Superannuation Alert 8.8.18
Financial Services - 8 August 2018
APRA - APRA releases further short topic papers for its post-implementation review of superannuation prudential framework
- Short topic paper five: Insurance in Superannuation
- Short topic paper six: Member flows and products
On 31 July 2018, APRA released the following topic papers in relation to its post-implementation review of the superannuation prudential framework:
- Short topic paper five: Insurance in Superannuation; and
- Short topic paper six: Member flows and products.
According to APRA, consultation on these "short topic papers will form part of APRA's industry engagement over the course of the review process". Submissions to APRA's review close on 26 September 2018.
APRA - APRA's submission to the Productivity Commission draft report
- Letter: APRA submission to the Productivity Commission draft report - Superannuation: assessing efficiency and competitiveness
- Submission: Productivity Commission draft report - Superannuation: assessing efficiency and competitiveness
On 3 August 2018, APRA released its submission made to the Productivity Commission (PC) in relation to the PC's draft report about the superannuation system.
According to APRA's letter which accompanies the submission:
- "APRA’s superannuation prudential framework is less mature, compared to the other industries that APRA regulates [given that] it was only in 2012 that the Government's Stronger Super reforms gave APRA power to make prudential standards";
- despite recent reforms "the continued absence of critical powers in superannuation for APRA inhibits its ability to take timely and proactive action";
- "APRA does not agree with the [PC's] observation that APRA’s powers to set prudential standards, and its role in MySuper authorisation, have resulted in regulatory arrangements that are confusing and opaque"; and
- "APRA agrees with the [PC] that there is room for improvement in both the range of data that APRA collects and the quality of data that RSE licensees submit to APRA".
Superannuation Complaints Tribunal - Latest Superannuation Complaints Tribunal newsletter now available
Source: SCT Quarterly - Q2 2018
The Superannuation Complaints Tribunal (SCT) has issued its second SCT Quarterly newsletter for 2018.
The latest edition gives an overview of the transition of the SCT's functions to the new Australian Financial Complaints Authority, as well as providing a summary of the latest complaint statistics and two new case studies.
Case update - NSW Supreme Court TPD decision
On 4 August 2018, the Supreme Court of New South Wales made available its decision in MX v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme & Anor  NSWSC 923. The decision was handed down on 24 July 2018 but kept confidential in order to give the parties time to ensure that the plaintiff's identity could not be discovered in the Court's reasons (as the plaintiff was a former undercover police officer).
The facts of the case are that the plaintiff was medically discharged in 2011 due to suffering from post-traumatic stress disorder, and accordingly made a claim for a total and permanent disablement (TPD) benefit from his superannuation fund. The fund provided cover to members pursuant to a policy held with MetLife Insurance Limited (MetLife) which was reinsured with another insurer (and much of the decision considers whether MetLife complied with the relevant reinsurance treaty).
TPD benefits were subject to a standard requirement of incapacity which rendered a member unable to engage in any occupation for which they are qualified by reason of "education, training or experience".
Although the claim was rejected by MetLife, the Court ultimately found that the plaintiff was TPD within the meaning of the group life insurance policy as MetLife had not given adequate weight to the various medical opinions. The Court was also critical of MetLife's rejection letter, determining that it "really just recite[d] material" and did not demonstrate "how the material has been evaluated, accepted, rejected, reconciled or otherwise dealt with".
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