Welcome to this week’s issue of the KHQ Super Alert. ASIC and APRA have released their long-term corporate plans and the Bill to increase the number of members in an SMSF was introduced in the Senate. The ATO also provided an update in relation to reporting for market linked pensions.
Legislation – extension of early release scheme
On 3 September 2020, the Treasury Laws Amendment (Release of Superannuation on Compassionate Grounds) Regulations (No. 3) 2020 was registered on the Federal Register of Legislation. These regulations make amendments ‘to extend the deadline by which applications must be made for coronavirus related early release from superannuation and retirement savings accounts to 31 December 2020’. The SIS Regulations currently specify that the cut-off time is 24 September 2020.
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Federal Parliament – Superannuation Bills
On 3 September 2020, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 received Royal Assent and is now Act no. 80 of 2020. As referred to in our Super Alert last week, the Act amends the SG Act ‘to provide that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund’.
On 2 September 2020, the Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 was introduced in the Senate and received its second reading. The Bill proposes to amend the SIS Act and taxation laws in order ‘to increase the maximum number of allowable members in SMSFs from four to six’. This change was announced in the 2018/19 Federal Budget.
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ATO – commutations of market linked pensions
On 1 September 2020, the ATO advised that it would be delayed in publishing its guidance in relation to the reporting required for ‘calculating the debit which arises in an individual’s transfer balance account…when a member commutes a market linked pension which is a capped defined benefit income stream’. On 19 June 2020, the ATO had advised that due to the Treasury Laws Amendment (2019 Measures No. 3) Act 2020, trustees would be required to provide retrospective reports to the ATO in relation to any commutations since 1 July 2017 of a marked linked pension which is a capped defined benefit income stream.
The ATO has spoken to trustees and understands that calculating the required amounts is proving to be challenging. Accordingly, due to the ATO’s delay in providing additional guidance, it has now advised that trustees do not need to ‘begin to commence their retrospective reporting until November 2020’ when the updated guidance is released.
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APRA – Corporate Plan
On 31 August 2020, APRA published its Corporate Plan for 2020-2024. APRA’s strategic priorities are to:
- ‘achieve strong regulatory outcomes and minimise the regulatory burden by aligning its policy work to APRA’s strategic priorities of maintaining financial system resilience and improving outcomes for superannuation members in the immediate term’;
- ‘assess the impact of the evolving external environment on superannuation funds and their members by focussing on key areas of liquidity and investment risk, defined benefit funds, vulnerabilities arising from loss of member accounts and changing member activity and the operational resilience of key service providers including superannuation administrators’;
- ‘assess the impact of COVID-19 on superannuation funds and their members by collecting industry-wide data and monitoring the impact of the temporary early release of superannuation scheme’; and
- ‘continue to ensure superannuation fund members are protected by robust governance practices and operational controls and systems, designed to safeguard members’ funds’.
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ASIC – Corporate Plan
On 31 August 2020, ASIC published its Corporate Plan for 2020-2024. ASIC has advised that its ‘longer term focus areas’ in relation to superannuation include:
- ‘monitoring the impact of the COVID-19 pandemic on the insurance offerings of superannuation trustees’;
- conducting ‘surveillance to ensure that [ASIC’s] temporary relief measure to allow trustees to provide more affordable and accessible advice to members about the early release of superannuation is not abused’;
- conducting ‘surveillance of trustee communications to members about the impact of the COVID-19 pandemic and resultant legislative measures on superannuation funds and member benefits’; and
- ‘delivering as a conduct regulator for superannuation’.
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APRA – superannuation data collection
On 28 August 2020, APRA released ‘the final consultation package for Phase 1 of its project to expand the breadth, depth and consistency of its superannuation data collection’. Several topic papers, draft reporting standards and data collection templates have been released for industry feedback. These materials relate to four key data areas being fees and costs, insurance arrangements, expense reporting and asset allocation. Submissions close on 25 September 2020.
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