The highlights of this week’s Super Alert include the passage of the SG amnesty Bill by both houses and APRA’s plans to develop new a new prudential guide on climate change financial risk.
SG Amnesty Bill passes both Houses
On 24 February 2020, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 passed both Houses and now awaits Royal Assent.
As mentioned in our Super Alert of 6 December 2019, the Bill proposes to introduce the superannuation guarantee amnesty for employers to encourage self-correction of historical superannuation guarantee non-compliance.
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ATO’s update on payment of unclaimed super for deceased members
On 24 February 2020, the ATO updated its website to provide information to trustees in relation to the payment of unclaimed super money for a person who has died. In particular, because such applications are sensitive, the ATO requests trustees to ‘provide the most appropriate contact email address for [the ATO] to send [its] information request’ and to ‘respond to any requests received with priority’.
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APRA’s plans to develop new PPG on climate change financial risk and to update SPG 530 Investment Governance
On 24 February 2020, APRA published a letter to all APRA-regulated entities outlining its plans to:
- ‘Develop and consult on a climate change financial risk prudential practice guide (PPG)…[to] set out APRA’s views on better practice and outline prudent practices in this area’. The PPG will cover ‘areas relevant to the prudent management of climate change financial risks,… including aspects of governance, strategy, risk management, metrics and disclosure’;
- ‘Consult on the draft PPG in mid-2020 and, subject to feedback, will seek to publish final guidance before the end of the year’; and
- ‘Update Prudential Practice Guide SPG 530 Investment Governance (SPG 530)…[and] will consult on specific changes to Prudential Standard SPS 530 Investment Governance and SPG 530 around the middle of the year’.
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APRA’s release of superannuation statistics for December 2019 quarter
On 25 February 2020, APRA released its Quarterly Superannuation Performance publication and Quarterly MySuper Statistics report for the December 2019 quarter. Highlights include:
- ‘Superannuation assets totalled $3.0 trillion at the end of the December 2019 quarter. Over the 12 months from December 2018 there was a 13.0 per cent increase in total superannuation assets.’;
- ‘Total assets in MySuper products were $802.1 billion at the end of the December 2019 quarter. Over the 12 months from December 2018 there was a 19.6 percent in total assets in MySuper products.’; and
- ‘The annual industry-wide rate of return (ROR) for entities with more than four members for the year ending December 2019 was 13.8 per cent. The five year average annualised ROR to December 2019 was 7.1 per cent.’
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ASIC’s update on enforcement and regulatory work since September 2019
On 26 February 2020, ASIC provided an update on its enforcement and regulatory work for the six-month period from September 2019 to February 2020. Some of this work included:
- ‘Operationalising and expanding [ASIC’s] Office of Enforcement’;
- Continuing ‘to emphasise the need for industry to focus on consumer outcomes in relation to insurance in superannuation’;
- ‘Prioritising misconduct related to superannuation, and…using persistent underperformance as a key indicator to help… identify misconduct’; and
- ‘Continuing to implement and use ASIC’s new regulatory powers to identify and address misconduct and poor consumer outcomes’.
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This article was written by Natalie Cambrell, Partner, Sanela Osmanovic, Associate and Joseph Cheung, Solicitor.