Super Alert – 27 November 2020

Welcome to the latest issue of the KHQ Super Alert. This week the Treasury released draft legislation to implement the ‘Your Future, Your Super’ budget reforms, and APRA announced a new CPS 234 expectation for all boards to engage external firms to conduct a thorough cyber security review. The ATO has given a reminder about deadlines for early release applications, and ASIC has released a consultation paper in relation to its protocol for reference checking financial advisers.

KHQ Lawyers - Super Alert

Treasury – Your Future, Your Super draft legislation

On 26 November 2020, the Treasury released a series of exposure draft Bills for public consultation in relation to the ‘Your Future, Your Super’ package of reforms that were announced as part of the Federal Budget. The draft Bills propose amendments to the SIS Act and SG Administration Act to:

  • require ‘employers to make contributions into an employee’s existing fund, if new employees have one and do [not] choose a fund to receive contributions’;
  • require ‘APRA to conduct an annual performance test for MySuper products, and other products specified in regulations. Trustees will be required to give notice to members when a product fails the test. Where a product has failed the performance test in two consecutive years, the trustee is prohibited from accepting new beneficiaries into that product. APRA may lift the prohibition if circumstances specified in the regulations are satisfied’;
  • provide ‘certainty and transparency about the basis by which superannuation products will be ranked and published on a website maintained by the ATO’; and
  • require ‘trustees to act in the best financial interests of their members. This reform ensures trustees are focused on members’ financial interests when they undertake the many actions in operating a superannuation entity. These actions include incurring day-to-day essential operational expenditure and investing members’ money, to less frequent strategic decisions and discretionary expenditures’.

Submissions on the exposure draft materials closes on 24 December 2020.

Click here for details.

APRA – Cyber security speech by Geoff Summerhayes

On 26 November 2020, APRA published a speech delivered by its Executive Board Member, Geoff Summerhayes. Mr Summerhayes’ comments included:

  • ‘[the] unexpected and rapid transition to online and remote working arrangements that took place around March has increased [cyber] risks. In prioritising their ability to keep operating, many of the entities [APRA] regulate[s] needed to make compromises to their normal information security protocols to facilitate the sudden switch to remote work arrangements for most or all employees’; and
  • APRA is ‘going to take a much more targeted approach to ensuring CPS 234 is being fully complied with, and holding boards and management accountable where it is not…APRA will shortly be requesting one-off tripartite independent cyber security reviews across all [its] regulated industries. Starting next year, APRA will be asking boards to engage an external audit firm to conduct a thorough review of their CPS 234 compliance and report back to both APRA and the board’.

Click here for details.

ATO – Early release deadlines

On 26 November 2020, the ATO issued a notice to trustees encouraging them to remind members of the Christmas deadlines for applying for the COVID-19 early release scheme (which ends on 31 December 2020), or a determination letter for compassionate release of super. The deadlines are as follows:

  • if members would like to receive their COVID-19 early release before Christmas, they must apply to the ATO before 11 December 2020; and
  • if members require a compassionate release of super determination letter before Christmas, they must apply to the ATO by 4 December 2020.

Click here for details.

APRA – Quarterly superannuation statistics

On 24 November 2020, APRA released the quarterly superannuation statistics for the quarter ending on 30 September 2020. According to APRA, there was a 1.6% drop in total superannuation assets compared to this time last year and this was primarily due to ‘investment losses sustained across the industry during the March quarter’. However, there was a 4.1% increase in employer contributions during the quarter as contributions were ‘buoyed by JobKeeper payments’.

Click here for details.

ASIC – Checking of financial advisers consultation

On 19 November 2020, ASIC released consultation paper CP 333 seeking feedback from the public in relation to ‘a new reference checking and information sharing protocol for financial advisers and mortgage brokers’. The Financial Sector Reform (Hayne Royal Commission Response) Bill 2020, referred to in our Super Alert of 13 November 2020, introduces a requirement for all AFSL holders to comply with ASIC’s protocols and undertake a reference check ‘on an individual seeking to be employed or authorised as a financial adviser’. This consultation paper explains what the proposed ASIC protocol will be.

Submissions on the consultation paper close on 29 January 2021.

Click here for details.

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 Principal Solicitor

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