01 April 2020
Published by Luke Hooper
ASIC commences proceedings against Colonial First State over dealings with MySuper accounts (17 March 2020)
ASIC commenced civil penalty proceedings in the Federal Court against Colonial First State Investments Limited (Colonial) in its own capacity, and as the trustee for the Colonial First State FirstChoice Superannuation Trust (FirstChoice Fund). ASIC commenced proceedings for alleged breaches of the ASIC Act and the Corporations Act regarding alleged misleading or deceptive communications with members of the FirstChoice Fund.
ASIC alleges that, between March 2014 and August 2016, Colonial communicated with FirstChoice Fund members in a misleading or deceptive manner regarding the provision of investment directions to stay within the FirstChoice Fund rather than transitioning to Colonial’s MySuper product.
ASIC’s case focuses on template letters sent to members, as well as 46 telephone calls made in accordance with scripts. ASIC also alleges that Colonial failed to provide a general advice warning during the telephone calls. According to ASIC, a total of 8,605 members directed Colonial that they remain in the existing product.
ASIC contends that the communications also amounted to breaches of Colonial’s obligations:
ASIC is seeking declarations of breaches of:
Further, ASIC is seeking the imposition of civil penalties under the ASIC Act, sections 12DB (false or misleading representations) and 12DF (certain misleading conduct) in relation to the communications.
The proceeding will be listed for a first case management conference on a date to be fixed by the Court.
MySuper Heatmap Frequently Asked Questions (19 March 2020)
APRA released the following updates to its MySuper Heatmap Frequently Asked Questions:
1. What are APRA’s plans for the next update to the December 2019 MySuper Product Heatmap?
Further to FAQ no. 10 in the general questions section below, APRA will publish in June 2020, the concise and expanded ‘fees and costs’ metrics included in the December 2019 heatmap with updated data. APRA’s decision to solely publish fee data reflects the purpose of the update - to show actions taken by trustees to address areas of underperformance, which APRA considers to reasonably be expected to have occurred since the heatmap was published in December 2019. Improvements to investment performance and sustainability would be expected to manifest over a longer timeframe, which APRA will reflect in later heatmap publications.
2. Why isn’t APRA publishing updates to the heatmap to reflect resubmitted historical data?
A small minority of trustees have resubmitted changes to their Strategic Asset Allocation in Reporting Standard SRS 533.0 Asset Allocation and their investment performance in Reporting Standard SRS 702.0 Investment Performance. APRA is validating these resubmissions and, if substantiated, the revised data will be reflected in the next iteration of the heatmap, planned for release in December 2020.
3. How can trustees ensure updated fees and costs are reflected in the heatmap?
Any ad-hoc submission of Reporting Standard SRS 703.0 Fees Disclosed received by APRA by 5pm on 29 May 2020 via Direct to APRA (“D2A”) will be included in the updated heatmap to be released in June 2020. Trustees can make a request to submit an ad-hoc submission of Reporting Standard SRS 703.0 Fees Disclosed by emailing DataAnalytics@apra.gov.au. Refer to guidance on APRA’s website.
4. What if the updated fees and costs are submitted to APRA after 29 May 2020?
Any updated fees and costs submitted to APRA after 29 May 2020 will be reflected in the next iteration of the heatmap, planned for release in December 2020.
5. Some trustees have indicated they are increasing fees as a result of the Protecting Your Super measures. Will APRA publish increases in fees as well as reductions?
APRA will publish all changes in fees and costs submitted to APRA on Reporting Standard SRS 703.0 Fees Disclosed by 5pm on 29 May 2020.
APRA and ASIC recalibrations due to COVID-19 (23 & 24 March 2020)
In response to COVID-19, ASIC announced that:
In suspending the above activities, ASIC states that:
APRA also announced the following in response to the health crisis:
AFCA response to COVID-19 challenges (23 March 2020)
AFCA announced that:
Treasury Laws Amendment (Measures for a later sitting) Bill 2020: Improving Flexibility for Older Australians and Superannuation Legislation Amendment (2020 Measures No 1) Regulations 2020 (5 March 2020)
The exposure draft Bill and Regulations are intended to:
Treasury is seeking submissions from interested parties by 3 April 2020.
Treasury Laws Amendment (Recovering Unpaid Superannuation) Act 2020 (Cth) (6 March 2020)
The Act amends the Income Tax Assessment Act 1997 (Cth) and Superannuation Guarantee (Administration) Act 1992 (Cth) to:
Under the new laws:
It will be interesting to see if the amnesty period is extended or remains where it is, with at least one association calling for a six-month extension.
Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (Royal Assent 24 March 2020)
The Act implements the Federal Government’s COVID-19 response package, including (but not limited to) the following:
Key superannuation rates and thresholds (24 March 2020)
The following key superannuation rates and thresholds will apply as at the commencement of the 2021 financial year:
Salary sacrifice and super guarantee (26 March 2020)
The ATO issued Guidance Note GN 2020/1 Salary sacrifice and super guarantee (Guidance Note) which provides guidance for employers applying the super guarantee changes for salary sacrifice arrangements commencing on 1 January 2020.
From 1 January 2020, employers must calculate the minimum amount of super guarantee on an employee’s ordinary time earnings base even if they salary sacrifice so that contributions made under an effective salary sacrifice arrangement no longer count towards an employer’s super guarantee obligations.
Super liquidity issues up for scrutiny (27 March 2020)
The House of Representatives Standing Committee on Economics Chair, Mr Tim Wilson MP has stated that “[i]n the last round of hearings the superannuation sector dismissed the committee’s concerns about liquidity associated with the structure of their funds. Considering the super funds are now claiming liquidity issues which is inconsistent with the spirit of evidence they had previously submitted, the committee is reserving its right to hold a hearing with APRA, and the superannuation sector in the interests of financial stability”.
We would imagine that all trustees have robust investment management frameworks that manage liquidity and include regular stress testing. But in saying that, and noting that there are clearly some outspoken personalities within Government that have a particular view of superannuation, watch this space.
Author: Luke Hooper
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 newsletter is accurate at the date it is received or that it will continue to be accurate in the future.
Published by Luke Hooper