- AIST Policy News - 21 June 2018
AIST Policy News - 21 June 2018
Bill to address balance erosion introduced to Parliament
The Government has introduced its “Protecting Your Superannuation” package into Parliament today. The Bill contains a range of measures intended to protect members from account balance erosion.
The Bill introduced by the Minister for Revenue and Financial Services, Ms. Kelly O’Dwyer, today prevents funds from charging fees exceeding 3% of account balances where the balance is less than $6,000 and prohibits exit fees on all accounts.
It also prevents funds from providing opt out insurance to new members aged under 25 years, members with balances below $6,000 and any members with inactive accounts, unless a member has directed otherwise. Funds would still be able to offer opt in insurance for these members.
The Bill also requires the transfer of balances below $6,000 to the ATO if an account has been inactive for a continuous period of 13 months. The account will not be transferred if the member has chosen to maintain insurance or if the existing insurance cover has not ceased.
Details of the Bill are similar to the consultation draft circulated in May, although there are some slight amendments extending the grounds for exclusion from the measures. AIST made a submission on the draft, and a copy can be read here.
The Bill, explanatory material and second reading speeches can be read here.
For further information or to provide feedback, please contact AIST’s Senior Policy Manager David Haynes at email@example.com
Royal Commission Background Paper examines superannuation reforms
Industry reforms that AIST played a major role in were examined by the Royal Commission in their Background Paper on Aboriginal and Torres Strait Islander consumers of financial products.
The paper explored the work of the Indigenous Superannuation Working Group, it canvassed the group’s Terms of Reference and engagement with AUSTRAC to develop guidelines on Aboriginal and Torres Strait Islander identification.
It also noted that the Insurance in Superannuation Code recognises the need to support vulnerable consumers, including Aboriginal and Torres Strait Islander peoples.
Round four of the hearings, that examine consumer experiences with financial services entities in regional and remote communities, commences on Monday 25 June 2018.
AIST Governance Code reporting period commencement
On 1 July 2018 the AIST Governance Code comes into effect and the first reporting period commences.
During the first compliance period, commencing 1 July 2018, code signatories are expected to start moving towards compliance. During this period, signatories are encouraged to monitor and record their performance against each of the 21 requirements to assist them in developing their first compliance reports, which are due on 30 September 2019.
To help signatories in complying with the Governance Code, AIST has developed a suite of resources that can be accessed on the AIST website. The resources include a frequently asked questions document, which addresses several reporting related issues.
If you have any questions, please contact Jake Sims, Policy & Regulatory Analyst, on (03) 8677 3855 or at firstname.lastname@example.org
Victims of crime compensation
In a submission to Treasury AIST supported a proposal to allow victims of crime to access a perpetrator’s superannuation where voluntary contributions have been made to shield assets.
In addition to supporting the proposal to allow victims access to ‘claw back’ contributions made by criminals to shield assets, we noted that several additional criteria must also be satisfied before access is permitted. It is inappropriate for the retirement savings to be used by criminals to avoid compensating victims of crime.
Further, AIST did not support the proposal for victims to be given ‘broader access’ to a perpetrators superannuation because of the complexity, cost, inefficiencies and difficulty associated with implementing and administering such a scheme.
Senate committee recommends passing unpaid SG and SG amnesty bills
In separate inquiries, the Senate Economics Legislation Committee has recommended passing Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 (the “SG Integrity Bill”) and Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill (the “Tax Integrity Bill”) 2018.
The SG Integrity Bill contains new measures:
- Granting the ATO new directions and penalty powers where employers do not pay SG
- implement Single Touch Payroll for small business
- pre-filling of tax and superannuation information on new employee online forms
The report recommending the SG Integrity Bill to be passed was handed down on Wednesday of last week. Additional comments were provided by Labor and the Greens echoing AIST’s submission, which pointed out that the measures could have gone further.
The Tax Integrity Bill, containing measures aimed at ensuring the arms-length income and limited recourse borrowing rules cannot be used to game contribution limits was also recommended to be passed. Labor’s dissenting report recommends that the bill be amended to remove an additional measure, introduced into the bill to the surprise of the industry on 23 May 2018 when the bill was introduced to Parliament, which proposes a 12-month amnesty on businesses with outstanding SG contributions.
Both bills are still presently in front of the House of Representatives.
Early release of superannuation benefits
From 1 July 2018, responsibility for the administration of the early release of superannuation benefits on compassionate grounds will be transferred from the Department of Human Services (DHS) to the Australian Taxation Office (ATO).
In several submissions to Treasury, AIST requested that the compassionate grounds administration be centralised in order to promote fairness, administrative efficiency and to make the process easier for members to manage.
We therefore welcome and support the transfer of the responsibility to the ATO.
Superannuation Response Group call for expressions of interest by Friday 6 July
The ATO is calling for expressions of interest from superannuation industry representatives to be part of the Superannuation Industry Response Group. Following the successful Operation Melbourne simulation that was run at the end of 2017 one of the recommendations was to review the current Industry response group membership to ensure that it had the right levels of representation.
Purpose of the Superannuation Response Group
Members of the Group will provide advice to the ATO on how to minimise the impact to the superannuation industry when its information technology systems supporting SuperStream are not operating as expected.
Specifically, members of the Group will advise the ATO on:
- How best to contain the impacts on the industry when the ATO’s information technology systems are not operating as expected;
- Identify options to maintain operations where possible
- Contingency plans
- The best way to resume services to normal operations
- Key communications and stakeholders
Members will need to be willing to assist the ATO at short notice by attending meetings. Meeting notification will be by both email and text message.
Members are expected to provide advice and support to the ATO so the ATO can make the best decisions possible.
The ATO will formally communicate outcomes from the Superannuation Response Group meetings to the entire superannuation industry – members of the Superannuation Response Group are not expected to fulfil any formal communications role.
Please send through your nomination by 6 July 2018 along with a short support statement to SuperStreamGovernance@ato.gov.au.
After the nomination process has closed, the ATO will select a small, diverse, cross-section of the superannuation industry, including fund trustees, gateways, superannuation administrators and other interested parties.
All expressions of interest will be advised on the outcome.
AFCA appoints David Locke as CEO and Chief Ombudsman
With AFCA set to go live from 1 November 2018, AFCA Chair, Helen Coonan, has announced the appointment of David Locke as the CEO and Chief Ombudsman of the newly created complaints body.
Mr Locke has considerable experience in the charity and not-for-profit space. He is currently the Assistant Commissioner, Charity Services at the Australian Charities and Not-for-Profits Commission, which regulates Australia’s 55,000 charities.
He begins his position with AFCA from June 25.
In announcing Mr Locke’s appointment, Ms Coonan also thanked the outgoing Chief Ombudsman, Shane Tregillis, for his contributions over seven years in the role.
Big Super Day Out seeking volunteers
AIST and First Nations Foundation are seeking volunteers to help members of the Indigenous community sort out their super at the Big Super Day Out events in Brisbane and Cairns.
The Big Super Day Out – organised by AIST’s charity partner First Nations Foundation – will be a fun day including entertainment, giveaways, prizes and is your opportunity to help the Indigenous community better engage with the super system.
What we need:
- RG146 compliant advisers comfortable with navigating the myGov website and providing general advice if necessary.
- Passionate volunteers from the super industry happy to assist with ad-hoc duties including collecting data, directing foot traffic, and more.
- Volunteers must be available on Friday 6th July 2018 in either the Brisbane or Cairns locations for the shift times specified below.
- BSDO sponsor organisations have guaranteed allocated volunteer positions based on their sponsorship agreements.
- Please note every year we are oversubscribed so don’t wait!
FRIDAY 6 JULY 2018- FRIDAY IN THE PARK NAIDOC- CAIRNS
Fogarty Park, The Esplanade- Cairns 9:30-4:00
FRIDAY 13 JULY 2018- MUSGRAVE PARK FAMILY FUN DAY- BRISBANE
Musgrave Park- South Brisbane 8:30-3:30
Interested? Contact First Nations Foundation ASAP by emailing email@example.com For queries- call Jordie on 0433 249 477