Welcome to the latest issue of the KHQ Super Alert. It was a busy week this week with the Government announcing its intention to increase the concessional tax rate for super accounts with balances above $3 million. ASIC released its report on good practices for handling whistleblower disclosures, and the OAIC released its latest notifiable data breaches report.
ASIC – Report on handling whistleblower disclosures
On 2 March 2023, ASIC released a report summarising the good practices it identified during its review of whistleblower programs. Throughout 2022, ASIC reviewed the whistleblower programs of seven entities (including two superannuation trustees), focusing on their ‘arrangements for handling and using information collected from whistleblower disclosures, and the level of executive and board oversight of those arrangements’.
ASIC identified that the stronger programs had:
- ‘fostered a culture and practices to support whistleblowers’;
- ‘informed and trained’ relevant staff about ‘protecting whistleblowers and treating material confidentially’;
- ‘monitored, reviewed and improved the program, including seeking feedback from whistleblowers’;
- ‘used information from disclosures to address underlying harms and improve company performance’;
- ‘embedded senior executive accountability for the program’; and
- ‘created frameworks to entrench effective director oversight’.
ASIC expects entities ‘to analyse the features and good practices identified in this report and consider how they can be scaled and tailored to suit their operations’.
Click here and here for details.
APRA – Release of SDT Strategic Forum notes
On 2 March 2023, APRA released the notes from the 14 February 2023 Superannuation Data Transformation Strategic Forum (SDT Strategic Forum). The SDT Strategic Forum provides the opportunity for industry stakeholders ‘to contribute to APRA’s understanding and resolution of the challenges for implementing and transitioning to the new superannuation data collections’.
APRA also communicated that it will ‘update the timeframes for the consultations on reporting under Phase 2 of SDT’, reducing them to ‘two per financial year while still allowing for consultation during the peak year-end reporting period’.
The next SDT Strategic Forum will be held on 16 May 2023.
Click here for details.
OAIC – Notifiable Data Breaches Report for second half of 2022
On 1 March 2023, the OAIC issued a media release titled Cyber security incidents impact data breach risk as well as the July to December 2022 Notifiable Data Breaches Report (Report). The Report identifies that there was a 26% increase in data breaches notified to the OAIC in the second half of last year compared to the first half of the year. ‘Health service providers’ and ‘Finance (incl. superannuation)’ were the top two notifiers of data breaches (71 and 68 data breaches respectively). According to the Report, 62% of data breaches affected 100 or less individuals.
Click here for details.
Treasury – Proposed adjustments to concessional tax rate from 2025
On 28 February 2023, the Treasurer (the Hon Jim Chalmers MP) and the Assistant Treasurer and Minister for Financial Services (the Hon Stephen Jones MP) issued a joint media release announcing the Government’s intention to increase the concessional tax rate that applies to superannuation account balances above $3 million.
It is proposed that ‘[f]rom 2025-26, the concessional tax rate applied to future earnings for [superannuation] balances above $3 million will be 30 per cent’, instead of the current 15%. According to the media release, this will ‘not impose a limit on the size of superannuation account balances in the accumulation phase’, it will apply to future earnings, and will not be retrospective.
Enabling legislation will be introduced ‘as soon as practicable’ and consultation with the superannuation industry will be undertaken ‘to settle the implementation of the measure’.
Click here for details.
APRA – Release of quarterly superannuation statistics
On 28 February 2023, APRA released the superannuation statistics for the quarter ending December 2022. Some key statistics include:
- total superannuation assets in Australia were $3,386.9 billion as at December 2022 (a 3% decrease from December 2021);
- $30.3 billion in employer contributions and $8.2 billion in member contributions were made for the quarter; and
- a total of $24.9 billion in benefit payments were made for the quarter.
Click here for details.
AFCA – Updates to superannuation fees and charges guidance
On 27 February 2023, AFCA updated its factsheet titled Approach to superannuation fees and charges to address ‘grandfathered commission arrangements’ and update its case studies.
AFCA notes that ‘[t]he changes address ‘grandfathered’ commission arrangements, and acknowledge that under the Future of Financial Advice reforms to the Corporations Act 2001 (Cth) benefits and commissions given to a financial services licensee or representative under arrangements entered into before 1 July 2013 were allowed to continue until 1 January 2021.’
According to AFCA, it ‘considers a trustee’s decision not to refund a fee or charge for access to financial advice debited to an account before 1 July 2013 is fair and reasonable, as long as the fee was permissible, the agreed or required advice service was provided, and the fee was sufficiently and meaningfully disclosed’. AFCA will consider the terms of the grandfathered arrangement and governing rules of the fund in determining the same issue for ‘commissions paid before 1 January 2021 under ‘grandfathered’ arrangements’.
Click here for details.
ATO – Release of new data in relation to lost and unclaimed super monies
On 27 February 2023, the ATO issued two media releases titled Check your myGov account for your share of $16 billion in lost and unclaimed super and Super data: lost, unclaimed, multiple accounts and consolidations. According to the ATO, there has been an increase of $2.1 billion in lost and unclaimed super across Australia since the last financial year, with the ATO currently holding $5.6 billion and super funds currently holding $10.4 billion in lost superannuation.
Click here and here for details.
This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
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