- AIST Policy News - 13 Apr 2017
AIST Policy News
AIST Board endorses Governance Code
The AIST Board has now endorsed a final version of AIST’s Governance Code.
AIST member funds will be asked to adopt the Governance Code on a voluntary basis from 1 July, 2017 with mandatory adoption required from 1 July, 2018. AIST would like to thank all the members who provided input and feedback on the Code throughout the consultation process.
Meanwhile, a draft guidance document designed to complement the code is under consultation.
The guidance document has been developed to provide funds with a useful resource to assist in meeting the requirements of AIST’s Governance Code. The guidance itself does not contain any further requirements for funds to meet and merely provides suggestions on how the Code requirements might be achieved and clarifies some areas of the Code that have been raised during our member consultations.
Feedback on the draft guidance document is required by COB Friday 21 April, 2017and can be directed to AIST CEO Eva Scheerlinck at email@example.com.
AIST will shortly commence consultation on the reporting requirements and how fund reporting against the Code will be monitored. Members should expect to hear more in early May.
ATO campaign on super changes
The Australian Tax Office has launched a campaign to communicate with super fund members who may be affected by the super changes that come in to effect from 1 July, 2017.
Members may receive letters, emails or text messages from the ATO outlining key changes to super.
This includes members who:
- have met or are close to meeting their transfer balance cap;
- are under 25 years old and receiving a death benefit income stream;
- have been identified as being in year one or year two of bring forward arrangements and may have their cap decreased;
- are in salary sacrifice arrangements;
- have been identified as reaching their total super balance threshold and need to be advised about the implications of making non-concessional contributions;
- are in receipt of income from a defined benefit income stream and need to be made aware of the transfer balance cap;
- have been contributing greater than $25,000 in concession contributions, and need to be advised of the threshold change;
- have been identified as having a total superannuation balance greater than $1.25 million and need to be advised of the impact of the non-concessional contributions caps.
The ATO believes that this correspondence may mean super funds receive more enquires from members and is advising funds to encourage members to stay up to date on the super changes and how they may be affected.
To help address these enquiries, the ATO has also released a range of super changes Q&As that funds can use to help prepare for general questions from members. These Q&As provide a range of commonly asked questions and proposed answers.
Funds can also direct super fund members to visit ato.gov.au and follow the ATO on Facebook or Twitter.
AIST warns against tapping super to buy homes
Amid reports of a deep split in the Federal Cabinet over a super for housing proposal, AIST has strongly reiterated its concern that allowing first home buyers to tap into their super for a housing deposit would further drive up housing prices and also lead to poorer retirement outcomes.
The proposal, widely reported this week in the media as a possible measure in the upcoming May Federal Budget, could see first home buyers divert several years of super contributions into a home savings account.
Cabinet's expenditure review committe, referred to as the 'razor gang', is meeting today to discuss a range of affordablity options, including the super-for-housing idea.
AIST recently commissioned a report into the impact of declining home ownership on retirement that highlighted several reasons why allowing super to be withdrawn to finance housing is bad policy.
As reported this week in the Australian Financial Review, the AIST research points out that using super to help pay for a deposit could cost the budget millions of dollars and an increasing number of retirees will go onto the age pension later.
The report – authored by independent economist Saul Eslake – also noted that long-standing Federal and state government policies, such as cash grants to first home buyers, and stamp duty concessions for first home buyers, had simply allowed purchasers of housing to pay more for housing than they would have done otherwise.
In a media release also released this week,AIST CEO Eva Scheerlinck noted that allowing first home buyers access to their super defied the Government’s own definition of the purpose of super – which is for super to provide income in retirement to substitute or supplement the Age Pension.
“Australia’s deteriorating housing affordability is a complex problem that requires a credible policy framework rather than short-term, flawed thinking, which could actually make the problem worse,” Ms Scheerlinck said.
On a more positive note, Ms Scheerlinck welcomed reports that the Government was considering a range of measures to improve housing outcomes, including measures to facilitate investment by superannuation funds into the social housing market.
As in previous years, AIST will producing a special report on the Federal Budget that will be emailed direct to members.
Comprehensive Income Products for Retirement (CIPR) consultation extended
The deadline for submissions on the Government’s CIPR discussion paper has been extended to 9 June, 2017.
The discussion paper on CIPR’s (now more commonly referred to as MyRetirement products) explores the key issues of developing a post-retirement framework with a particular interest on the structure and minimum requirement of products, regulating the products, and the offering of these products.
AIST is putting together a submission that emphasises the need for trustees to have the ability to tailor products according to their memberships.
AIST members wishing to provide input should contact AIST Policy and Regulatory Analyst, Richard Webb at firstname.lastname@example.org or the ATO directly.
Important ATO updates for super funds
The Australian Tax Office has released their April Superannuation Communique publication as well as a number of project timelines for key super projects.
The ATO’s April Superannuation Communique includes important updates for super funds on key measures as listed below:
- Keeping your members up to date on super changes
- SuperTICK3 now in use
- SuperMatch 2 performance and SuperMatch decommissioning
- Contributions v2 readiness and testing
- New SuperStream readiness and implementation page
- Division 293 tax – End benefit notice
- Electronic payment variation advice (ePVA)
- Electronically portability form V2
- Decommissioning the super guarantee legacy system
- Monthly super remittance and recovery processing schedule
The ATO has also released a series of timelines on the following areas:
- New measures commencing 1 July
- Changes to Departing Australia Superannuation Payment rates
- New SuperStream services and messaging; and
- Single Touch Payroll.
You can view these timelines - that outline the key project elements and dates - here.
Members wanting to discuss any of these issues can contact AIST Policy and Regulatory Analyst, Richard Webb at email@example.com or the ATO directly.
Report on SG non-compliance delayed again
The Senate Economics References Committee’s report on Superannuation Guarantee non-payment inquiry has again been delayed.
On 1 December 2016, the Senate referred an inquiry into the non-payment of Superannuation Guarantee to the Senate Economics References Committee for inquiry and report.
Originally due to report on 22nd March, 2017, the Committee was then granted two extensions to report by 29th March and then 12 April, 2017.
This has now been extended a third time and the Committee will now report on 2 May, 2017.
In a submission to the inquiry, AIST argued that employer superannuation non-compliance remains a serious problem and an automated and systematic response, coupled with greater resources, is required.
Gender equality & diversity to keynote ACSI annual conference
Former Human Rights Commission Sex Discrimination Commissioner Elizabeth Broderick will deliver the keynote address at the Australian Council of Superannuation Investors (ACSI) 2017 Annual Conference.
ACSI’s annual conference –ESG. Investing for the long term – will look at the big environmental, social and corporate governance issues and risks of 2017.
Other topics being explored include corporate culture and whistleblowing, international trends in environmental and social governance (ESG), climate change and fiduciary duty and what big global changes mean for investors.
The conference is on Thursday May 4 at the Sofitel Melbourne on Collins. Members interested in attending can register here.
ATO reminds former temporary residents to claim super
Super funds can expect an increase in enquiries on departing Australian superannuation payments (DASP) after a communication project by the Australian Tax Office (ATO) last week.
The ATO has sent out approximately 11,000 emails to former temporary residents encouraging them to submit their DASP applications before 1 July, 2017. The emails were sent to temporary residents who had started but not submitted a DASP online application.
From 1 July 2017 former temporary residents who held Working Holiday Maker (WHM) visas will pay a higher tax rate of 65%. You can read more information about the changes to DASP tax rates for working holiday markers here.
The ATO is encouraging all DASP applicants to submit their applications as soon as possible and asking that funds process DASP applications as soon as possible.
For enquiries, please email SuperCRT@ato.gov.au.
ASIC consults on financial services panel
The Australian Securities and Investment Commission (ASIC) is calling for feedback on a proposal to develop and implement a financial services panel.
The panel would create a layer of peer review to ASIC’s administrative decision-making processes and would be responsible for determining whether ASIC should ban individuals from the financial services and credit industries for misconduct.
The panel would comprise financial services and credit industry participants and non-industry
participants (e.g. lawyers or academics) with relevant expertise, and at least one ASIC staff member. The panel would sit alongside ASIC's existing administrative structures and processes.
ASIC is now consulting on:
- how the Panel would enhance the impact of ASIC's administrative decisions;
- the types of matters that would be referred to the Panel; and
- the optimal composition of the Panel.
Submissions are due by 23 May, 2017. Members wishing to discuss can contact AIST Policy and Regulatory Analyst, Richard Webb at firstname.lastname@example.org
Still time to sign up to Mother’s Day Classic
The Women in Super Mother's Day Classic is calling for industry leaders to inspire and engage staff for an important cause that impacts just about every workplace.
An estimated 40 Australian women are diagnosed with breast cancer each day - the more we raise, the faster a cure can be found.
MDC is looking for CEOs and senior leaders of Australian businesses to take up the Corporate Challenge and inspire their organisations to make a difference on Mother's Day.
This year on Sunday, May 14 the Mother’s Day Classic fun walk/run turns 20 years old. As the major fundraiser for the National Breast Cancer Foundation, the MDC has contributed more than $30 million to breast cancer research.
There is no excuse for missing out on the 20th anniversary of this family friendly event.
To enter a team click here and for inspiration, watch this video.
of ACTU marketing officer, Mary Doyle, who has been a long time Mother’s Day Classic supporter, as a volunteer and participant.