Superannuation Alert - 5.6.14

Financial Services eBulletin - 5 June 2014

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

  • On 26 May 2014, ASIC Class Order [CO 14/425] was registered. This class order amends ASIC Class Order [CO 10/630] to extend its maximum period of operation for a further 12 months, from 48 to 60 months (to 19 July 2015). The Class Orders relate to the operation of regulation 7.9.20AA of the Corporations Regulations 2001 which requires regulated superannuation funds (other than self-managed superannuation funds) to disclose long term performance returns to members.The latest Class Order will extend again the relief or time allowed for amending regulations to be made for the long-term superannuation reporting regime.

  • On 26 May 2014, Treasury and APRA released a joint Consultation Paper – Proposed Financial Industry levies for 2014-2015, to seek industry views on Financial Institutions Supervisory levies for the next financial year. The Paper presents two options for levy collection.

  • On 26 May 2014, ASIC released its May 2014 Report 395 – Overview of decisions on relief applications (October 2012 to January 2014). The report outlines some of ASIC decisions on relief applications, including examples of situations where ASIC has exercised its discretionary powers to grant relief from financial services provisions of the Corporations Act 2001. One relief application concerned superannuation, and was reported as follows: "We granted relief to two AFS licensees: a company operating a financial advice business and a superannuation trustee that held all of its shares. The relief facilitates new arrangements for representatives who provide financial product advice to members of the superannuation fund, as well as non-members, on behalf of both entities."

  • On 27 May 2014, APRA announced by letter to RSE licensees that it will defer the commencement date of its Superannuation Reporting Standard SRS 711.0 Superstream Benchmarking Measures to 1 July 2015. The deferral is in response to the Government's announcement to defer implementation of SuperStream contribution data standards until 1 July 2015. In the letter, APRA states that it proposes to consult further with the industry later in 2014 regarding the content of the SRS.

  • On 27 May 2014, ASIC issued a media release encouraging platforms to review ongoing compliance with ASIC class orders, particularly in preparation for the changes under new class orders that will, for established operators, come into effect on 1 July 2014. The release comes after ASIC has been working with a company following a breach by the company of Class Order [CO 02/296] Investor directed portfolio-like services provided through a registered managed investment scheme. Client funds were incorrectly invested in an unregistered management investment scheme, in breach of the class order. ASIC Commissioner Greg Tanzer said "it is important that licensees identify where a technical breach of the law can result in the potential loss of key protection measures for investors."

  • On 27 May 2014, the Superannuation Data and Payment Standards (Contribution Transitional Arrangements) Amendment 2014 was registered. The Standard applies to employers and trustees of superannuation entities that are not required to comply with the Superannuation Data and Payment Standards 2012. It amends the contribution transitional arrangements contained in schedule 1 to the Superannuation Data and Payment Standards 2012 to extend the existing contribution transition-in period by 12 months to 30 June 2017. The amendments commenced on 28 May 2014.

  • On 28 May 2014, a joint letter was sent from the ATO and APRA to RSE licensees, to remind them of trustee responsibilities in relation to SuperStream compliance and compliance during the implementation of the Superannuation Data and Payment Standards 2012. The ATO and APRA addressed issues including the commencement date, the three-day time period for processing of contributions, use of the fund validation service, use and integration of SuperTICK, and breach reporting.

  • On 28 May 2014, the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and a suite of 14 supporting Bills were passed by the House of Representatives without amendment and will move to the Senate. The Bills form the vehicle for the introduction of a three-year progressive budget repair levy.

  • On 29 May 2014, the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 was introduced into the House of Representatives. The Bill contains amendments in relation to a number of Acts. Despite the Bill's title, none of the measures appear to be directly in relation to superannuation, however Schedule 2 contains provisions so as to "introduce a one-off protection provision, which ensures in broad terms that outcomes are preserved in relation to income tax assessments [including for superannuation funds] where taxpayers have reasonably and in good faith anticipated the impact of identified announcements made by a previous government that the tax law would be amended with retrospective effect; and the current Government has now decided that the announced proposal to change the law will not proceed".

  • On 29 May 2014, the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 was introduced into the House of Representatives. The Bill amends Schedule 1 of the Taxation Administration Act 1953 to require Australian financial institutions to collect information about their customers that are likely to be taxpayers in the US and to provide information to the Commissioner of Taxation who will provide that information to the US Internal Revenue Service. The amendments will take effect from 1 July 2014. The Bill was introduced following Treasury's release of its Regulation Impact Statement regarding the implementation of the United States Foreign Account Tax Compliance Act.

  • On 29 May 2014, AUSTRAC released further draft amendments to Chapter 4 of the Anti-Money Laundering and Counter-Terrorism Financing Rules (AML/CTF Rules). The relevant amendments relate to electronic safe harbour procedures for customers. The period of consultation ends on 26 June 2014.

  • In McIntosh v McIntosh [2014] QSC 99 the Supreme Court of Queensland found that the Court appointed administrator of a deceased estate breached her fiduciary and statutory duties by applying to the deceased's superannuation funds for death benefits to be paid to her personally rather than to the estate. The Court found that the applicant had resolved a situation of conflict of duty and interest in her own interests. Accordingly, the Court made orders requiring the applicant to account to the estate of the deceased the superannuation benefits which she had received.

  • In Kristoffersen v Superannuation Complaints Tribunal [2014] FCAFC 63 the Full Court of the Federal Court dismissed all 15 grounds of appeal from the judgment at first instance ([2013] FCA 951). The primary judge had dismissed the appellant's appeal from a determination of the Superannuation Complaints Tribunal (SCT) which had affirmed the decisions of a superannuation fund trustee and its insurer to reject the appellant's claim for income protection and total and permanent disablement benefits. The Full Federal Court stated that the primary judge was "clearly correct" in finding that the SCT is not bound by the rules of evidence and, further, the SCT was not obliged to require a superannuation fund trustee and its insurer to produce original policy documents.

Further information

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