Superannuation Alert 16.12.16
Financial Services eBulletin - 16 December 2016
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 1 December 2016, the Senate referred to the Standing Committee on Economics an inquiry into the Superannuation Guarantee (SG) non-payment. Some of the Terms of Reference for the inquiry include:
- the economic impact on workers, their superannuation balances, and retirement incomes;
- the accuracy of information and data collected by the ATO, APRA and ASIC on SG non-payment;
- the role and effectiveness of the ATO in monitoring investigations and seeking recovery of unpaid SG; and
- the appropriateness of the ATO's responses to 'tip-offs' regarding SG non-payment.
- On 2 December 2016, the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2016 and Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill (No 2) 2016 received Royal Assent. These Bills concern the rate of tax applied to superannuation payments paid to "working holiday makers" leaving Australia permanently. The tax rate applying to such payments under the legislation is 65% (with the Government having initially proposed a rate of 95%). Further information is available in the relevant Explanatory Memorandum.
- On 6 December 2016, the Queensland Court of Appeal handed down its decision in The Queensland Local Government Superannuation Board v Allen  QCA 325. This case concerned a claim for a total and permanent disability benefit which was denied by the trustee. The claimant sought disclosure of legal advice provided to the trustee in relation to the claim. At first instance the trial judge granted the order, finding that the trustee had waived legal professional privilege concerning the legal advice. On appeal, the Court decided that the primary judge had erred. The Court found that the trustee had not placed any reliance on the legal advice in considering Ms Allen's claim and, therefore, privilege had not been waived.
- On 7 December 2016, the ATO published an information page regarding changes in light of the recently-passed superannuation budget reform legislation. The page gives an overview of the changes for APRA-regulated funds, describes how users can stay informed as more information becomes available, and foreshadows further guidance in the coming weeks.
- On 9 December 2016, the Government released an exposure draft of Treasury Laws Amendment (2017 Measures) Bill 2017 which proposes to facilitate easier information sharing between ASIC and the ATO. The Explanatory Memorandum provides that the Bill would "allow [ASIC] to more readily share confidential information with the Commissioner of Taxation [which would] assist both ASIC and the Commissioner of Taxation to perform their functions more effectively."
- On 12 December 2016, ASIC published a report (ASIC Report 506 Overview of decisions on relief applications (April to September 2016)) outlining recent decisions on relief applications. The accompanying media release states that the report "summarises examples of situations where [ASIC] have exercised, or refused to exercise, ASIC’s exemption and modification powers" including from the financial services provisions of the Corporations Act 2001 (Cth). In one instance an application was brought by an entity seeking relief from the requirement to hold an AFS licence for distributing a "robo-advice" financial product. The product was intended to provide individuals with automated advice by way of a retirement income calculator on the websites of superannuation trustees. ASIC denied the application, finding that ‘granting relief would have had a significant regulatory detriment.’
- On 13 December 2016, the Government published a proposal paper seeking feedback on the implementation of recommendations made by the Financial Systems Inquiry (FSI) in 2015. The key recommendations presented in the proposal paper are:
- "design and distribution obligations for financial products to ensure that products are targeted at the right people (FSI recommendation 21); and
- a temporary product intervention power for the Australian Securities and Investments Commission when there is a risk of significant consumer detriment (FSI recommendation 22)."
- On 14 December 2016, the ATO published Draft Law Companion Guideline LCG 2016/D11 in its series of guidance explaining how the Commissioner will apply the changes brought about by the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016. This Guideline "clarifies how the amendments to the calculation of concessional contributions and excess concessional contributions in the Act apply to contributions and amounts allocated by superannuation providers for the financial years commencing on or after 1 July 2017."
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.