In our last Super Alert for 2019, we note quite a number of developments including ASIC’s report on the implementation of the Insurance in Superannuation Voluntary Code of Practice and the Government’s announcement to facilitate the exit of ERFs by 30 June 2021.
The Super Alerts for 2020 will recommence in late January. Best wishes of the season to all our colleagues and clients!
ASIC report – implementation of the Insurance in Superannuation Voluntary Code of Practice
On 13 December 2019, ASIC released a report entitled ‘Insurance in Superannuation 2019-20: Industry implementation of the Voluntary Code of Practice’ (Report). The Report notes that ‘[a]doption of the Code is contributing to a promising uplift in, and standardisation of, processes and services – but adoption is not universal or entirely consistent’.
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Government announces plan to wind-up ERFs by 30 June 2021
On 13 December 2019, the Hon Josh Frydenberg, Treasurer, and the Hon Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, published a joint media release. The media release announced that the Government will introduce legislation early next year to ‘facilitate the exit of eligible rollover funds (ERFs) from the industry by 30 June 2021 and [allow the ATO] to reunite amounts it receives from ERFs with their rightful owners sooner’.
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APRA’s MySuper statistics
On 16 December 2019, APRA released the annual MySuper statistics report which ‘contains detailed profile and structure, financial performance, fees and membership information for all MySuper products’.
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Mid-Year Economic and Fiscal Outlook 2019‑20
On 16 December 2019, the Hon Josh Frydenberg, released the Mid-Year Economic and Fiscal Outlook 2019‑20 (MYEFO).
In relation to superannuation, the MYEFO notes that:
- ‘…superannuation fund taxes have been revised down by $1.4 billion in 2019-20 and $1.6 billion over the four years to 2022-23’;
- The Government’s proposal to facilitate the closure of ERFs ‘is estimated to have a gain to the budget of $143.0 million in fiscal balance terms over the forward estimates period’; and
- The Government’s proposal to extend the Superannuation Guarantee Amnesty period ‘is estimated to have a cost to the budget of $118.2 million in fiscal balance terms over the forward estimates period’.
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Superannuation (Unclaimed Money and Lost Members) Regulations 2019 (Cth)
On 16 December 2019, the Superannuation (Unclaimed Money and Lost Members) Regulations 2019 (Cth) were registered on the Federal Register of Legislation. According to the Explanatory Statement, these regulations ‘remake and improve the operation of the Superannuation (Unclaimed Money and Lost Members) Regulations 1999 before they sunset’.
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Superannuation (Unclaimed Money and Lost Members) and Other Laws (Repeal and Consequential Amendments) Regulations 2019 (Cth)
On 16 December 2019, the Superannuation (Unclaimed Money and Lost Members) and Other Laws (Repeal and Consequential Amendments) Regulations 2019 (Cth) were registered on the Federal Register of Legislation. These regulations ‘repeal the Superannuation (Unclaimed Money and Lost Members) Regulations 1999 and make minor consequential amendments related to the repeal of these regulations’.
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Corporations Amendment (Design and Distribution Obligations) Regulations 2019 (Cth)
On 16 December 2019, the Corporations Amendment (Design and Distribution Obligations) Regulations 2019 (Cth) were registered on the Federal Register of Legislation. According to the Explanatory Statement, these regulations amend the Corporations Regulations 2001 ‘to enhance the [design and distribution] regime by altering the products and persons in relation to which the [design and distribution] regime applies…[and] extend the [design and distribution] regime to additional persons and products and exclude certain persons and products from its operation’.
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Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 (Cth)
On 17 December 2019, the Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 (Cth) were registered on the Federal Register of Legislation. According to the Explanatory Statement, these regulations make ‘technical amendments’ to the Income Tax Assessment Regulations 1997 (Cth) and Superannuation Industry (Supervision) Regulations 1994 (Cth) in relation to transfer balance debits, lifetime defined benefit income streams and life expectancy periods in a leap year.
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This article was written by Natalie Cambrell, Partner, Sanela Osmanovic, Associate and Joseph Cheung, Solicitor.