Superannuation Alert 24.03.16
Financial Services eBulletin - 24 March 2016
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 15 March 2016, the Senate Economics Legislation Committee tabled its report on the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 (Cth), recommending that the Bill be passed by the Senate. On 16 March 2016 the Bill was introduced to the Senate and the second reading was moved. According to the Explanatory Memorandum, the Bill proposes to:
- amend the Corporations Act 2001 (Cth) to remove the "ban on conflicted remuneration for benefits paid in relation to certain life risk insurance products";
- enable ASIC to "make a legislative instrument to permit benefits in relation to life risk insurance products to be paid, provided certain requirements are met"; and
- introduce "a ban on volume based payments in life risk products" and provide for transitional arrangements in the Corporations Act 2001 (Cth).
- On 16 March 2016, the Treasury Legislation Amendment (Repeal Day 2015) Bill 2016 was passed by the House of Representatives with 2 Opposition amendments. On the same day, the second reading was moved in the Senate. According to the Explanatory Memorandum, the Bill seeks to amend (among other things):
- the Superannuation Guarantee (Administration) Act 1992 (Cth) to align the:
- earnings base for calculating the superannuation guarantee (SG) charge (current salary or wages) with the earnings base for calculating SG contributions (ordinary time earnings); and
- "nominal interest on unpaid or late SG contributions with the period over which they are actually outstanding";
- the Crimes (Taxation Offences) Act 1980 (Cth), Superannuation Guarantee (Administration) Act 1992 (Cth) and Taxation Administration Act 1953 (Cth) to align the penalties imposed under the SG system with the administrative penalties enforced by the Taxation Administration Act 1953 (Cth); and
- the Income Tax Assessment Act 1997 (Cth), Small Superannuation Accounts Act 1995 (Cth), Superannuation Guarantee (Administration) Act 1992 (Cth) and Superannuation (Unclaimed Money and Lost Members) Act 1999 (Cth) to allow the Commissioner of Taxation "to pay certain superannuation amounts directly to individuals with a terminal medical condition and to remove the requirement for superannuation funds to lodge a separate biannual lost members statement with the Commissioner".
- On 16 March 2016, the Productivity Commission (Commission) released the issues paper titled 'Superannuation Efficiency and Competitiveness' which sets out the scope of the Commission's study of the efficiency and competitiveness of the superannuation system. The issues paper also outlines the matters about which the Commission is seeking input from individuals and organisations interested in making a submission. Submissions close on 20 April 2016.
- On 17 March 2016, the Superannuation Legislation Amendment (Choice of Fund) Bill 2016 was introduced to the House of Representatives and the second reading was moved. According to the Explanatory Memorandum, the Bill amends the Superannuation Guarantee (Administration) Act 1992 (Cth) to "ensure employees under new workplace determinations or enterprise agreements that are made from 1 July 2016 have an opportunity to separately choose their superannuation fund."
- On 17 March 2016, the Superannuation Legislation Amendment (Transparency Measures) Bill 2016 was introduced to the House of Representatives and the second reading was moved. According to the Explanatory Memorandum, the Bill amends the Corporations Act 2001 (Cth) by (among other things):
- limiting the "requirement to provide a choice product dashboard to a superannuation fund's ten largest choice investment options, as measured by FUM [funds under management], instead of for all investment options";
- introducing a new power to "prescribe in regulations how a product dashboard must be displayed on a fund's website…[regarding] both MySuper products and choice investment options";
- excluding "certain types of choice investment options…from the requirement to provide a product dashboard [and introducing] a power to exclude further types of products by regulation"; and
- removing the obligations on RSE licensees to "include information about financial products, or other property that non-associated entities have directly invested in", as well as removing the "reporting obligations on parties to contracts and arrangements that acquire a financial product using the assets, or assets derived from assets, of an RSE."
- On 18 March 2016, the Corporations Amendment (Financial Advice Measures) Bill 2016 received Royal Assent. The Bill amends the Corporations Act 2001 (Cth) to "remove the seventh step (the “catch all”) from the steps an advice provider may take in order to satisfy best interest obligations, enable clients and providers to agree on the scope of advice to be provided, remove the renewal notice obligations for fee recipients, remove the requirement to provide yearly fee disclosure statements to certain clients, provide for a general advice exemption to exempt benefits that relate to general advice from the ban on conflicted remuneration in certain circumstances and make consequential amendments."
- On 21 March 2016, ASIC released its consultation paper titled 'CP 254 Regulating digital financial product advice' which provides guidance on ASIC's approach to regulating digital financial advice or "robo-advice". ASIC proposes to:
- develop a draft Regulatory Guide to assist digital advice providers to comply with the law;
- require digital advice licensees to have at least one appropriately trained responsible manager to ensure compliance with s 912A(1)(e) of the Corporations Act 2001 (Cth); and
- issue guidance on the ways in which digital advice licensees should monitor and test algorithms which support the digital advice being provided.
Comments on the proposals in the consultation paper can be made until 16 May 2016.
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.