Superannuation Industry Stewardship Group key messages 15 May 2020

Welcome and introduction

John Ford opened the meeting and welcomed members.

Early release of superannuation (ERS)

David Knox led the discussion on learnings and opportunities from tranche one of the ERS in preparation for tranche two commencing in the new financial year.

The ATO acknowledged its appreciation of the collaboration with industry under very tight timeframes to implement the ERS program.

Members universally congratulated the ATO on the implementation and recognised the contribution of program leads Assistant Commissioners Sonia Corsini and Larissa Evans.

Members discussed the communication messages from regulators and funds as well as managing individuals’ expectations around the ERS. The Australian Prudential Regulation Authority (APRA) have published an infographicExternal Link outlining the process and advised that trustees are processing 96% of payments within five business days.

Members were advised that Indigenous applicants have a dedicated phone line with staff who have undergone culturally appropriate training. The Indigenous Helpline for Aboriginal and Torres Strait Islander peoples, is 13 10 30, opening hours are 8.00am–6.00pm, Monday to Friday.

Superannuation environment and overview

John Ford opened the agenda items with an ATO update.

• The due date to lodge 2020 FBT returns and pay any associated liability for self-preparers and tax agent paper lodgments has been deferred from 21 May 2020 to 25 June 2020.
• The super guarantee amnesty page has been viewed over 60,000 times, with the form downloaded over 14,000 times.
• Cash flow boost has been paid to over 450,000 activity statement lodgers and the total amount paid is over $8 billion.
• Superannuation guarantee compliance remains a priority for the ATO. However, as has always been the case, consideration is given to how we approach the individual circumstances of both the employer and employees. This approach will not change during COVID-19.

Robert Jeremenko provided the Treasury update.

• The Capital gains tax relief for merging funds passed through both houses on 14 May 2020 and will take effect from 1 July 2020.
• The Government introduced a Bill improving flexibility of superannuation for older Australians (relaxing the work test). The measure also includes changes to the age limit for the bring-forward of non-concessional contributions and the age limit for spouse contributions.
• The Retirement Income Review continues to work toward submitting a report to Government. The review is taking a long-term view of the retirement income landscape and will include analysis of the impact of shocks on the system.

Suzanne Smith provided the APRA update.

• APRA’s focus has been on data collection and reporting. The number of funds getting ERS out in 5 days has been pleasing. A second round of data will be released in the week of 18 May in line with the new reporting framework.
• Outside COVID-19, with regards to the prudential framework, only two other work items are ongoing for consultation this year while all others are delayed. SPS 250 insurance in super is ongoing but will not be finalised this year. The sole purpose test guidance is likely to be consulted on in December 2020 and be finalised in 2021.

Jane Eccleston provided the Australian Securities and Investments Commission update.

• Design and Distribution Obligations (DDO) was due to come into force from April 2021 but is now delayed until October 2021.
• Frequently asked questions are to be issued addressing questions if a member goes down to a low or zero super account balance and the insurance impacts.
• A taskforce has been created to look at unlicensed advice.
• There is high interest in the MoneySmart website for ERS. There have been over 195,000 accesses to the page and over 140,000 users.

What does the super industry look like post COVID-19

David Knox led the discussion about how COVID-19 has impacted the super industry. Members discussed effects on regulators, funds, various cohorts of members and retirees.

APRA advised they are examining the foundations of a strong, resilient, effective super system going forward and what the attributes are of funds that have weathered this situation well and why.

Wrap up and close

John Ford thanked the members for their input and noted that more regular and shorter meetings will continue to be the way forward in the current climate.

Attendees

Apologies