Superannuation Alert - 9 April 2014
Financial Services eBulletin - 9 April 2014
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 26 March 2014, the Australian Accounting Standards Board (AASB) released its Board Papers ahead of the AASB meeting on 8 and 9 April 2014. Included within the papers are submissions received on Draft Standard AASB 105X (Superannuation Entities) which, when issued, will replace AAS 25 Financial Reporting by Superannuation Plans. The AASB memorandum dated 24 March 2014 stated that no “fatal flaws” had been identified in the draft though suggestions for its improvement were made. A marked-up version of Draft Standard AASB 105X setting out the proposed changes is included within the Board Papers.
- On 27 March 2014, the ATO updated its website notes advising self-managed super fund (SMSF) trustees that they must act according to their fund’s trust deed and superannuation and taxation laws. A failure to perform the duties lawfully may affect tax concessions which normally apply and may result in penalties.
- On 28 March 2014, the Treasurer issued a media release announcing a proposed asset recycling initiative which, he asserted, "could see the Commonwealth offer substantial financial incentives to States and Territories that sell assets and recycle the proceeds of these sales into new productive infrastructure". The Treasurer stated that the Commonwealth, State and Territory governments had met to progress the plan to boost the stock of productive infrastructure in Australia and had issued a Statement of Shared Intent regarding this.
- On 28 March 2014, ASFA released its submission to the Attorney-General's Department Review of the Anti-Money Laundering and Counter-Terrorism Financing Regime – Issues Paper. ASFA has provided responses on a range of topics which impact the superannuation sector including the objects of the AML/CTF Act, the risk-based approach and better regulation and harnessing technology to improve regulatory effectiveness.
- On 31 March 2014, the ATO released a Decision Impact Statement regarding the Federal Court's decision in FCT v Barossa Vines  FCA 20. The ATO stated that it agreed with the court's decision to impose civil penalties in relation to a number of managed investment schemes that were implemented in a way that was "materially different" from the ATO Product Rulings used to promote them (in contravention of s 290-50(2), Sch 1 of the Taxation Administration Act 1953).
- On 2 April 2014, APRA released a final Modification Declaration to regulation 4.07E of the Superannuation Industry (Supervision) Regulations 1994. The final Modification Declaration permits self-insuring defined benefit funds and sub-funds to continue their self-insurance arrangements beyond 1 July 2016 when the transition period ends. Regulated superannuation funds have generally been prohibited from self-insuring since 1 July 2013. In a letter to all RSE licensees dated 31 March 2014, APRA said the proposed Modification Declaration had been revised following consultation with the industry. The Modification Declaration will become effective on its date of registration, likely to be in early April.
- On 3 April 2014, the ATO updated its website notes regarding SMSFs and the timing of pension payments. To ensure that pension standards for SMSFs are met, it is important that fund trustees consider the time that a member’s benefit is cashed (that is, ‘paid’). As a general rule, a benefit is cashed when the member receives an amount and the member’s benefits in the SMSF are reduced.
- On 4 April 2014, the ATO updated its website frequently asked questions regarding SMSFs and minimum pension payment requirements.
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.