eligible account’; and
- specify ‘where a Government co-contribution is to be directed depending on an individual’s circumstances’ and clarifies that ‘in the event of multiple circumstances being applicable…only one [circumstance] will apply’.
Click here for details.
APRA – Consultation on superannuation data publications and confidentiality
On 18 February 2022, APRA released for consultation a discussion paper which outlines ‘the proposals for the publication and the confidentiality of data reported under the new superannuation reporting standards’. We have previously discussed the new reporting standards in our Super Alert of 23 September 2021. The discussion paper is part of APRA’s ‘Superannuation Data Transformation’ project, which is a ‘multi-year project to upgrade the breadth, depth and quality of its superannuation data collection’.
According to APRA, ‘[given] the scale and complexity of the project, [it] has divided the consultation into three phases:
- Phase 1 (Breadth) will address the most urgent gaps in APRA’s data collection, particularly for choice products and investment options;
- Phase 2 (Depth) will increase the granularity of the entire collection, taking advantage of APRA’s new Data Collection Solution and enhanced data analytic capabilities; and
- Phase 3 (Quality) will assess the quality and consistency of the additional data reported during Phases 1 and 2, and review and address any implementation issues’.
Submissions on the Phase 1 proposals are due by 15 April 2022. Following this, ‘APRA intends to issue its final determinations around data confidentiality in June, with the first statistical publication under the new reporting standards released soon after’.
Click here for details.
Parliament – Bill in relation to financial and auditing requirements for superannuation funds introduced
On 17 February 2022, the Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022 (Bill) was introduced into the House of Representatives. Schedule 2 of the Bill, which proposes amendments to ‘the Corporations Act, the ASIC Act and the SIS Act’ (Acts), was released for consultation by Treasury in the middle of 2021 (see our Super Alert of 13 August 2021).
The proposed amendments to the Acts ‘extend and adapt the financial reporting and auditing requirements in Chapter 2M of the Corporations Act to apply to [RSEs]’. Specifically, the proposed amendments to the Acts will require a [RSE], amongst other things, to:
- ‘prepare and lodge financial reports for each financial year with ASIC’;
- ‘make the financial report, directors’ report and auditor’s report for each financial year publicly available on the entity’s website’;
- ‘provide the entity’s financial reports for a specific financial year to a member upon request’; and
- ‘prepare an auditor’s report for an audit of an entity’s financial report’.
Click here for details.
Parliament – Modernising business communication Bill introduced
On 17 February 2022, the Treasury Laws Amendment (Modernising Business Communications) Bill 2022 (Bill) was introduced to the House of Representatives. The introduction of the Bill follows the Government’s recently-concluded consultation on the Bill, which was discussed in our Super Alert of 26 November 2021.
The Bill proposes to:
- establish a ‘global communication regime for documents sent under the Corporations Act…[which] includes providing for relief where communication with a person is not possible due to a lack of current contact details for that person’; and
- modernise ‘publication requirements in various Treasury portfolio laws’.
Click here for details.
