Super Alert – 5 March 2021

Welcome to the latest issue of the KHQ Super Alert. APRA has published the latest superannuation statistics and the Treasurer has released a speech that he delivered in relation to the Retirement Income Review. ASIC has also released a statement setting out how it intends to recover its costs from regulated entities. 

KHQ Lawyers - Super Alert

ASIC – Cost recovery implementation statement

On 4 March 2021, ASIC published its final cost recovery implementation statement for its 2019/20 regulatory activities. The statement ‘provides regulated entities with details of ASIC’s forecast regulatory costs and activities by industry and subsector’. In relation to the ‘investment management, superannuation and related services’ sector, the total levy is approximately $64.36 million which is 22% of the total $293.52 million of costs to be recovered. ASIC has advised that ‘[a]ll superannuation trustees will pay a minimum levy of $18,000’.

The levy relates to, amongst other things, the following activities:

  • ‘[i]mplementing Royal Commission and Productivity Commission law reform recommendations’;
  • ‘[s]trengthening ASIC’s role as conduct regulator’;
  • ‘[f]ees and costs disclosure in managed investments and superannuation;’ and
  • ‘[e]nhancing ASIC communication to superannuation trustees and their advisers’.

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APRA – Quarterly superannuation statistics

On 2 March 2021, APRA published the superannuation statistics for the December 2020 quarter. The report shows that there ‘was a 2.2 per cent increase in the value of total superannuation assets over the 12 months to 31 December 2020 as financial markets recovered’. Meanwhile, benefit payments were lower ‘as member demand for Early Release Scheme (ERS) payments diminished’. At the end of the December 2020 quarter, superannuation assets totalled $3.0 trillion.

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Treasurer – Speech in relation to Retirement Income Review

On 26 February 2021, the Treasurer delivered a speech in relation to the Retirement Income Review that was finalised last year. The Treasurer’s comments included the following:

  • ‘the cost-effectiveness of our system is not an accident. It is the product of sound design and prior reforms that have enhanced its sustainability…[this] means, unlike a lot of other countries around the world, we have a retirement income system that is both sustainable today and well into the future’;
  • evidence ‘shows compulsory superannuation has increased total household savings. Without compulsory superannuation, many Australians would not save enough for retirement…[and the] benefits of superannuation will grow as the system matures’; and
  • ‘[w]hile these key findings are overwhelmingly positive, the Review also found that complexity, low financial literacy and limited guidance means too many Australians don’t plan for their retirement or make the most of their savings when in retirement…[this] will continue to be an area of focus for the Government’.

It appears that, although there seems to be no formal response by the Government to the Review just yet, the Government has acknowledged that the Review will now form the ‘evidence base’ for further discussions. Accordingly, the Treasurer’s speech concluded as follows: ‘the [Review] tells us that we have much to celebrate. … But as the Review highlights, there is scope to improve the system and to continue to challenge ourselves with respect to the key trade-offs at the core of the system. The work of the Review now provides the evidence base to have these discussions and to consider what more we need to do to improve the system and ultimately help more Australians more effectively balance their lifetime incomes.’

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KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in the superannuation and 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