Superannuation alert 26.11.14
Financial Services eBulletin - 26 November 2014
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 14 November 2014, ASIC released Consultation Paper 224 - Facilitating electronic financial services disclosures (CP 224) together with Draft Regulatory Guide 221 - Facilitating electronic financial services disclosures (the Draft RG 221) for public comment. In CP 224, ASIC states that it proposes to "[provide] class order relief to facilitate default electronic delivery of financial services disclosures and to facilitate the use of more innovative Product Disclosure Statements [PDSs]". Specifically, ASIC proposes to:
- update Regulatory Guide 221 - Facilitating online financial services disclosures "to make it clear that, if a financial services provider has an email address for a client, they do not need consent to use that address to deliver disclosures electronically";
- "provide class order relief to give providers an additional method for delivery of disclosures, which would enable them to publish disclosures electronically and then notify the client that the disclosure is available"; and
- "give relief to facilitate the use of more innovative PDSs, such as interactive PDSs", and to update its regulatory guidance accordingly.
Feedback on CP 224 and the Draft RG 221 should be sent to ASIC by 16 January 2015.
- On 17 November 2014, the Social Services and Other Legislation Amendment (2014 Budget Measures No 6) Bill 2014 was passed by the Senate and now awaits Royal Assent. The Bill reintroduces various previously announced Budget measures. Among these is the measure to include untaxed superannuation income in the assessment for the Commonwealth Seniors Health Card (with any products purchased before 1 January 2015 by existing cardholders being exempt from the new arrangements). The Explanatory Memorandum to the Bill can be accessed here.
- On 19 November 2014, the Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014 No. 102 (Cth), which amended the Corporations Regulations 2001, was disallowed by the Senate. The amendments included in the Regulation are summarised in the Explanatory Statement. The Australian Securities and Investments Commission (ASIC) has issued a media release in response to the disallowance, advising that it will take a "practical and measured approach to administering the law" and that it will take into account that "many Australian financial services (AFS) licensees will now need to make systems changes", including in relation to fee disclosure statements and remuneration arrangements.
- On 20 November 2014, the Australian Prudential Regulation Authority (APRA) released its latest Quarterly Superannuation Performance Statistics (interim edition) - September 2014. The publication "provides industry aggregate summaries of financial performance, financial position and key ratios", and "has been expanded to include 167 additional statistics" including "asset allocation, selected data on MySuper and further detail on contributions that have been determined to be non-confidential". According to the publication, superannuation assets totalled $1.87 trillion at the end of the September 2014 quarter. Further information from APRA may be accessed here.
- On 31 October 2014, the Federal Court of Australia handed down its decision in Hannover Life Re of Australasia Ltd v Wright  FCA 1163. The Court upheld an appeal brought by a reinsurer, ruling that in the circumstances of the case, the Superannuation Complaints Tribunal did not have the power under s 37(5) of the Superannuation (Resolution of Complaints) Act 1993 to redraft an exclusion clause imposed by a superannuation fund trustee upon its member as a term and condition of additional optional death and disablement cover. The Court said that the SCT's redrafting of the exclusion clause was contrary to the policy between the trustee and the reinsurer to which the relevant insurance arrangements were subject, and the governing rules of the fund.
- On 19 November 2014, the ATO released SMSF Determination SMSFD 2014/1, which considers whether a payment made as a result of a commutation of an account based pension that is a transition to retirement income stream counts towards the minimum and maximum annual payment amounts set out in the SIS Regulations for such a pension.
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.