All the latest news.
|No.||What||Who||Need to Know||Important Dates||Links|
|1.||Your Future, Your Super Bill passed, with amendments||Super funds||The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 (Cth) (Your Future, Your Super Bill) was passed on 17 June 2021, with amendments. The government has:|
The Your Future, Your Super Bill amends the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) to:
|1 July 2021 - Best financial interests duty and record-keeping obligations will take effect, and Annual performance tests requirements will apply to MySuper products|
1 November 2021 - Single default account for new employees
1 July 2022 - Annual performance tests will apply for choice products
|You can access the Bill here.|
|2.||ASIC releases guidance on ongoing fee arrangements||Super funds Advisers||ASIC has released:|
in light of the recent changes to the law that will take effect on 1 July 2021 (refer to 'Coming up' item 6, below).
INFO 256 answers frequently asked questions about the obligations that apply to fee recipients in relation to ongoing fee arrangements, fee disclosure statements and ongoing fee consents.
The new ASIC RG 175 contains minor updates to reflect the changed requirements for ongoing and non-ongoing fee arrangements. It also provides an example 'lack of independence disclosure statement'
|N/A||Read ASIC's media release here.
Access INFO 256 here.
Access the updated ASIC RG 175 here.
|3.||SuperStream Rollover v3 - new ATO resources released||Super funds||The ATO has released further supporting documentation to assist APRA-regulated funds and DSPs in the transition to SuperStream Rollover v 3.|
Most recent guidance released 11 June 2021 (SuperStream Rollover v3 implementation and onboarding information).
|The SuperStream Rollover message includes SMSFs and digital release authorities from 31 March 2021.|
The transition period for implementation and onboarding to SuperStream Rollover v 3 is from 31 March 2021 to 30 September 2021.
|Access the new resources on the ATO's website, here.|
|4.||APRA Connect update||Super funds||APRA has published further information to assist entities in preparing for APRA Connect - APRA's new data collection solution for reporting entities.||APRA Connect test environment launches on 17 June 2021.|
Production environment goes live on 13 September 2021
|Access information on APRA Connect here.|
|5.||Family law - Draft legislation on superannuation information for family law proceedings released for consultation||Super funds||The draft Treasury Laws Amendment (Measures for Consultation) Bill 2021: Superannuation information for family law proceeding amends the Taxation Administration Act 1953 and the Family Law Act 1975 to:|
The new information-sharing process is intended to make it harder for parties to hide or under-disclose their superannuation assets in family law proceedings.
|Consultation closes 28 June 2021||Access the draft legislation and explanatory materials here.|
|6.||Temporary 50% reduction in superannuation minimum drawdown rates extended||Super funds||The government has announced that it will extend the temporary 50% reduction in superannuation minimum drawdown rates for a further year to 30 June 2022.||Applicable until 30 June 2022.||Read the joint media release here.|
|7.||APRA publishes speech on best practice on risk culture||APRA regulated entities||APRA has published a speech to the AFSA Spotlight on Risk & Compliance event by APRA Executive Director, Superannuation Division, Suzanne Smith.|
The speech outlines APRA's idea of the building blocks of 'good' conduct and culture, walks through what constitutes good practices, and indicates what types of behaviour gives the regulator cause for concern.
|N/A||Read the speech here.|
|8.||Financial Regulator Assessment Authority Bill 2021 (Cth) passes House of Reps||APRA and ASIC||The Financial Regulator Assessment Authority Bill 2021 (Cth) passed the House of Representatives on 26 May 2021. The Bill establishes the Financial Regulator Assessment Authority to assess the effectiveness and capability of APRA and ASIC. It will now be considered by the Senate.||The Bill will take effect from 1 July 2021 (or from the day that the Bill receives assent, if later).||You can access the bill here.|
|9.||APRA Superannuation Data Transformation - additional FAQs added||Super funds||APRA has published additional FAQs and worked examples for RSEs about the Reporting Standards for Phase 1 of the Superannuation Data Transformation project. FAQ 1.2 has also been updated to clarify reporting under Reporting Standard SRS 332.0 - Expenses.||The first collection of data under the new Reporting Standards is scheduled for 30 September 2021.||Access the updated FAQs here.|
This section sets out reforms and other measures which are about to commence.
|No.||What||Who||Need to Know||Important Dates||Links|
|1.||Claims handling as a financial service||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act 2001 (Cth) (Corporations Act) to make claims handling a financial service requiring an AFS license authorisation.||The 12 month transition period ends on 1 January 2022.|
Firms required to hold an AFS licence must lodge an application or variation request by 30 June 2021 in order to continue to provide claims handling and settling services, while ASIC assesses their application.
ASIC warns licence applications (new and varied) should be lodged as soon as possible, and by no later than 7 May 2021, to ensure the applicant has sufficient time to rectify and re-submit a rejected application before the 30 June 2021 deadline.
|Read ASIC's media release on claims handling AFS licence applications here.
You can access the legislation and explanatory material here.
|2.||APRA draft PPG Remuneration released for consultation||APRA Regulated entities||On 30 April 2021 APRA released draft Prudential Practice Guide CPG 511 Remuneration (CPG 511) for consultation. CPG 511 provides principles and better practice examples to assist APRA regulated entities to comply with the new prudential standard CPS 511 Remuneration which was released on 12 November 2020.||Consultation closes 23 July 2021.|
The final versions of CPS 511 and CPG 511 will be published late 2021.
|For more information, read ASIC's media release here.
You can access the draft CPG 511 and consultation letter here.
|3.||Reuniting More Superannuation Regulations made||Super funds |
|Regulations have been made to facilitate amendments made in the Treasury Laws Amendment (Reuniting More Superannuation) Act 2021 (Cth). The Act requires eligible rollover funds (ERFs) to close by 30 June 2021 (for accounts that had a balance of less than $6,000 on 1 June 2021) and by 31 January 2022 (for all other accounts). It also enables the Tax Commissioner to reunite amounts received from ERFs with a member's active account. The Treasury Laws Amendment (Reuniting More Superannuation) Regulations 2021 support these changes by:||Low balance ERF accounts to close by 30 June 2021.|
All other ERF accounts to close by 31 January 2022.
|You can access the legislation and explanatory material here.
The regulations can be viewed here.
|4.||Trustees of registrable superannuation entities should have no other duty||RSEs||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) to prohibit RSEs from having a duty to act in the interests of another person, except in the course of performing its duties or exercising its powers as a superannuation trustee, or in providing personal advice.||1 July 2021||You can access the legislation and explanatory material here.|
|5.||Superannuation Transfer Balance Cap increase||Retirement income providers|
|The general 'transfer balance cap' (TBC) will be indexed by $100,000 to $1.7 million (from $1.6 million) on 1 July 2021.|
Once indexation occurs, no single TBC will apply. Instead, individuals will have a personal TBC somewhere between $1.6 and $1.7 million.
The indexation of the TBC also changes other caps and limits that apply to members, if they make:
|1 July 2021||For more information, view the ATO's summary here.|
|6.||Written consent required for deduction of advice fees||Advisers|
|The Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021 (Cth) amended the Corporations Act and the SIS Act as follows:|
The written consent referred to above must meet the requirements of the ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124 or the ASIC Superannuation (Consent to Pass on Costs of Providing Advice) Instrument 2021/126, respectively.
|The new rules commence on 1 July 2021, and will apply to fees payable under arrangements entered into on or after that date.|
A transitional period will apply from 1 July 2021 until 1 July 2022 for existing arrangements entered into before 1 July 2021.
|To view either legislative instrument, or find out more, read ASIC's media release here.|
|7.||Superannuation guarantee increases to 10%||Super funds|
|Under section 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth) the charge percentage against which an employer will be judged to have met their obligation in respect of each employee will increase from 9.5% to 10%.||Effective from 1 July 2021||You can access the legislation here.|
|8.||Superannuation rates and thresholds for 2021-22||Super funds||On 29 April 2021 the ATO published the key superannuation rates and thresholds for the 2021-22 year.||Effective from 1 July 2021||You can access the updated rates and thresholds on the ATO's website here.|
|9.||ASIC RG 97||Super funds|
Responsible entities and notified foreign passport funds
|Fees and costs disclosure for products with an investment component must comply with the 'new' RG97.||The new requirements apply to periodic statements for reporting periods commencing on or after 1 July 2021 and to product disclosure statements given on or after 30 September 2022.|
Issuers may elect to apply the new requirements to any PDSs and any periodic statement for reporting periods commencing on or after 1 July 2020.
|You can view the new RG97 here.|
|10.||APRA draft PPG on climate change financial risks released||Super funds|
|APRA has released its draft Prudential Practice Guide CPG 229 Climate Change Financial Risks (CPG 229) for consultation.||Consultation closes 31 July 2021.||Access the draft PPG and APRA's media release here.|
|11.||ASIC action - Misleading or deceptive conduct - REST||Super funds||ASIC commenced proceedings in the Federal Court on 2 March 2021 against Retail Employees Superannuation Pty Ltd (REST), for false or misleading representations made about the ability of its members to transfer their superannuation out of the Retail Employees Superannuation Trust (the Fund).||The next case management hearing is listed on 18 August 2021.||View the originating process here.
Read ASIC's media release here.
|12.||Reference checking and information sharing protocol||AFS licensees|
Australian credit licensees
|The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) imposes new obligations on Australian financial services licensees and Australian credit licensees regarding reference checks and information sharing.||The new obligations will apply from 1 October 2021.||You can access the legislation and explanatory material here.|
|13.||Breach reporting reforms||AFS licensees|
Australian credit licensees
|The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act and National Consumer Credit Protection Act 2009 (Cth) to strengthen the existing breach reporting regime for AFS licensees, and introduce a comparable breach reporting regime for credit licensees.|
Key changes to the regime include:
|The new regime commences on 1 October 2021.||You can access the legislation and explanatory material here.
For information on ASIC's draft regulatory guidance, read ASIC's media release here.
|14.||Change to Insurers Duty of Disclosure||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Insurance Contracts 1984 (Cth) to replace the insured's duty of disclosure with a duty to take reasonable care not to make a misleading representation, in consumer insurance contracts.||The amendments will apply to all consumer insurance contracts (for both general and life insurance) entered into or varied on or after 5 October 2021.||You can access the legislation and explanatory material here.|
|15.||Hawking of financial products||Distributers of financial products||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act to replace the three existing hawking prohibitions with one general prohibition that applies to the hawking of all financial products, with limited exceptions.|
The amendments also introduce a definition of 'unsolicited contact'.
|The new regime commences 5 October 2021.||You can access the legislation and explanatory material here.|
|16.||Deferred sales model for add on insurance||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the ASIC Act to introduce a four-day pause between the sale of a principal product or service and the sale of an add-on insurance product.||The new regime commences 5 October 2021.||You can access the legislation and explanatory material here.
ASIC's draft regulatory guidance can be accessed here.
|17.||Extension of transitional compliance approach - non arm's length expenditure for super funds||Super funds||The ATO has amended Practical Compliance Guideline PCG 202/5 to extend the compliance approach to the 2021-22 financial year. The ATO will not allocate compliance resources to determine whether the income of a complying super fund is non-arm's length income (NALI) where the fund incurred 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 for the 2018–19 to 2021–22 income years (for example, non-arm's length expenditure on accounting services).||The transitional compliance approach only applies to general expenditure incurred on or before 30 June 2022.||Read the updated PCG 2020/5 on the ATO's website, here.|
Watch and Wait
The section sets out items where we’re waiting for further action to be announced or taken (eg consultation pieces, where the consultation period has ended).
|No.||What||Who||Need to know||Important dates||Links|
|1.||Transparency of proxy advice||Institutional shareholders, such as superannuation funds, that engage proxy advisers||On 30 April 2021 the Government released a consultation paper seeking feedback on how to increase the transparency and accountability of the provision of proxy advice, including requiring proxy advisers to hold an Australian Financial Services Licence and meet requirements in relation to independence.||The extended consultation period closed on 4 June 2021.||Consultation paper can be accessed here.|
|2.||Your Future, Your Super - regulations||Super funds||The government released three sets of exposure draft regulations in support of the Treasury Laws Amendment (Your Future, Your Super) Bill 2021. The regulations provide:||Consultation closed 25 May 2021.||You can access the draft regulations and explanatory material here.|
|3.||2021-22 Federal Budget announcement - Industry working group to consult on legacy product rationalisation||Life insurers|
Responsible entities and trustees of MIS
|$2.5 million will be provided over 2 years to fund an industry working group to develop a mechanism to facilitate the movement of policyholders and members from closed life products and managed investment products to new products.||For 2 years from 2021-2022.||The 2021-22 Budget Paper No. 2 can be accessed here.|
|4.||2021-22 Federal Budget announcement - More flexibility for the Pension Loans Scheme||Retirement income stream providers||The Pension Loan Scheme will be expanded to:||These improvements will be made over 4 years from 2021-22.||The 2021-22 Budget Paper No. 2 can be accessed here.|
|5.||2021-22 Federal Budget announcement - Repeal of the work test for voluntary contributions for people aged 67 to 74||Super funds|
|People aged 67 to 74 (inclusive) will no longer need to meet the work test (ie being gainfully employed for at least 40 hours over a 30 day period) to make or receive voluntary non-concessional contributions. They will still need to meet the work test to receive concessional contributions.||This measure is expected to take effect prior to 1 July 2022.||The 2021-22 Budget Paper No. 2 can be accessed here.
Read the ATO's webpage here.
|6.||2021-22 Federal Budget announcement - Lowering of eligibility age for downsizer contributions||Super funds||The eligibility age to make downsizer contributions into super will be lowered from 65 to 60 years of age.||This measure is expected to take effect prior to 1 July 2022.||The 2021-22 Budget Paper No. 2 can be accessed here.
Read the ATO's webpage here.
|7.||2021-22 Federal Budget announcement - Removal of the $450 per month threshold for superannuation guarantee eligibility||Super funds|
|Removal of the $450 per month minimum income threshold for payment of the superannuation guarantee by employers. After this is implemented, employers will have superannuation guarantee obligations in respect of individuals earning less than $450 per month.||This measure is expected to take effect prior to 1 July 2022.||The 2021-22 Budget Paper No. 2 can be accessed here.
Read the ATO's webpage here.
|8.||2021-22 Federal Budget announcement - Increase to voluntary contributions that can be released under the First Home Super Saver Scheme||Super funds||The amount of voluntary contributions that can be released under the First Home Super Saver Scheme will increase from $30,000 to $50,000.||This measure is expected to take effect prior to 1 July 2022.||The 2021-22 Budget Paper No. 2 can be accessed here.
Read the ATO's webpage here.
This article was written by Adeline Hiew, Partner, Christine Blight, Special Counsel, Linda Chan, Solicitor and Joanna Roberts, Solicitor.