Superannuation Alert - 5.12.12
Financial Services eBulletin - 5 December 2012
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.
- On 28 November 2012, the following Bills received Royal Assent:
- Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2012. This is the ‘first tranche’ of the Stronger Super legislation and which implements some of the key aspects of the Stronger Super reforms relating to MySuper, including defining a MySuper product, allowing registrable superannuation entity licensees to apply to the Australian Prudential Regulation Authority for authorisation to offer a MySuper product and setting out the fees that can be charged and the basis on which those fees can be charged to members of a MySuper product. It is now available as the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 (No. 162, 2012).
- Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012. According to the Explanatory Memorandum, the Bill amends the Income Tax Assessment Act 1997 and Tax Laws Amendment (2009 Measures No. 6) Act 2010 to reinstate the temporary loss relief for merging superannuation funds.
- On 29 November 2012, the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2012 was referred to the Parliamentary Joint Committee on Corporations and Financial Services. According to the Explanatory Memorandum, this Bill is the fourth tranche of legislation implementing the Government’s MySuper and governance reforms as part of Stronger Super. The Bill amends the SIS Act to over-ride any provisions in a fund’s governing rules that require the trustee to use a specified service provider, investment entity or financial product, to provide APRA with the power to issue infringement notices for certain breaches of the Act and to require superannuation trustees to provide reasons for decisions made in relation to a complaint. This Bill will also require persons who have suffered loss or damage due to a director’s contravention of duties under the SIS Act to seek leave from the court before bringing action against directors. The Bill also ensures that directors of corporate trustees (and individual trustees) are only prohibited from voting on any company business in limited circumstances, including where a conflict of interest arises.
- On 29 November 2012, the Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill 2012 and the Income Tax Rates Amendment (Unlawful Payments from Regulated Superannuation Funds) Bill 2012 were introduced into the House of Representatives. According to the Explanatory Memorandum for the Bills, they propose implementation of the following measures as part of the Government's Stronger Super reforms:
- Unlawful payments from regulated superannuation funds - provides for civil and criminal penalties for the promotion of illegal early release schemes under which a payment might be made from a regulated superannuation funds otherwise than in accordance with the SIS Act.
- Unlawful payments from regulated superannuation funds (income tax rates amendment) - provides that from the 2013-14 income year onwards, individuals who gain illegal early access to their superannuation benefits will be subject to the superannuation fund non-complying tax rate of 45% instead of the individual's marginal rate.
- Roll-overs to self-managed superannuation funds (SMSF) - provides that roll-overs from a non-SMSF to an SMSF will be included as a new designated service under the AML/CTF Act. The effect of the proposed change will be to require the transferring superannuation fund from 1 July 2013 to comply with a range of obligations under the AML/CTF Act, including customer identification and verification of identity, on-going customer due diligence, reporting, record-keeping, and establishing and maintaining an AML/CTF program.
- On 4 December 2012, the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 received Royal Assent, having been amended in the House of Representatives on 28 November 2012. The Bill is the ‘third tranche’ of the Stronger Super legislation and implements the Government's MySuper and governance reforms as part of Stronger Super. Among other things, the Government amendments deal with the definition of accrued default amounts, intra-fund advice on cash investments, opting-out of TPD/death insurance and publication of product dashboards. In addition, an amendment was made to exclude the provision of risk insurance from the general requirement that a MySuper product have the same ‘options, benefits and facilities’. The Act is now available as the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012 (No. 171, 2012).
- On 4 December 2012, the Fair Work Amendment Bill 2012 received Royal Assent. According to the Explanatory Memorandum, the Bill introduces new requirements in relation to modern award terms about default superannuation, and provide for the establishment of an Expert Panel to assess default superannuation funds.
- On 4 December 2012, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012 received Royal Assent. The Bill makes amendments to various Acts to bring forward the time at which money is recognised under the relevant law as lost or unclaimed. According to the Revised Explanatory Memorandum, the Bill was amended to provide transitional arrangements for superannuation funds, so that they will now have until 31 May 2013 to report on and transfer lost accounts and other lost moneys to ASIC or the ATO. According to a media release issued by the Parliamentary Secretary to the Treasurer on 26 November 2012, the Government will introduce regulations to avoid capturing accounts unintentionally.
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.