Superannuation Alert 08.12.16
Financial Services eBulletin - 8 December 2016
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 25 November 2016, the Productivity Commission published its report entitled How to Assess the Competitiveness and Efficiency of the Superannuation System which is the result of the first stage of its study into the efficiency and competitiveness of Australia's superannuation system.
As part of its report, the Commission has developed criteria to assess whether, and the extent to which, the superannuation system is efficient and competitive in delivering the best outcomes for members. The criteria will be used to assist the Commission in reviewing the superannuation system as part of its system-wide review, following full implementation of the MySuper reforms (after 1 July 2017).
- On 1 December 2016, the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill (No. 2) 2016 was introduced and passed both Houses of Parliament without amendment. According to the Explanatory Memorandum, the effect of the Bill is to reduce "the rate from 95 per cent to 65 per cent for the departing Australia superannuation payments tax that applies to amounts attributable to superannuation contributions made while a person was a working holiday maker." The Bill was introduced as part of the Government's current negotiations to pass the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (No. 2).
- On 6 December 2016, Assistant Treasurer Kelly O'Dwyer announced that the panel reviewing the financial system’s external dispute resolution and complaints framework on behalf of Treasury has released an interim report titled Review of the financial system external dispute resolution and complaints framework. The report recommends that the financial system should be overseen by a strong and effective regulatory framework as consumers are generally "disengaged, have low financial literacy and find it difficult to understand complex financial products". The panel has found that the current framework which consists of ASIC, the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO), Superannuation Complaints Tribunal (SCT) and court system "is the product of history rather than design". Their main recommendations include:
- "a single industry ombudsman scheme to deal with all financial, credit and investment disputes" to replace FOS and CIO;
- transitioning the SCT "to a new industry ombudsman scheme for superannuation disputes"; and
- that "an additional statutory dispute resolution body is not required".
The panel is taking submissions until 27 January 2017.
- On 7 December 2016, the ATO published LCG 2016/D10: Defined Benefit income streams - non commutable, lifetime pensions and lifetime annuities a further draft Law Companion Guideline in its series of guidance in relation to aspects of the superannuation reforms. The Companion covers two "capped defined benefit income streams that cannot be commuted in full or in part", being lifetime pension and lifetime annuity products. The guideline provides clarification as to how the defined benefit income cap will apply to these products. Comments on this draft Law Companion Guideline are due by 23 January 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.