Superannuation Alert 09.09.16
Financial Services eBulletin - 9 September 2016
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 31 August 2016, the Budget Savings (Omnibus) Bill 2016 (Bill) was introduced into the House of Representatives, and received its second reading speech on the same day. According to its Explanatory Memorandum (EM), the Bill proposes a new Single Touch Payroll (STP) reporting framework 'for substantial employers to automatically provide payroll and superannuation information to the [ATO]'. To allow these new procedures to be implemented, the Bill makes minor amendments to various pieces of legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Taxation Administration Act 1953 (Cth).
- On 7 September 2016, ASIC issued a media release stating that ING Bank (Australia) Limited will compensate members for potentially misleading statements that were made in connection with the ING Direct Superannuation Fund product, 'Living Super'. The compensation is for approximately 24,500 members and worth $5.38 million. ASIC raised concerns with ING Bank regarding a promotion of Living Super that took place between March 2015 and September 2016. The promotion suggested that Cash Investment Options would have no fees and the Balanced Option would have no investment and administration fees but did not make it clear that there would be a lower interest rate for the cash investment portion with ING Bank than the rate paid by ING Bank to its Savings Maximiser customers. ASIC noted that promotions which use product incentives separate from the superannuation product such as cash payments are bad practice and "encourage decisions to be made on the basis of short term considerations that may not reflect the needs of a member".
- On 8 September 2016, the Federal Treasury released the following draft legislation for public consultation:
The draft legislation aims to give effect to various superannuation measures which were announced in the 2016-17 Budget. These include:
- enshrining the primary objective of the superannuation system into legislation;
- expanding the Superannuation Industry (Supervision) Act to allow funds to accept contributions from people aged 65-74;
- introducing a Low Income Superannuation Tax Offset;
- providing tax deductions for personal contributions (whether individual is employed or unemployed); and
- providing tax offsets for spouse contributions.
A key proposal is for every future superannuation Bill or regulation to outline the primary objective of the superannuation system at the outset. The Government has also identified "subsidiary objectives" to be considered in assessing any future superannuation Bills or regulations. Submissions in relation to the draft legislation are due by 16 September 2016. The Government will consult with stakeholders and intends to have all legislative amendments in operation from 1 July 2017.
Emilia Michael | Lawyer
+61 3 9269 9580
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