Super Alert – 10 May 2019
This week’s Super Alert covers two important releases from the ATO and APRA concerning implementation of the ‘Protecting Your Super’ legislative package.
ATO PYS Super Measures Group updates
On 7 May 2019, the ATO updated its “Let’s Talk” forum to include links to documents developed by its Super Measure Group in relation to the implementation of the “Protecting Your Super” package. The ATO explains that the “purpose of this content is to provide guidance to trustees on the administration of the changes under the Protecting Your Super Package (PYS) and an opportunity for trustees to provide feedback on the implementation material”. The available documents include the following:
- “Protecting Your Super (PYS) Questions and Answers – we have maintained an issues log…to record the questions and issues raised [in relation to Protecting Your Super] and our response or resolution”;
- “Member Authorisation Form Questions and Answers – Members are able to provide a written notice to the Commissioner declaring they are not a member of an inactive low-balance account. Members may authorise funds to provide the written notice to the ATO on their behalf. These Questions and Answers relate to key questions about the declarations process”; and
- “Draft Member Authorisation Form – To assist funds where members want to authorise them to provide the written notice we have produced a member authorisation form”.
Feedback about the above materials can be submitted to the ATO until 10 June 2019.
Please click here to read more.
APRA PYS letter and FAQs released
On 8 May 2019, APRA issued a letter to all RSE licensees relating to the Protecting Your Super package which was accompanied by a list of frequently asked questions (FAQs). APRA acknowledges that the reforms may “require significant changes to systems and practices prior to their commencement on 1 July 2019” so the FAQs have been developed to provide guidance.
According to APRA’s FAQs:
- “When establishing the account balance for the product, an RSE licensee is required to establish how much of a member’s overall account balance relates to the relevant product. Therefore, for the purpose of applying the fee cap, each product that the member holds must be treated as having its own separate account balance, meaning a member may have more than one account balance for the purpose of applying the fee cap”;
- “When determining products for the purpose of applying the fee cap, a trustee may determine that a member’s investment choices are one product… However, a MySuper product cannot be considered to be a choice option within an account for the purpose of applying the cap, or for any other purpose”;
- “A trustee will need to determine whether a member’s investment choices are part of a single choice product or whether they are individual choice products for the purpose of applying the test”;
- “Trustees have up to 3 months after the end of the income year to provide the [excess fee] refund, or in the case of a member leaving a fund part way through a year, 3 months from the day the member left the fund”;
- “The insurance opt-in changes apply at the product level…for members with accounts that have two or more products, trustees will need to identify the product under which the provision of insurance is being provided”; and
- “The ATO view is that, in determining whether an account meets the definition of an [inactive low balance account], the tests in subparagraph 20QA(1)(a)(iv), (v) and (viii) need to be applied at a product level, not at an aggregated account level that incorporates products”.
This alert was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.
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Important Disclaimer: The material contained in this publication is of a general nature only and is based on the law as of the date of publication. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.