Welcome to the latest issue of the KHQ Super Alert. This week the government announced it would extend the temporary changes to minimum pension drawdown rates for another year. Treasury commenced consultation in relation to some family law matters, and the Your Future, Your Super Bill will now move to the Senate after the House of Representatives passed it with one amendment.
Parliament – Your Future, Your Super reforms
On 3 June 2021, the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 passed the House of Representatives and will now proceed to the Senate (the Senate will next meet on 15 June 2021). One amendment was agreed to which was to ‘remove the regulation making power to prohibit a trustee of a registrable superannuation entity from making certain payments or investments’.
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APRA – Opening statement to Senate Economics Legislation Committee
On 2 June 2021, APRA published the opening statement made by its chair, Wayne Byres to the Senate Economics Legislation Committee. Mr Byres made the following comments:
- ‘fund mergers and product closures have become more commonplace, as trustees are forced to ask whether their members would be better served in another product or fund. To give an example, the number of funds has fallen from 279 in 2013, when the Stronger Super reforms were introduced, to 170 today – a decline of more than 100, with more exits to come’;
- ‘fees are continuing to decline, as more transparency forces trustees to look harder at them, particularly on a relative basis, and also enables their members to better understand the fees they pay. As an example, since the first MySuper heatmap in December 2019 and the update a year later, 71 per cent of MySuper members saw a reduction in fees and costs, with an aggregate overall saving of over $400 million’; and
- in relation to the review of trustee expenditure, ‘it is fair to say that industry practice, in terms of demonstrating how certain expenditure translates to quantifiable benefits to members, varies considerably. We expect to be in a position to determine next steps, including whether any enforcement action is appropriate and/or whether adjustments to prudential requirements are necessary, in the coming months’.
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Treasury – Consultation in relation to improving visibility of superannuation in family law matters
On 31 May 2021, Treasury released exposure draft legislation in relation to improving the visibility of superannuation assets in family law proceedings. The legislation proposes to amend the Taxation Administration Act 1953 and the Family Law Act 1975 to:
- ‘facilitate the identification of superannuation assets by parties to family law proceedings, leveraging information held by the [ATO]’;
- provide ‘for a party to family law property proceedings in the Family Court of Australia, Federal Circuit Court of Australia and Family Court of Western Australia to apply to the court to request information about the identity and value of their former partner’s superannuation assets from the ATO’; and
- ‘authorise the ATO to disclose this superannuation information to court registry staff for the purpose of relevant family law proceedings’.
The consultation period closes on 28 June 2021.
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Parliament – Reduction in minimum pension drawdown rates extended
On 29 May 2021, the Government announced that it would extend ‘the temporary reduction in superannuation minimum drawdown rates for a further year to 30 June 2022’. Last year, the Government ‘reduced the superannuation minimum drawdown rates by 50 per cent for the 2019‑20 and 2020‑21 income years’. This was given effect by the Coronavirus Economic Response Package Omnibus Act 2020. Although the government announcement has been made, the relevant legislation to support the change has not yet been released.
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