Superannuation Alert 17.8.18
Financial Services - 17 August 2018
Federal Parliament - Senate Committee report - Protecting Your Super Bill
On 13 August 2018, the Senate Economics Legislation Committee (Committee) released its report into the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 (Bill), recommending that the Bill be passed.
The Committee observed that "[s]ubmitters and witnesses were broadly supportive of the policy objective of the [Bill]; that is, to improve Australians' retirement savings by protecting low-balance accounts from undue erosion due to excessive fees and inappropriate insurance arrangements". However, views did differ as to the necessity of certain measures, and some concerns were raised in relation to (among other things) the proposed mechanism for the transfer of inactive account funds via the ATO and the potential that the proposed fee cap and ban on early exit fees could be "gamed".
Notwithstanding these concerns, the Committee expressed favourable views in respect of the Bill, commenting that "the measures in this [Bill] are an important first step" to address the "extensive proliferation of accounts and serious erosion of members' balances through excessive fees and inappropriate insurance arrangements".
ASIC - ASIC funding to combat financial services misconduct
On 7 August 2018, the Hon Kelly O'Dwyer, Minister for Revenue and Financial Services, issued a media release announcing that the Government would inject "a further $70.1 million into [ASIC] to ensure the corporate regulator has the resources and powers it needs to combat misconduct in the financial services industry".
According to Ms O'Dwyer, the package of measures includes:
- "$26.2 million to accelerate and increase the intensity of ASIC's enforcement activities and enhance its capacity to pursue actions for serious misconduct against well-funded litigants, through the Enforcement Special Account;
- $9.4 million to boost supervision of the superannuation sector by strengthening audit and enforcement action to improve transparency and outcomes for superannuation members;
- $8 million to implement a new supervisory approach in respect of Australia's five largest financial institutions (the big four banks and AMP) by, for the first time, embedding dedicated staff within these institutions to monitor governance and compliance actions;
- $6.8 million to establish a dedicated taskforce which will conduct a proactive, targeted and thematic review into corporate governance to identify and pursue failings in large listed companies, including deploying staff to conduct new on-site surveillance and investigations;
- $6.6 million to implement the Government's reforms to whistleblower protection laws, so that ASIC can better receive, assess, triage and address whistleblower disclosures about misconduct; and
- $6 million to promote Australia as a world leader in the development and adoption of regulatory technology solutions for the financial services industry".
ATO - ATO Update: Successor Fund Transfer Reporting
On 8 August 2018, the ATO released further guidance in relation to successor fund transfers (SFTs). The guidance updates the ATO's SFT chapter in its "Protocols" materials and provides various data transfer, notices and reporting checklists for trustees undertaking an SFT.
ATO - First Home Super Saver guidance
On 15 August 2018, the ATO issued a new Law Companion Ruling in relation to "operation of the First home super saver (FHSS) scheme" (LCG) and describes how the ATO will apply the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017. The LCG sets outs the eligibility criteria for the FHSS scheme, which contributions are counted towards the FHSS scheme and how withdrawals will be processed by the ATO.
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