Superannuation Alert - 13.5.15

Financial Services eBulletin - 13 May 2015

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

  • On 5 May 2015, ASIC reported that it has cancelled the Australian Financial Services (AFS) licences of four licensees following their failure to lodge audited annual statements. ASIC had conducted a review into the conduct of 14 AFS licensees that had failed to lodge audited annual statements. In addition to the cancellations, ASIC also suspended one licensee until documents were lodged, achieved voluntary compliance by seven licensees and prompted two licensees to cancel their licences because they were no longer required.

  • On 6 May 2015, ASIC announced that it would be developing a regulatory guide on review and remediation programs that are conducted by AFS licensees that provide financial advice. ASIC's Deputy Chair, Peter Kell stated that "licensees that provide personal advice to retail clients should have robust review and remediation programs in place to protect their clients". The guide will build on existing ASIC guidance on dispute resolution in Regulatory Guide 165 Licensing: Internal and external dispute resolution (see also Regulatory Guide 139 Approval and oversight of external dispute resolution schemes) and ASIC's experience in overseeing review and remediation programs.

  • The following Bills relating to superannuation have been proposed for introduction and passage in the 2015 Winter Sittings of Parliament which began on 12 May 2015:
    • Tax and Superannuation Laws Amendment (2015 Winter No 1) Bill 2015 which is intended to, amongst other things, "simplify the choice of superannuation obligations for employers". This Bill is part of the Government's measures to reduce the compliance burden faced by employers when making superannuation contributions for their workers.
    • Tax and Superannuation Laws Amendment (2015) Winter No 2) Bill 2015 which would "treat an investor in an instalment warrant as the owner of the underlying asset for tax purposes".

  

2015-16 Federal Budget

Last night, the Treasurer announced the 2015-16 Federal Budget. The Treasurer confirmed that "there will be no new taxes on superannuation under this Government". Accordingly, there were no changes announced to taxation of superannuation benefits or contributions, or to the preservation age. However, some of the measures which will affect the superannuation industry include:

  • Full cost recovery of superannuation activities - The Government will increase the supervisory levies paid by financial institutions to APRA to fully recover the cost of superannuation activities undertaken by the ATO and the Department of Human Services.

  • Release of superannuation for terminal medical condition - From 1 July 2015, the Government will extend the life expectancy period in relation to early release of superannuation for terminally ill persons from 12 months to 24 months.

  • Serious Financial Crime taskforce - The Government will establish the Serious Financial Crime taskforce to investigate and prosecute serious financial crimes including superannuation and tax fraud.

  • Lost and unclaimed superannuation - The Government will implement measures to make the rules about lost and unclaimed superannuation more efficient, including removing some redundant reporting obligations and streamlining administrative arrangements. It is proposed that these measures will take effect from 1 July 2016.

Other general measures of interest include:

  • Social security income test - The rules for relevant social security income tests have been refined to include a larger proportion of a superannuant's actual defined benefit income stream.

  • Social security assets test - The Government will increase the asset test thresholds and the withdrawal rate at which pensions are reduced once the threshold is exceeded.

  • New tax system for managed investment trusts - It has been confirmed that the Government will implement a new tax system for managed investment trusts with a transition period of 12 months. The new rules will apply from 1 July 2016; however, managed investment trusts can choose to apply them from the earlier start date of 1 July 2015.

  • Value of Commonwealth penalty units - The Government will increase the value of all Commonwealth penalty units from $170 to $180, with effect from 31 July 2015.

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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