Superannuation Alert 06.07.17

Financial Services eBulletin - 6 July 2017

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

Type Subject matter Source Description
Legislative updates Extension of relief for shorter PDS requirements ASIC Corporations (Amendment) Instrument 2017/386

On 26 June 2017, the ASIC Corporations (Amendment) Instrument 2017/386 was registered.

The Explanatory Statement provides that the Instrument "extends the relief given by Class Order [CO 12/749] until 30 June 2018, to enable ASIC to consult on permanent relief for the application of the shorter PDS regime to superannuation platforms, multi-funds and hedge funds".

Treasury update Terms of Reference released for Stage 3 of Productivity Commission's superannuation review Superannuation: Assessing Efficiency and Competitiveness Terms of Reference

On 30 June 2017, the Government released the Terms of Reference for Stage 3 of the Productivity Commission's review of Australia's superannuation system. The review will "assess the efficiency and competitiveness of Australia's superannuation system and make recommendations to improve outcomes for members and system stability".

In a joint media release by Kelly O’Dwyer and Scott Morrison, the MPs state that "the third and final stage of the review, a key recommendation of the 2014 Financial System Inquiry, is a critical step in ensuring Australians have a better standard of living in retirement".

The Productivity Commission expects to deliver a draft report by the end of January 2018 and a final report by the end of June 2018.

APRA New Cross-Agency Process for Innovative Retirement Income Streams Cross-Agency Process media release

On 3 July 2017, APRA outlined the new cross-agency process, to facilitate the implementation of the new annuity and pension standards in the Superannuation Industry (Supervision) Regulations 1994, which apply from 1 July 2017.

The new cross-agency process aims to streamline the administrative obligations of the ATO, APRA, ASIC, the Department of Social Services, and product providers by providing a "single entry point" for engagement.

 ASIC ASIC takes action to improve transparency of super websites ASIC media release

On 4 July 2017, ASIC announced that it had "intervened in relation to 21 superannuation trustees, representing 15 per cent of the trustee population, to improve 'Transparency Information' on their super fund websites".

ASIC explained that under section 29QB of the Superannuation Industry (Supervision) Act 1993, funds are required to disclose "remuneration, governance, and other information related to the fund; for example trustee directors’ remuneration for the last two financial years, fund trust deeds and product disclosure statements, a summary of significant event notices sent to fund members in the last two years, and a summary of how the trustee voted in the last financial year in relation to listed shares held by the fund".

As a result of ASIC's intervention, 15 trustees disclosed the required information or made it easier to locate, 2 sought relief from the requirements and 7 funds were wound up.

ASIC ASIC releases superannuation member experience report Report 529

On 30 June 2017, ASIC released its report on member experience of superannuation. The report explores the superannuation lifecycle from the customer's perspective and assesses the customer's vulnerability during the process of joining a superannuation fund, participation in a fund, and changing or leaving a fund.

The following issues were found to be of particular concern:

  • "disclosure about insurance cover in superannuation";
  • "industry practices around defaulting members into categories such as ‘smoker’ or ‘blue collar worker’ for the purposes of insurance cover"; 
  • "information about claims and the complaints handling process"; and
  • "trustees failing to provide adequate written reasons for a decision".
Case law update Supreme Court of Queensland decision on liability arising from prescribed offences Treasurer, Minister for Aboriginal and Torres Strait Islander Partnerships and Minister for Sport v Nuttall [2017] QSC 137

On 28 June 2017, the Supreme Court of Queensland handed down its decision in a case relating to the Court's ability to require a member of the Queenland State Government's common fund to repay a portion of their superannuation.

The Public Officers Superannuation Benefits Recovery Act 1988 (Cth) created a liability for members to repay any superannuation benefits where it is "just and equitable" because the member had engaged in prescribed misconduct. The court found it was appropriate to order the member to repay an amount equivalent to 25% of the member's superannuation benefit, having regard to the member's convictions for five offences of official corruption.

 

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.

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