This week’s Super Alert contains a number of developments including release of guidance on the Modern Slavery Act 2018 (Cth), the announcement of another retirement income system review and draft Superannuation (Unclaimed Money and Lost Members) Regulations 2019.
Commonwealth Modern Slavery guidance for reporting entities
On 26 September 2019, the Department of Home Affairs released a document entitled “Commonwealth Modern Slavery Act 2018 Guidance for Reporting Entities” (Guide) to assist entities which need to prepare a Modern Slavery Statement.
Under the Modern Slavery Act 2018 (Cth), “certain large entities must publish annual Modern Slavery Statements … describing their actions to assess and address modern slavery risks. The reporting requirement applies to commercial and not for profit entities with annual consolidated revenue of at least AU$100 million”.
The Guide is lengthy, and among many aspects notes:
- “The reporting requirement aims to support the Australian business community to identify and address their modern slavery risks and maintain responsible and transparent supply chains.”
- “The supply chains of a superannuation fund or fund manager include its external investment managers, who provide a service by managing its portfolios.”
Please click here to read more.
ATO reminder of reporting obligations
On 26 September 2019, the ATO issued a reminder to APRA-regulated funds about their reporting obligations. These include:
- Annual amounts and balance reporting – Funds have “an obligation to report … the 30 June account balance amounts and any applicable phase values, notional taxed contributions and defined benefit contributions, on or before 31 October 2019 for any account that is open as at 30 June 2019”;
- Unclaimed super money reporting obligations – Funds “are required to report and pay … unclaimed super monies … [and] inactive low-balance accounts … for the statement period 1 January to 30 June 2019 on or before 31 October 2019”; and
- Lost member reporting – Funds “are required to report the lost status of [members] at a minimum biannually”.
Please click here to read more.
ASIC’s existing policy in relation to internal dispute resolution continued until 30 June 2020
On 26 September 2019, the ASIC Corporations and Credit (Internal Dispute Resolution—Transitional) Instrument 2019/965 (Principal Instrument) and ASIC Corporations and Credit (Repeal) Instrument 2019/966 (Repeal Instrument) were registered on the Federal Register of Legislation.
According to the Explanatory Statement, the purpose of the Repeal Instrument is to repeal ASIC Class Orders CO 09/339, CO 10/250 and CO 10/517 and retain “the existing policy through a single instrument”, being the Principal Instrument, until 30 June 2020.
The Principal Instrument ensures the continuation of “ASIC’s existing policy in relation to approved standards and requirements for an internal dispute resolution procedure, pending the finalisation of ASIC’s proposed new policy on internal dispute resolution”.
Please click here and here to read more.
Government announces review of the retirement income system
On 27 September 2019, the Treasurer issued a media release announcing that the Government was “commissioning an independent review of the retirement income system” which “will be conducted by an independent three person panel”.
The review’s terms of reference were released with the announcement and explain that the review will look at the three pillars of the retirement income system, being the age pension, compulsory superannuation and voluntary savings (such as home ownership).
The Treasury has opened a consultation page and is expected to release a consultation paper in November 2019 and provide the final report to Government by June 2020.
Please click here and here to read more.
Lost and unclaimed money draft regulations released for consultation
On 30 September 2019, the Treasury released for consultation the draft Superannuation (Unclaimed Money and Lost Members) Regulations 2019.
According to the Treasury, the “existing Superannuation (Unclaimed Money and Lost Members) Regulations 1999 (Cth) are scheduled to sunset on 1 April 2020″ and the draft regulations “are being made to ensure the ongoing operation of the lost and unclaimed money regime for certain superannuation amounts”.
A key change includes “prescribing conditions of release whereby an account will no longer be considered an inactive low balance account if met by a member”.
The consultation period ends on 25 October 2019.
Please click here to read more.
ATO issues guidance for funds in respect of pension tax bonuses
On 2 October 2019, the ATO issued Practical Compliance Guideline PCG 2019/7 entitled “Compliance approach for large APRA-regulated superannuation funds in respect of pension tax bonuses not included in members’ opening account balances on commencement of a pension” (PCG). As referred to in our Super Alert of 19 July 2019, the ATO took submissions from industry in relation to the draft from of the guidance material.
The PCG “provides a transitional compliance approach for large [APRA] regulated superannuation funds that provide a pension tax bonus to members where the superannuation funds are facing practical difficulties in complying with certain legislative requirements”.
Please click here to read more.
PMIF Bill receives Royal Assent
On 2 October 2019, the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 (Cth) received Royal Assent as Act No. 79 of 2019. As referred to in previous Super Alerts, the Act makes insurance in superannuation opt-in only for under 25s and low account balance members (unless a dangerous occupation exemption applies).
Please click here to read more.
ATO updates industry roadmap
On 2 October 2019, the ATO released an updated version of its Superannuation Changes Industry roadmap, which “is an overview of the changes impacting the superannuation industry” and “details the changes affecting the super industry up until the end of December 2020”.
Please click here to read more.
ASIC releases report on director and officer oversight of non-financial risk
On 2 October 2019, ASIC released a report entitled “Corporate Governance Taskforce: Director and officer oversight of non-financial risk report” (Report). In his speech to launch the Report, ASIC Chair James Shipton said: “Boards cannot afford to ignore the oversight of non-financial risks … If not well managed, non-financial risks carry very real financial implications for companies, their investors and customers”.
Please click here to read more.
This alert was written by Natalie Cambrell, Partner, Sanela Osmanovic, Associate and Joseph Cheung, Solicitor.