This week’s Super Alert considers a number of news releases from the regulators such as draft documents from APRA in relation to its new change of control powers and information security guidance, as well as a TPD case.
ATO income stream update
On 20 June 2019, the ATO updated its guidance note to APRA funds called “Starting and stopping a super income stream (pension)”. The note has been updated to add issues that trustees should consider when undertaking these processes.
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ASIC amends Class Order relation to PDS fee disclosure
On 21 June 2019, ASIC advised that it had amended Class Order 14/1252 (Class Order) to make technical amendments to “reflect the [Protecting Your Super Package] ban on exit fees for [superannuation] products by eliminating the line allowing for disclosure of exit fees”.
Please note that the amended version of the Class Order is not currently publicly available, although ASIC has noted that the primary obligation for trustees is that PDSs from 1 July 2019 “do not suggest that exit fees will be charged on superannuation products”.
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NSW Court of Appeal TPD case
On 21 June 2019, the New South Wales Court of Appeal handed down its decision in Newling v Metlife Insurance Limited [2019] NSWCA 149. The case concerned the claim by a member of a superannuation fund for an insured total and permanent disability (TPD) benefit from the fund. The Court of Appeal found for the insurer, holding that it had acted fairly and reasonably in assessing the TPD claim.
The Court held that it was for the insurer to determine the weighting to give to different materials before it. Further, the Court held that it was not unfair or unreasonable for the insurer to prefer the medical opinions it commissioned because the medical opinions provided by the member were reliant on the history provided by her, and also because the surveillance footage cast doubt on her claim to be totally and permanently disabled.
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APRA releases draft application form for new change of control approval powers
On 24 June 2019, APRA released a draft application form and guidance relating to “applications to acquire a controlling stake in [an RSE] license”. APRA approval is required from 5 July 2019 for “any party seeking to acquire greater than a 15 per cent stake in an RSE licensee” as a result of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019.
APRA has explained that it will grant approval if “the revised ownership structure will not impede the ability of the RSE licensee to meet its obligations under the [SIS Act], including by prioritising the best interests of members”.
The consultation period for the application form closes on 5 July 2019.
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APRA’s updated CPG 234 (Information Security) guidance
On 25 June 2019, APRA released the amended and renamed Prudential Practice Guide CPG 234 (Information Security) (CPG 234) following a period of consultation. CPG 234 will assist trustees to understand their obligations contained in the Prudential Standard CPS 234 (Information Security) which comes into effect from 1 July. A letter has also been prepared by APRA to explain its response to the submissions received to the draft CPG 234.
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This alert was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.
| Natalie Cambrell
P: +61 3 8644 3754 E: ncambrell@hwle.com.au |
Damian Tarulli
P: +61 7 3169 4832 E: dtarulli@hwle.com.au |