Superannuation Alert 29.10.14
Financial Services eBulletin - 29 October 2014
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 20 October 2014, ASIC announced the release of its Strategic Outlook for 2014-15 which sets out, among other things, ASIC's key challenges for 2014-2015 and its strategic priorities to respond to these challenges.
- On 22 October 2014, the Treasury Legislation Amendment (Repeal Day) Bill 2014 (Cth) was introduced in the House of Representatives and received its second reading speech. According to the Explanatory Memorandum:
- Schedule 1 to the Bill would amend the Superannuation Industry (Supervision) Act 1993 No. 78 (Cth) to repeal the payslip reporting provisions, which require employers to include in employee payslips information prescribed by the regulations;
- it was intended that regulations be made so that employers had to report on payslips the amount of superannuation contributions and the date on which the employer expects to pay them, however this has not occurred; and
- there are existing requirements in the Fair Work Act 2009 No. 28 (Cth) and the Fair Work Regulations 2009 No. 112 (Cth) for employers to include in payslips the amount of superannuation contributions they are liable to make.
- On 22 October 2014, the following Acts were introduced in the House of Representatives:
- Omnibus Repeal Day (Spring 2014) Bill 2014 which, according to the Explanatory Memorandum, "includes measures that repeal redundant and spent Acts and provisions in Commonwealth Acts." These include various superannuation-related Acts and provisions, as referred to in the Bill.
- Statute Law Revision Bill (No 2) 2014 which, according to the Explanatory Memorandum, corrects technical errors in Acts and amending Acts, modernises language, and repeals approximately 30 pages of spent and obsolete provisions. This includes various superannuation-related provisions, as referred to in the Bill.
- On 22 October 2014, the Superannuation Complaints Tribunal Annual Report 2013-14 was tabled in the House of Representatives. According to the Report, in 2013-14, the Tribunal received 2,493 written complaints (an increase of 2%) and 12,249 telephone inquiries (an increase of 7%). There were three main categories of complaints: administration (46.4%), death (32.5%) and disability (21.1%). The largest categories of administration complaints were in relation to insurance premiums (17.7%), delay (12%) and account balances (11.1%). The Tribunal also reported an 11.5% increase in complaints for industry funds, while complaints decreased by 13.2% for retail funds and 12.1% for public sector funds.
- On 23 October 2014, the Australian Prudential Regulation Authority (APRA) updated its Frequently Asked Questions (the FAQs) on the reporting framework for registrable superannuation entity (RSE) licensees to:
- add a new FAQ 123: How should RSE licensees determine which investments to report to APRA on Reporting Form SRF 532.0 Investment Exposure Concentrations (SRF 532.0)?; and
- amend FAQ 122: What is the difference between fees, costs and expenses within the APRA reporting forms?
- On 23 October 2014, the Australian Taxation Office (ATO) issued a media release reminding employers that the Superannuation Guarantee rate increased from 9.25% to 9.5% as of 1 July 2014. The ATO advised that employers must pay super guarantee contributions for each eligible employee at least four times a year, and the first quarterly contributions must be paid by 28 October 2014. Businesses with 19 employees or fewer were also urged to use the free Small Business Superannuation Clearing House service to meet their SG obligations.
- On 24 October 2014, Finance Minister and Acting Assistant Treasurer Mathias Cormann announced that the Federal Government is to establish "an enhanced, industry-wide public register of financial advisers" by March 2015. The register will include information on an adviser's registration, qualifications, licensee and areas of advice, as well as "any bans, disqualifications or enforceable undertakings", and will "enable investors, employers and ASIC to verify the credentials of financial advisers and be confident that they are appropriately qualified and experienced".
- On 24 October 2014, Finance Minister and Acting Assistant Treasurer Mathias Cormann released the Federal Government's response to the Senate Economics References Committee's report of its inquiry into ASIC's performance. It was noted that a large number of the Committee's recommendations were addressed to ASIC, which has "already implemented or is working to implement many of the recommendations", including the following:
- establish an Office of the Whistleblower within ASIC;
- "improve its communications and enhanced transparency by revamping its website to make it more accessible";
- increase its monitoring of enforceable undertakings; and
- work with the federal government on establishing an enhanced public register of financial advisers.
ASIC's media release in relation to the government's response to the Committee's report may be accessed here.
- On 24 October 2014, the ATO published ATO ID 2014/31 in relation to an employer's superannuation guarantee obligations following the death of an employee. The ATO states that where an employer pays an amount of salary and wages owing to an employee at the time of their death to the deceased estate of the employee, the employer will have an individual superannuation guarantee shortfall under s 19(1) of the SGAA if it does not make sufficient superannuation contributions in respect of the payment by the relevant quarterly cut-off date.
- On 27 October 2014, APRA announced the release of Draft Prudential Practice Guide SPG 223 (Fraud Risk Management), which outlines good practices for registrable superannuation entity (RSE) licensees in relation to fraud risk management. Prudential Standard SPS 220 (Risk Management) requires RSE licensees to ensure that their risk management framework covers all material risks to their business operations, including fraud risk. The Draft Prudential Practice Guide SPG 223 examines current and emerging superannuation fraud risk factors from both an internal and external perspective and gives examples of potential fraud risks and the characteristics of an investment that may create the potential for fraud. These fraud risks are matched with examples of fraud detection and prevention controls. APRA has invited submissions on draft SPG 223 by 19 January 2015.
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.