Superannuation « Australian Regulatory Compliance Review from Langes+ Lawyers

October 5, 2012

APRA releases MySuper requirements

The Australian Prudential Regulation Authority (APRA) has released its proposed final application form and instructions for the authorisation of MySuper products and proposed final Prudential Standard SPS 410 MySuper Transition.

The proposed final Prudential Standard sets out requirements for the movement of accrued default amounts into a suitable MySuper product before 1 July 2017.

The authorisation process for registerable superannuation entities (RSE) licensees wishing to offer MySuper products is expected to commence from 1 January 2013. Once authorised, RSE licensees can offer these products from 1 July 2013 onwards.

APRA has also released the proposed final application form and instructions for authorisation to offer an eligible rollover fund (ERF). The authorisation process for RSE licensees to offer an eligible rollover fund is expected to commence from 1 January 2013.

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Posted 5th October 2012 by David Jacobson in Superannuation

September 28, 2012

Austrac and Departing Australia Superannuation Payment

Austrac has published draft amendments to Chapter 41 of the AML/CTF Rules relating to the cashing out of low balance superannuation accounts for consultation.

The draft amendments extend the relief in the chapter to include the Departing Australia Superannuation Payment (DASP). Under DASP, temporary residents who leave Australia are entitled to cash out their superannuation benefits once they leave Australia. The draft amendments exempt reporting entities from undertaking customer identification on such persons, subject to certain conditions including:

the value of the interest is not greater than $5,000; and
no additional contributions are accepted from the member in relation to the member’s interest in the superannuation fund, ADF or RSA; and
the whole of the interest of the member in the superannuation fund, ADF or RSA is cashed out; and
the account in which the interest of the member was held, is closed as soon as practicable after the cashing out of that interest.

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Posted 28th September 2012 by David Jacobson in Anti-money laundering, Superannuation

September 24, 2012

Further MySuper Bill: tranche 3

The Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 has been introduced into Parliament.

This Bill is the third tranche of legislation implementing the Government’s MySuper and governance reforms as part of Stronger Super.

The first tranche of legislation was introduced to the Parliament on 3 November 2011 as the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 (the MySuper Core Provisions Bill).

The second tranche of legislation, the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012 (the Trustee Obligations and Prudential Standards Act) received Royal Assent on 8 September 2012.

This Bill introduces the next stage of the reforms.

The Bill:
• bans entry fees and sets criteria for the charging of other fees in superannuation, including rules for the charging of financial advice;
• requires all superannuation funds to provide life and TPD insurance to members (excluding defined benefit members) on an opt-out basis;
• enables APRA to collect information;
• requires the disclosure and publication of key information in relation to superannuation funds;
• allows only funds that offer a MySuper product and exempt public sector superannuation schemes to be eligible as default funds in modern awards and enterprise agreements;
• allows exceptions from MySuper for members of defined benefit funds;
• requires trustees to transfer certain existing balances of members to MySuper; and
• provides rules in relation to eligible rollover funds.

The majority of these provisions will apply from no earlier than the commencement of the MySuper Core Provisions Bill or the Trustee Obligations and Prudential Standards Act, expected to be 1 July 2013.

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Posted 24th September 2012 by David Jacobson in Superannuation

September 18, 2012

Australia-New Zealand retirement savings portability scheme

Treasury has released draft legislation to establish a trans-Tasman retirement savings portability scheme.

The Governments of Australia and New Zealand have signed an Arrangement to permit Australians and New Zealanders to transfer their retirement savings when they move between Australia and New Zealand, while preserving the integrity of the retirement savings systems of both countries.

Key features of the portability scheme include:
•individuals may transfer their retirement savings between an Australian complying superannuation fund regulated by the Australian Prudential Regulation Authority and a New Zealand KiwiSaver scheme;
•participation is voluntary for members and for superannuation funds and schemes;
•retirement savings will be transferred with minimal costs;
•retirement savings will generally be subject to the rules in the host country; and
• New Zealand retirement savings transferred to Australia will be treated as non‑concessional contributions and subject to the Australian non-concessional cap arrangements at the initial point of entry.

The legislation is expected to be introduced into Parliament later this year, and is likely to take effect from 1 July 2013.

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Posted 18th September 2012 by admin in Superannuation, Tax

September 12, 2012

Review of APRA’s crisis management powers

Treasury has released a Consultation Paper Strengthening APRA’s Crisis Management Powers seeking stakeholder views on:

strengthening APRA’s crisis management powers in relation to authorised deposit-taking institutions (ADIs), superannuation entities and general and life insurers;
proposed enhancements to the Financial Claims Scheme framework for both ADIs and general insurers;
simplifying APRA’s regulatory powers across the various Acts it administers in the banking, insurance, and superannuation sectors, given that many firms operate across sectors;
making a series of minor and technical amendments to enhance the effectiveness of legislation administered by APRA; and
aligning Australia’s regulatory regime with international best practice following the GFC.

In relation to crisis management the paper reviews APRA’s existing powers in relation to groups, including control over non‐regulated entities in a group, clarifying APRA’s directions powers, suspending continuous disclosure requirements, widening the scope of application of the Business Transfer Act to related entities of general insurers and life companies, new direction powers for superannuation and providing APRA with more powers in relation to Australian branches of foreign banks.

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Posted 12th September 2012 by David Jacobson in Financial Services, Insurance, Superannuation

August 24, 2012

Penalties for trustees of self managed superannuation funds

Treasury has released for public consultation an exposure draft of Tax Laws Amendment (Stronger Super Self Managed Superannuation Funds) Bill 2012: Administrative Penalties introducing administrative consequences and penalties for trustees of self managed superannuation funds (SMSFs).

This measure will provide the Australian Tax Office (ATO) with additional tools to deal will non-compliance with the law in addition to its existing power to make the SMSF non-complying.

Administrative directions (rectification orders or trustee education) and impose penalties for contraventions by SMSF trustees will be more appropriate than disqualifying a trustee for a minor breach.

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Posted 24th August 2012 by David Jacobson in Superannuation, Tax

MySuper update

The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 has been passed by the House of Representatives.

It establishes the core framework for MySuper products, which will replace existing default investment options in superannuation funds from 1 July 2013.

The Government has deferred the date from which it will become mandatory for employers to make employee contributions to a fund offering a MySuper product, from 1 October 2013 to 1 January 2014.

A recent speech by Ross Jones, Deputy Chairman Australian Prudential Regulation Authority, outlines the current position relating to draft prudential standards for superannuation, the MySuper authorisation process and the consultation process surrounding the new reporting standards.

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Posted 24th August 2012 by David Jacobson in Financial Services, Superannuation

August 20, 2012

New AML designated service: roll-overs to SMSFs

Treasury has released for public consultation an exposure draft of The Tax Laws Amendment (2012 Measures No. 5) Bill 2012: Roll-overs to self managed superannuation funds which amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act).

The amendment provides that a new designated service be included at Table 1 of section 6 of the AML/CTF Act to capture the roll-over of funds from a superannuation fund that is not an SMSF (the transferring fund) to an SMSF (the receiving fund).

It is intended that this amendment will have the effect of requiring the transferring superannuation fund to comply with a range of obligations under the AML/CTF Act.

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Posted 20th August 2012 by David Jacobson in Anti-money laundering, Superannuation, Tax

August 17, 2012

Superannuation Trustee Obligations and Prudential Standards Bill passed

The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 has now been passed by both Houses of Parliament and is awaiting Royal Assent.

UPDATE 11 September 2012: Assent

Background
Draft prudential standards

The prudential standards provisions will apply from the day after Royal Assent. The enhancements to trustee obligations will apply from 1 July 2013.

The Bill introduces the power for the Australian Prudential Regulation Authority (APRA) to make prudential standards, amends section 52 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) to expand the duties for registrable superannuation entity (RSE) licensees, applies new trustee duties to RSE licensees of an RSE that offers a MySuper product and applies duties to the directors of corporate trustees.

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Posted 17th August 2012 by David Jacobson in Financial Services, Superannuation

July 31, 2012

Stronger Super draft bills

Treasury has released Superannuation Legislation Amendment 2 (Stronger Super and Other Measures) 3 Bill (No. 2) 2012:expanded superannuation reporting and Superannuation Legislation Amendment 2 (Stronger Super and Other Measures) 3 Bill (No. 2) 2012: Reporting to members for consultation.

The legislation will:

amend the Income Tax Administration Act 1953 to expand the information required to be reported by superannuation providers in respect of their members. Under the revised reporting obligations, superannuation providers will be required to provide statements for all members who held an interest in the fund at any time during the reporting period, not just those for whom contributions are received. These amendments will allow the ATO to display more comprehensive superannuation information to individuals, facilitate the consolidation of lost and inactive accounts with a balance below $1,000 and the increased concessional contributions cap for members with balances of less than $500,000 from 1 July 2014.
require superannuation funds and retirement savings account (RSA) providers to notify active members quarterly, by electronic means, that they have either ‘received’ or ‘not received’ contributions during the quarter, and maintain a web-based portal for members to consult; or alternatively to issue six monthly notices which show contributions made.

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Posted 31st July 2012 by David Jacobson in Financial Services, Superannuation