Super Alert – 8 March 2019

This week’s Super Alert covers APRA’s policy priorities for 2019, Treasury’s consultation paper for insurance claims handling changes and the ATO’s superannuation rates and thresholds for 2019/20.

APRA’s policy priorities for 2019 

On 28 February 2019, APRA released an information paper which sets out “APRA’s policy agenda for the next 12 to 18 months”. In terms of the superannuation agenda, the following matters have been highlighted by APRA:

• “Implementation work relating to the new member outcomes prudential requirements (SPS 515 and related changes to existing prudential standards), including addressing relevant legislative changes;
• Finalising APRA’s post-implementation review of the superannuation prudential framework and developing proposals for addressing identified areas where the prudential framework could be improved;
• Developing enhancements to APRA’s data collection; and
• Working with the Government and ASIC to implement recommendations arising out of the Royal Commission in relation to superannuation, including extension of the BEAR”.

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Consultation paper released for insurance claims handling

On 1 March 2019, the Treasury released a consultation paper for comment in relation to “recommendations made by the Financial Services Royal Commission’s final report to remove the exclusion of insurance claims handling from the definition of ‘financial service’”.

The consultation paper notes that the change would apply to life and general insurance claims and could be effected by removing regulation 7.1.33 from the Corporations Regulations 2001 (Cth) and using “existing legislative powers to define the activity of handling or settling an insurance claim as a ‘financial service’ for the purposes of the Corporations Act”. One of the questions posed in the consultation paper is: ‘Who would be covered under the definition of ‘handling or settling insurance claims’, in particular whether this would apply to superannuation trustees’?

Submissions on the consultation paper close on 29 March 2019.

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SPS410 MySuper transition revoked

On 1 March 2019, the Superannuation (prudential standard) determination No. 9 of 2012 (which includes Prudential Standard SPS 410 MySuper Transition) was revoked. According to the Explanatory Statement for Superannuation (prudential standard) determination No.1 of 2019, as the transition period for trustees to attribute accrued default amounts to a MySuper product ended on 1 July 2017, SPS 410 is now redundant.

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Superannuation Bills received Royal Assent

On 1 March 2019, the following superannuation Bills received Royal Assent:

• Treasury Laws Amendment (2019 Measures No. 4) Bill 2018, which is now Act No. 8 of 2019; and
• Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018, which is now Act No. 5 of 2019.

Further information about these two Bills is available in our Super Alerts – 15 February 2019 and 25 February 2019 publications.

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2019/20 ATO superannuation rates and thresholds

On 4 March 2019, the ATO released updated superannuation rates and thresholds for the 2019/20 financial year. The concessional contributions cap will remain at $25,000, the non-concessional contributions cap will remain at $100,000 and the $1.6 million transfer balance cap will also not increase. However, other rates and thresholds have been indexed according to AWOTE.

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This article was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.