Superannaution Alert - 24.4.14

Financial Services eBulletin - 24 April 2014

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

  • On 15 April 2014, the FSC issued a media release recommending the following changes to Australia's retirement policy:
    • increasing the superannuation access age to 65; 
    • tightening eligibility rules for the Age Pension; 
    • reforming early access arrangements for superannuation for those unable to work to a higher preservation age; and
    • linking the age of retirement to life expectancy through a formal process guided by the Government Actuary.

  • On 16 April 2014, the ATO provided the following updates on its website: 
  • On 16 April 2014, Treasury made available its response to submissions received on its April 2013 discussion paper, Financial industry supervisory levy methodology. In its response, Treasury concluded that:
    • there is a need to clarify when the levies are being used to recover costs in a manner consistent with the Government’s Cost Recovery Guidelines;
    • there should be increased transparency of how the costs of an activity are recovered through the levies process; - the lower supervisory activity required for prudentially regulating pooled superannuation trusts could be recognised through lower levy rates compared to other superannuation entities; and
    • in the 2014-15 annual levies consultation process, consideration should be given to modelling the use of the number of superannuation fund members as the levy base (instead of asset value) for SuperStream to gain further feedback from industry.

  • On 16 April 2014, the Fair Work Commission released a number of draft determinations relating to its review in 2013 of default funds in modern awards. The draft determinations respond to applications made seeking the reinstatement of default funds in modern awards which were deleted as part of the 2013 review. The closing date for submissions regarding the draft determinations is 5 May 2014.

  • On 16 April 2014, the Fair Work Commission released information about the 2014 review of default funds, noting that Applications relating the listing of standard MySuper products on the Default Superannuation List have been received.

  • On 17 April 2014, the President of the Fair Work Commission released a Statement regarding the composition of the Expert Panel for purposes of the 4 yearly review of default fund terms of modern awards. Specifically, the statement notes the 7 March 2014 direction in relation to two of the previous members (Expert Panel Members Allen and Gibbs) to stand down from the panel due to potential conflicts of interest, and the appointment of Expert Panel Member Harcourt. The statement by President Ross then concluded: "In order to put beyond doubt that the quorum requirement for the Expert Panel … is met, I will now join the Expert Panel… In my view this resolves any uncertainty that the Expert Panel is properly constituted."

  • On 22 April 2014, it was reported in the Australian Financial Review that the Minister for Employment Eric Abetz "is at loggerheads with the Fair Work Commission, demanding its president Iain Ross scrap the process for reviewing which superannuation funds will receive billions of dollars in workers' retirement savings" (page 1). It was also reported that "It seems certain that there will be some legal action from the [Financial Services Council] before next Monday's deadline for submissions for inclusion in the Fair Work Commission's short list of MySuper default funds" (page 48). However, the President of the Fair Work Commission issued a Media Statement on 22 April 2014 which notes that clarification regarding the proper constitution of the Expert Panel has been given (noted above) and that the directions regarding the Panel's determination of the review have not changed. Accordingly, the President stated that the 28 April 2014 deadline remains in place for submission of applications to have a standard MySuper product included on the Default Superannuation List and applications to have an employer MySuper product included on the Schedule of Approved Employer MySuper Products.

  • On 23 April 2014, the FSC issued a media release indicating it has sought an urgent hearing before the FWC prior to the 28 April deadline and is requesting a seven day extension.

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.