Superannuation Alert - 27.6.13
Financial Services eBulletin - 27 June 2013
- On 24 June 2013, the Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013 was passed by both Houses of Parliament and is awaiting Royal Assent.
According to the Explanatory Statement, the amendments insert a new Sch 3, which will amend the Fair Work Amendment Act 2012 to (amongst other things):
- "introduce new requirements in relation to terms in modern awards that nominate default superannuation funds for employees who have not chosen a fund (‘default fund terms’)"; and
- establish "a process under which the Fair Work Commission (FWC) will review such terms every four years."
The key changes made by this legislation include:
- The category of MySuper products previously referred to as "generic MySuper products" will be renamed as "standard MySuper products";
- A new concept of "employer MySuper product" will be introduced. This will include 'tailored MySuper products' and 'corporate MySuper products'.
- There will be new processes to allow employer MySuper products to be included in a "Schedule of Approved Employer MySuper Products" - the process will have two stages and if the product passes both stages and is included in this Schedule, then the employer can contribute to this product (instead of having to contribute to one of the "standard" MySuper products named in the modern award).
- The new modern award clauses will not apply to existing awards before 1 January 2015. For modern awards made between 1 January 2014 and 31 December 2017 (for example a modern enterprise award), the new provisions will not apply until the second four yearly review of default fund terms.
- Whereas previously, as a general rule, there was a maximum of 10 funds that could be named in a modern award, this has been expanded to 15 (but in special circumstances the FWC could include a greater number).
- On 12 June 2013 SuperRatings released its Report - An Overview of Standard Risk Measures in Practice, which sets out survey responses from super funds in relation to the Standard Risk Measures (SRM) tool. In the associated media release, SuperRatings concluded "that whilst the introduction of the controversial SRMs into the superannuation industry has not provided a complete answer, it has at least got the ball rolling in terms of ultimately creating a satisfactory risk measure for consumers, something the industry has been unable to achieve despite over a decade of debate." ASFA and FSC have issued a joint media statement in response to the Report, stating that the analysis by SuperRatings will be "incorporated into the review process."
- On 14 June 2013 ASIC published a media release to assist those intending to apply for a limited Australian financial services (AFS) licence. The release relates to Information Sheet 17 - applying for a limited AFS licence (INFO 179), which "gives practical guidance to help applicants work through the licensing process." In summary, INFO 179:
- "provides guidance about ASIC's licensing application process, and how it will apply to those seeking a limited AFS licence;
- outlines what information needs to be submitted in support of a limited AFS licence application; [and]
- gives information about which ASIC guidance will be most relevant for those seeking a limited AFS licence."
- On 18 June 2013 the ATO released the following updates:
- Rollover transition-in induction guide – a guide which sets out the arrangements for APRA-regulated super funds to complete the induction process in the rollover transition-in period; and
- Rollover transition-in timetable – version 2.0 – a timetable including updates to rollover transition-in bands for APRA-regulated super funds, and an initial allocation of funds to induction groups.
- On 20 June 2013 the Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 and the Superannuation (Excess Concessional Contributions Charge) Bill 2013 were passed by the House of Representatives. According to the Explanatory Memorandum (which is the same for both Bills):
- the Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 "amends the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 to establish a fairer system for the taxation of individuals with concessional contributions in excess of their annual cap. The Bill also allows "individuals to elect to release an amount of excess concessional contributions from their superannuation interests"; and
- the Superannuation (Excess Concessional Contributions Charge) Bill 2013 imposes "a charge on taxpayers who have concessional contributions in excess of their annual cap to ensure that they do not receive an advantage over those taxpayers who do not exceed their annual cap."
- On 20 June 2013 the Tax Laws Amendment (2013 Measures No. 3) Bill 2013 was introduced and passed by the House of Representatives without amendment.According to the Explanatory Statement, the Bill "amends the Tax Agent Services Act 2009 to bring entities that give tax advice in the course of giving advice that is usually provided by financial services licensees within the regulatory regime administered by the Tax Practitioners Board…[to ensure] the consistent regulation of all forms of tax advice, irrespective of whether it is provided by a tax agent, a BAS agent or an entity in the financial services industry." The Bill also "makes a number of other amendments to the Tax Agent Services Act 2009 to correct a range of technical issues."
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