The highlights of this week’s Super Alert include the introduction of Bills to facilitate the closure of ERFs and to provide permanent tax relief to merging funds, as well as ASIC’s report into its review of trustees’ PYS communications.
Review of ASIC Annual Report 2018
On 10 February 2020, the House of Representatives Standing Committee on Economics tabled its Review of the Australian Securities and Investments Commission Annual Report 2018. The report noted ASIC’s progress toward implementation of the Royal Commission’s recommendations, in particular ‘ASIC’s new enforcement strategy, which focuses on increased and accelerated court-based outcomes and the use of new and tougher penalties; and its more intensive supervisory approach, which aims to improve the culture and behaviour of financial firms’.
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Permanent tax relief for merging funds – Bill introduced
On 12 February 2020, the Treasury Laws Amendment (2020 Measures No. 1) Bill 2020 was introduced into the House of Representatives. According to the Explanatory Memorandum, ‘[t]he tax system currently contains temporary arrangements for loss relief and asset rollover that provide relief from CGT liabilities to superannuation funds in the event of fund mergers and transfer events’. As these temporary arrangements will expire on 1 July 2020, the Bill proposes to make the arrangements permanent.
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Extension to Senate Committee reporting date – Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019
On 12 February 2020, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 was introduced into the Senate after being passed by the House of Representatives on the same day. The Senate had earlier in the week resolved to extend the due date for its Economics Legislation Committee’s report in relation to the Bill from 21 February 2020 to 20 March 2020.
This Bill proposes to amend the Superannuation Guarantee (Administration) Act 1992 to provide that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund (refer to our Super Alert of 29 November 2019).
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Bill to facilitate closure of ERFs introduced
On 12 February 2020, the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 was introduced into the Senate after being introduced and passed by the House of Representatives on 6 February 2020. According to the Explanatory Memorandum, the purpose of this Bill is ‘to facilitate the closure of eligible rollover funds by 30 June 2021 and allow the [ATO] to reunite amounts [they receive] from eligible rollover funds with a member’s active account’.
This Bill follows the Federal Government’s announcement on 13 December 2019 to wind up eligible rollover funds (refer to our Super Alert of 19 December 2019).
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ASIC releases report on PYSP communications
On 12 February 2020, ASIC released a report (REP 655) entitled ‘Review of member communications: Protecting Your Superannuation Package (PYSP) reforms’. The report identifies the main findings from ASIC’s review of the ‘disclosures, communications plans and data of 12 superannuation funds relating to reforms introduced by the PYSP Act and the Treasury Laws Amendment (Protecting Your Superannuation Package) Regulations 2019’.
Some of ASIC’s key findings include:
- ‘Some trustees did not provide members with appropriate context and balanced communications’;
- ‘Some trustees placed insufficient emphasis on members’ needs’;
- ‘Some trustees had limited or incomplete member contact information’; and
- ‘Many trustees failed to provide information that would have been helpful for members’.
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Bills to create director registry passed by House of Representatives
On 13 February 2020, the Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 and four associated Bills were introduced into the Senate after being passed by the House of Representatives on 12 February 2020. According to the combined Explanatory Memorandum, the purpose of the Bills are to ‘create a new Commonwealth business registry regime’ and amend the Corporations Act 2001 (Cth) in order to ‘introduce a director identification number (DIN) requirement’.
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This article was written by Natalie Cambrell, Partner, Sanela Osmanovic, Associate and Joseph Cheung, Solicitor.