05 May 2021
ATO updated superannuation caps and thresholds for 2021-2022 (1 April 2021)
From 1 July 2021, the following rates and thresholds apply to contributions and benefits, employment termination payments, super guarantee and co-contributions:
ATO Practical Compliance Guideline PCG 2020/5: Applying the non-arm's length income provisions to 'non arm's length expenditure' – ATO compliance approach for complying superannuation entities (9 April 2021)
The Commissioner of Taxation (Commissioner) has amended the Guideline by extending the Guideline’s compliance approach to the 2021/22 financial year.
The Guideline provides a transitional compliance approach for a complying superannuation entity concerning the application of the amendments to non-arm’s length income (NALI) rules under the Income Tax Assessment Act 1997 (Cth), in respect of the 2019 to 2021 financial years.
The Guideline states that the ATO will not allocate compliance resources to determine whether the NALI provisions apply to a complying superannuation fund for the 2019 to 2021 financial years where the fund incurred certain non-arm's length expenditure of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in those respective financial years (for example, non-arm's length expenditure on accounting services).
This transitional compliance approach does not apply where the fund incurred non-arm's length expenditure that is directly related to the fund deriving particular ordinary or statutory income.
Former Aon Hewitt financial adviser banned for four years (20 April 2021)
ASIC banned a former authorised representative of Aon Hewitt Financial Advice Limited from providing financial services for four years as a result of ASIC surveillance finding that the adviser authorised misleading and inaccurate letters about the transition of default accounts to MySuper to some Aon Master Trust members. ASIC found that:
ASIC states that after receiving the letters, hundreds of members did not fully transition to MySuper and, instead, their accrued default amounts remained in Aon Master Trust’s Choice superannuation product, which was generally more expensive than the MySuper product.
Consultation on APRA’s draft Prudential Practice Guide on Climate Change Financial Risks (22 April 2021)
APRA released the draft Prudential Practice Guide CPG 229 Climate Change Financial Risks (CPG 229) which is designed to assist APRA-regulated entities in managing climate-related risks and opportunities as part of their existing risk management and governance frameworks.
CPG 229 covers APRA’s view of sound practice in areas such as governance, risk management, scenario analysis and disclosure, but does not create new requirements or obligations.
APRA states that whilst it considers that climate risks can and should be managed within an institution’s broader risk management framework, the financial risks associated with climate change have a number of elements that distinguish them from other financial risks, and necessitate a strategic approach to their management.
Submissions are due by 31 July 2021.
ASIC’s Consultation Paper 340 Breach reporting and related obligations (22 April 2021)
ASIC issued its Consultation Paper setting out its proposals to guide AFSL holders on the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) breach reporting obligation that applies from 1 October 2021.
The Consultation Paper accompanies a draft regulatory guide and information sheet, and contains the following proposals on which ASIC is seeking feedback:
Submissions are due on 3 June 2021.
ASIC extends deadlines for financial reports (23 April 2021)
ASIC has extended the deadline for listed and unlisted entities to lodge financial reports from 23 June to 7 July 2021 to assist with the account challenges presented by COVID-19 and to provide enough time to complete audit processes.
The deadline for lodgement of full-year financial reports, directors’ reports and auditor’s reports for:
The deadline for lodgement of half-year financial reports, directors’ reports and audit/review reports for listed entities and unlisted disclosing entities (including unlisted registered schemes that are disclosing entities) is also extended from 75 to 75 days plus one month.
The deadline for lodgement of profit and loss and balance sheets (and other associated information) for:
APRA frequently asked questions – Superannuation Data Transformation (23 April 2021)
APRA released the following frequently asked questions (FAQs) on commonly asked questions about APRA reporting requirements:
1.1: Can all the reports be submitted in Excel format via APRA Connect?
1.2: What are the due dates for submission of data under the new reporting standards?
1.3: Do reporting standards from the existing data collection still need to be submitted?
FAQs for SRS 605.0
605a: How frequently is reporting under SRS 605.0 required if there is no change to an RSE's products, investment menus and investment options?
605b: What changes result in an ad-hoc submission of SRS 605.0?
605c: If RSEs are merging at 30 June 2021 what should they report under SRS 605.0?
605d: Can APRA clarify what should be reported under SRS 605.0 when the RSE does not have any superannuation products?
605e: Can APRA clarify what to report under SRS 605.0 when the RSE does not have an investment menu?
605f: Should investment options that are not currently on offer be reported?
605g: Can APRA clarify what should be reported under SRS 605.0 and SRS 606.0 where the RSE offers MySuper as an investment option within one or more products?
605h: Which direct investment options can be reported on an aggregated basis?
FAQs for SRS 606.0
606a: How should we report the ‘Number of member accounts’ in an investment option underlying defined benefits?
FAQs for SRS 705.0
705a: Do we need to report member initiated switching fees or buy/sell spreads on SRF 705.0?
FAQs for SRS 251.0
251a: Could APRA please clarify the reporting for 'number of policies in cluster' (SRF 251.0 table 1 column 7)?
251b: Under table 1 of SRS 251.0, are underwritten policies to be counted as separate policies?
251c: How does APRA expect an entity to categorise their occupation ratings into the categories provided under SRS 251.0?
FAQs for SRS 706.0
706a: How should fees and costs for defined benefit sub-funds be reported under SRS 706.0?
706b: Some discounted fee structures exist for corporate superannuation plans that are not detailed in a PDS. Such arrangements may be subject to confidentiality clauses in contracts with employers. Are such fee structures required to be reported?
Former Australian Unity financial adviser banned for five years (29 April 2021)
ASIC banned a former authorised representative of Australian Unity Personal Financial Services Limited from providing financial services for five years.
The ban follows an ASIC surveillance, which found that the adviser sent misleading and deceptive emails about superannuation to some clients in 2016 in contravention of section 1041H of the Corporations Act.
ASIC’s review found that the adviser advised clients to opt-out of MySuper, claiming that the MySuper product had higher fees than the fee on their existing superannuation balances. However, this information was not correct for every client. ASIC states that subsequent to these emails, some members did not fully transition to MySuper and continued paying higher fees as a result.
In providing this advice, ASIC found the adviser failed to identify each client’s objectives, financial situation and needs, and base all judgements on each client’s relevant circumstances, while also prioritising his company receiving commissions over the interests of his clients.
During the initial course of ASIC’s enquiries, ASIC stated that the adviser failed to disclose the emails to his licensee or to ASIC. ASIC further states that it considers that the adviser was not adequately trained or competent to provide financial services, and that he was likely to contravene a financial services law in future.
APRA consults on guidance in support of prudential standard on remuneration (30 April 2021)
APRA has commenced consultation on its draft guidance to assist the industry meet the requirements of APRA’s updated prudential standard on remuneration.
The draft Prudential Practice Guide CPG 511 Remuneration (CPG 511) sets out principles and examples of better practice to assist banks, insurers and superannuation licensees comply with prudential standard CPS 511 Remuneration (CPS 511) which will be finalised later this year.
CPG 511 will assist trustees to comply with the new standard by:
APRA is currently reviewing stakeholder submissions on the revised CPS 511 that was released for consultation in November 2020, but does not anticipate material changes. The final versions of CPS 511 and CPG 511 will be published in the second half of this year.
Submissions are due by 23 July 2021.
Treasury Laws Amendment (Reuniting More Superannuation) Regulations 2021 (1 April 2021)
The Treasury Laws Amendment (Reuniting More Superannuation) Regulations 2021 (TLA Regulations) amends the Superannuation (Unclaimed Money and Lost Members) Regulations 2019, the Retirement Savings Accounts Regulations 1997 and the SIS Regulations. The TLA Regulations align those regulations with changes to the corresponding legislation made through the Treasury Laws Amendment (Reuniting More Superannuation) Act 2021 (Cth), which includes:
The TLA Regulations support these changes by:
Exposure Draft - Treasury Laws Amendment (Your Future, Your Super - Addressing Underperformance in Superannuation) Regulations 2021 (28 April 2021)
Treasury has released, for consultation, proposed regulations seeking to introduce elaborate annual performance assessment requirements into SIS as part of the Your Future, Your Super Bill currently before Parliament, including the methods for determining annual and benchmark returns for standard and lifecycle products.
Submissions are due by 25 May 2021.
Treasury Laws Amendment (Your Future, Your Super – Improving accountability and member outcomes) Regulations 2021 – (28 April 2021)
Treasury has released, for consultation, proposed regulations seeking to:
as part of the Your Future, Your Super Bill currently before Parliament.
Submissions are due by 25 May 2021.
Exposure Draft – Treasury Laws Amendment (Your Future, Your Super – Single Default Account) Regulations 2021 (28 April 2021)
Treasury has released, for consultation, proposed regulations seeking to introduce stapled fund requirements (including a tiebreaker requirement) into the Superannuation Guarantee (Administration) Regulations 2018 as part of the Your Future, Your Super Bill currently before Parliament.
Under the proposed regulations:
Submissions are due by 25 May 2021.
Draft Regulator Performance Guide consultation supporting material (April 2021)
The Federal Government has released, for consultation, a draft Regulator Performance Guide which outlines the principles of best practice that underpin the Government’s expectations of regulators and their performance, being:
Submissions are due by 21 May 2021.
Appointment of new Chairperson and Deputy Chairperson to ASIC (29 April 2021)
The Government has appointed Mr Joseph Longo as the full‑time Chairperson and Ms Sarah Court as a full‑time Deputy Chairperson to ASIC for a five‑year period commencing on 1 June 2021.
Authors: Luke Hooper & Michael O’Connor
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.