Superannuation Alert - 24.5.13
Financial Services eBulletin - 24 May 2013
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry and is in addition to our Superannuation Update, which analyses the main developments of interest in more detail.
- Superannuation Minister Bill Shorten released Discussion Paper - Charter of Superannuation Adequacy and Sustainability and Council of Superannuation Custodians, seeking feedback on the proposed Charter of Superannuation Adequacy and Sustainability.
- The paper discusses "core objectives, values and principles" which will be included in the Charter and which the Council would be required to consider when advising the federal government on superannuation policy settings.
- Further information on the Charter is available at the Minister's media release.
- On 13 May 2013 the Government released draft legislation to increase the Medicare levy by half a percentage point from 1 July 2014 and to direct all revenue raised from this increase to a new fund, the DisabilityCare Australia Fund.
- According to the Treasurer, Minister for Families, and Minister for Disability Reform's joint media release, the reform is the "most fundamental social policy reform since the introduction of Medicare"
On 15 May 2013 the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 was introduced into parliament. According to the explanatory material, the main proposals are as follows:
A higher concessional contributions cap
"Schedule 1 to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 amends the Income Tax Assessment Act 1997 and the Income Tax (Transitional Provisions) Act 1997 to increase the concessional contributions cap temporarily to $35,000 for the 2013-14 financial year for individuals aged 60 years and over, and to $35,000 for the 2014-15 financial year and later financial years for individuals aged 50 years and over. The temporary cap will cease when the general cap indexes to $35,000."
- Extra 15% contributions tax for incomes above $300,000
- "Schedule 3 to the Tax and Superannuation Laws Amendment - Superannuation (Sustaining the Contribution Concession) Imposition Bill 2013 (this Bill) amends the income tax and superannuation law and the Taxation Administration Act 1953 to reduce the tax concession for concessionally taxed superannuation contributions of very high income earners by 15 per cent. The Superannuation (Sustaining the Contribution Concession) Imposition Bill 2013 contains the mechanism by which the tax concession is reduced".
- "Schedule 4 to this Bill also makes consequential amendments to legislation concerning some of the Commonwealth defined benefit superannuation plans where members of those plans are affected by the reduction in the tax concession for concessionally taxed superannuation contributions."
- Low income superannuation contribution
- "Schedule 2 to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 amends the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Co-contribution Act) in order to make a number of technical changes to ensure the low income superannuation contribution (LISC) operates effectively."
- On 15 May 2013 the Government released a draft regulation to implement a trans-Tasman retirement savings portability scheme.
- The Australian and New Zealand Governments have signed an arrangement which will allow Australians and New Zealanders to transfer their retirement savings if they relocate between the countries.
- Retirement savings will generally be governed by the rules of the host country.
- It will not be possible to transfer New Zealand-sourced retirement savings to an Australian self-managed superannuation fund, and an APRA-regulated fund will not be able to roll over New Zealand sourced amounts to an SMSF. Trustees will therefore be required to separately identify New Zealand sourced amounts.
- The draft regulations will take effect on the day on which the agreement between the countries comes into force.
- Submissions closed 21 May 2013.
- On 16 May 2013 the Superannuation Legislation Amendment (Reform of Self-Managed Superannuation Funds Supervisory Levy Arrangements) Bill 2013 was passed and now awaits Royal Assent. The Bill will increase the maximum amount of SMSF supervisory levy that a trustee of an SMSF may be charged from $200 to $300.
- APRA has released the following consultative documents for public comment:
- The draft standards are proposed to apply to "Level 3" conglomerate groups, specifically "groups comprising APRA-regulated institutions that perform material activities across more than one APRA-regulated industry and/or in one or more non-APRA-regulated industry".
- The standards aim to set down some basic prudential guidelines, to ensure that the prudential framework "adequately captures the risks to which APRA-regulated institutions within Level 3 groups are exposed and which are not adequately covered by existing prudential arrangements".
- APRA also released a copy of its Letter to all Chief Executive Officers of potential Level 3 groups to accompany the draft standards.
- Comments on the discussion paper and draft standards should be sent to by 5 July 2013.
- More information can be found at APRA's media release.
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.