Superannuation Alert - 11.6.14

Financial Services eBulletin - 11 June 2014

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

According to the explanatory memorandum, the main purposes of the Act are to correct technical errors that have occurred in the above legislation as a result of drafting and clerical mistakes and to repeal spent and obsolete provisions and legislation. Commencement details are included in section 2 of the Act.

  • On 29 May 2014, a letter was sent from the Actuaries Institute to Treasury and the ATO raising a number of issues associated with defined benefit aspects of the Division 293 tax legislation, mainly relating to end benefits and end benefit caps. In particular, the Actuaries Institute noted that it was concerned that funds are likely to incur significant costs to enable them to meet their reporting obligations in respect of end benefit caps and that these costs are likely to be disproportionate to any tax savings that accrue to members as a result of the caps. The Actuaries Institute suggested that costs for funds could be reduced if legislation specified a default formula for calculation of the end benefit cap, with funds permitted to adopt tailored formulae.

  • On 30 May 2014, a letter was sent from APRA to all registrable superannuation entity licensees announcing that it has identified five annual and ad-hoc reporting standards which would benefit from amendment. The affected reporting standards include:
    • Reporting Standard SRS 001.0 Profile and Structure (Baseline);
    • Reporting Standard SRS 330.1 Statement of Financial Performance;
    • Reporting Standard SRS 330.2 Statement of Financial Performance;
    • Reporting Standard SRS 800.0 Financial Statements; and
    • Reporting Standard SRS 801.0 Investments and Investment Flows.

Revised versions of the reporting standards, forms and instructions are included in the letter.
In addition, it was noted that Reporting Standard SRS 110.1 Selected Disclosure of Investments (SRS 110.1) is being continued for reporting periods ending on or after 1 July 2014 in order to prevent data gaps and ensure continuity in the Australian Bureau of Statistics (ABS) publications until the implementation of the additional ABS data collection, which is proposed to commence in 2016.
The revised reporting standards take effect from:

  • 30 June 2014 (SRS 001.0, SRS 330.2, SRS 800.0 and SRS 801.0); and 
  • 1 July 2014 (SRS 110.1 (as continued) and SRS 330.1).
  • On 6 June 2014, a full bench of the Federal Court declared invalid the direction given by Justice Iain Ross, President of the Fair Work Commission, to appoint himself to the expert panel conducting the review of default superannuation funds in modern awards. It also declared that the purportedly reconstituted expert panel had not been correctly reconstituted in accordance with the requirements of the Fair Work Act 2009 (Cth).

  • On 6 June 2014, the Australian Accounting Standards Board released a new Standard, AASB 1056 Superannuation Entities, which replaces AAS 25 Financial Reporting by Superannuation Plans. AASB 1056 has been developed in light of significant changes in recent years, including developments in the superannuation industry and Australia's adoption of the International Financial Reporting Standards. It also addresses deficiencies in AAS 25 and makes the requirements for superannuation entities more consistent with requirements in the Australian Accounting Standards.

  • The ATO has recently released or updated the following publications:
  • AUSTRAC recently released AUSTRAC funds flows analysis: 2012-13 (June 2014) which reports there has been less money flowing to tax secrecy havens than five years ago, with a decrease of 13 per cent in the value of outward funds flows from Australia to tax secrecy jurisdictions in 2012–13 compared to 2007–08.

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.