Superannuation Alert 04.05.17
Financial Services eBulletin - 4 May 2017
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
|Senate updates||Senate Economics Reference Committee: SG non-compliance report||Superbad – Wage theft and non-compliance of the Superannuation Guarantee
On 2 May 2017, the Senate Economics Reference Committee released a report in relation to its review of the economic impact and related enquiries into the non-payment of Superannuation Guarantee (SG) contributions.
The report provides 32 recommendations including that the $450 monthly income threshold for SG eligibility be removed.
The ATO issued a media release yesterday in response to the report, outlining its approach to dealing with SG non-compliance.
|ATO||Capped defined benefit income streams||Law Companion Guideline LCG 2017/1||
On 28 April 2017, the ATO released its final version of Law Companion Guideline LCG 2017/1 (Guideline) which "clarifies how the defined benefit income cap applies to superannuation income stream pensions, or annuities that are paid from life expectancy, or market linked products that are non-commutable".
From 1 July 2017, the value of an individual's capped defined benefit income stream will count towards that individual's transfer balance cap of $1.6m.
According to the Guideline, "capped defined benefit income streams cannot, of themselves, result in an excess transfer balance". Instead, modifications have been made to the general transfer balance cap rules which stipulate (amongst other things) that a credit will arise in the individual's transfer balance account for the "special value" of the defined benefit interest. The "special value" will be calculated according to a statutory formula.
|APRA||Survey of APRA-regulated institutions and other stakeholders||Letter from APRA dated 20 April 2017
On 20 April 2017, APRA released a letter to all APRA-regulated institutions and other relevant stakeholders advising that it will be conducting its fifth survey during April and May this year.
According to APRA, the purpose of the survey is to receive feedback from regulated institutions and stakeholders regarding APRA's performance and effectiveness. APRA noted in its letter that it has used the results from the past four surveys "as important input into its strategic planning and supervisory priorities".
The survey is voluntary and will be emailed to eligible institutions over the coming weeks.
|AASB||Guidance materials for AASB 1056||
The Australian Accounting Standards Board (AASB) has released guidance materials in relation to AASB 1056 - Superannuation Entities (AASB 1056).
According to the AASB, the guidance materials aim to "assist in understanding and implementing the requirements of AASB 1056, which applies to superannuation entities from the 2016/17 financial year".
AASB will also be hosting a webinar on AASB 1056 in June 2017.
|SCT||Death benefit complaints pilot||
The Superannuation Complaints Tribunal (SCT) has reintroduced the SCT Quarterly. SCT Quarterly Q1 2017 focuses on the distribution of death benefits, which, according to the SCT, is its largest single complaint category.
In order to improve its efforts in dealing with death benefit complaints, the SCT is piloting a new process where conciliation is completed earlier and "the only issue in dispute is the distribution of that benefit to the identified dependants". However, the SCT has noted that only 10.5% of all open death benefit distribution complaints qualify for the pilot as "questions of dependency sit alongside the question of distribution, necessitating a more extensive investigation".
The SCT highlights the importance of clear communication when notifying potential beneficiaries of a distribution decision, and provides several recommendations for clear communication for any complaints.
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.