Super Alert – 3 April 2020

03 April 2020

Perhaps unsurprisingly, this week’s Super Alert has a COVID-19 theme again. It includes APRA and ASIC’s joint letter to trustees on the impact of COVID-19 and various updates from other regulators responding to COVID-19.

AUSTRAC updates relating to COVID-19

On 27 March 2020, AUSTRAC updated its website in relation to COVID-19. In particular, AUSTRAC announced that it:

  • Proposes to amend the AML/CTF Act to ‘ensure that superannuation funds…will not have to conduct additional customer verification under the AML/CTF regime’ when making payments to members under the early release of super initiative; and
  • Will accept ‘2019 compliance reports [usually due by 31 March 2020] until 30 June 2020, without risk of compliance action’.

Please click here and here to read more.

House of Representatives Standing Committee on Economics – Liquidity issues

On 27 March 2020, the House of Representatives Standing Committee on Economics issued a media release that the Committee is ‘reserving its right to hold a hearing’ about superannuation liquidity issues.

The background for this statement is that ‘[in] the last round of hearings the superannuation sector dismissed the committee’s concerns about liquidity associated with the structure of their funds… [but] super funds are now claiming liquidity issues which is inconsistent with the spirit of evidence they had previously submitted…’.

Please click here to read more.

Assistant Minister for Superannuation’s speech – Early access to superannuation

On 30 March 2020, Senator Jane Hume, published a recent speech that she gave where she:

  • Acknowledged that the ATO is solely responsible for administering the early release of superannuation under the COVID-19 stimulus package; and
  • Warned that ‘[a]ny fund who refuses a member access to their money after an ATO determination is essentially admitting that their investment governance was cavalier or their systems inadequate…[and if it] reveals a super fund has been managed in a way that would prevent members accessing their money promptly, APRA’s directions powers – especially sections 131D and 133 of the SIS Act…gives APRA new teeth that may well be tested’.

Please click here to read more.

ATO updates Superannuation Changes Industry roadmap

On 31 March 2020, the ATO updated its Superannuation Changes Industry roadmap, which shows an overview of the changes impacting the superannuation industry. The information in the roadmap ‘details the changes affecting the super industry up until the end of June 2021’.

Please click here to read more.

APRA and ASIC issue joint letter to trustees on COVID-19

On 1 April 2020, APRA and ASIC issued a joint letter to trustees on the impact of COVID-19, as well as a set of frequently asked questions. The letter provides guidance on topics such as liquidity, communication, insurance, scams and fraud.

Key comments in the letter include:

  • Although current circumstances are ‘unusual and challenging…[w]hat does not change is [trustees’] duty to comply with the law, including the duty to act in the best interests of their members’;
  •  ‘…monitoring liquidity to ensure funds retain the means to fulfil their payment obligations, including the early release of superannuation payments recently announced by the Government…must necessarily also be a top priority for trustees…’;
  • ‘…trustees should…understand how members’ insurance may be affected by economic conditions and public health restrictions – for example, policy clauses relating to employment, work hours, and exclusions (such as pandemic clauses)’; and
  • ‘…unless APRA or ASIC has granted specific relief, trustees’ legal, regulatory and reporting obligations remain unchanged’ (for example no relief has been granted for the member outcomes assessment or the CPS 234 review requirements applying to service providers from 1 July 2020).

Please click herehere and here to read more.

ATO updates – COVID-19 early release of superannuation

On 1 April 2020, the ATO issued CRT Alert 005/2020 (‘Coronavirus early release of super – design and implementation information’) and CRT Alert 006/2020 (‘MATS and COVID-19 early release of super’). These new CRT Alerts follow the ATO’s CRT Alert 004/2020 earlier in the week (‘COVID-19 economic response package – early release of super’).

These three alerts provide guidance to superannuation funds in relation to the administrative process that will be implemented for the early release of super due to COVID-19.

Please click herehere and here to read more.

This article was written by Natalie Cambrell, Partner, Sanela Osmanovic, Senior Associate and Joseph Cheung, Solicitor.


Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us