Welcome and introduction
Dana Fleming, Acting Deputy Commissioner, ATO, opened the meeting with an acknowledgement to country, welcomed members and noted apologies.
Your Future, Your Super
Treasury confirmed key dates associated with the program.
- The Treasury Laws Amendment (Your Future, Your Super) Act 2021 received royal assent on 22 June 2021.
- The ATO launched the Your Super comparison tool on 1 July 2021.
- The ‘stapling service’ has been delayed to 1 November 2021.
- The change to the duties of trustees of superannuation funds to act in the best financial interest of their members will also take effect from 1 July 2021.
- The new super fund underperformance assessment, to be conducted by Australian Prudential Regulation Authority (APRA), will commence from 1 September 2021.
APRA confirmed work is underway on the performance test criteria. APRA has discretion on performance tests and is drafting communication to trustees on this. APRA will speak to individual funds before broader communication is issued.
ATO provided a demonstration of the Your Super Comparison tool which can be accessed via MySuper products or through super on myGov. Performance data that will be included in the September release will be current as at 30 June 2021. Net return data displayed in the tool is not weighted but based on the lifestage of the product. See the definition of lifestage of the product in the Treasury Laws Amendment (Your Future, Your Super) Bill 2021External Link.
The Stapling tool will be available from 1 November 2021. From this date, where employees do not choose a super fund, employers will have to check with the ATO if their employee has an existing super account (known as a 'stapled super fund') to pay the employee's super guarantee into.
The design of the stapling tool incorporates feedback received from the user co-design process. The ATO will offer a bulk solution for onboarding multiple staff. The bulk request solution will only be available for those that on-board large volumes (greater than 100) employees on a regular basis.
The stapling service will be available for tax agents and intermediaries through online services for agents and employers via online services for business.
A communication campaign is scheduled to commence before September to educate employers of their obligations come 1 November 2021. The ATO website has been updated and presentations will be rolled out to other Stewardship groups.
Superannuation Environment and overview
Treasury
The measures announced in the 2021–22 budget are being progressed. The majority of measures have an expected start date of 1 July 2022. It is expected that consultation on draft legislation will commence later this year.
The more flexible superannuation bill received royal assent in June 2021. This gave effect to:
- extending the cut-off age accessing the bring forward non-concessional contributions cap increases from 65 to 67 years
- removal of the excess concessional contributions charge
- re-contribution of COVID-19 early release superannuation amounts without contributions counting towards the non-concessional cap.
Work on the Retirement Income Covenant is being progressed with the intended start date of 1 July 2022. Consultation on the next phase of work will commence shortly.
APRA
APRA will consider the Retirement Income Covenant reform and what that might mean for APRA’s data and prudential framework.
The focus for Your Future, Your Super implementation is:
- Prudential Standard SPS530 (investment governance) – APRA will be consulting on changes previously foreshadowed and review the sole purpose test guidance. Consultation will commence later this year.
- APRA will have a Your Future, Your Super landing page to keep all source material together.
A discussion paper on reviewing Trustee financial resilience will be circulated in coming months to support trustees to confirm their financial resilience.
Prudential Standard SPS250 (Insurance in Superannuation) is also on the list of APRA priorities to close. The final version will issue in the coming months.
ASIC
Advice issues – The Australian Securities and Investments Commission (ASIC) and APRA have issued a joint letter outlining the regulators’ expectations of superannuation trustees in their oversight of financial advice fees charged to members’ accounts. Information about ASIC’s affordable advice project is now available in an infographic.
Licensing update for super trustees – ASIC is in the process of writing to all public offer trustees to update the conditions on their licences.
Consultation on draft regulatory guidance on anti-hawking provisions will commence soon.
ASIC continues to engage with industry around upcoming significant changes to the regulatory obligations for superannuation trustees taking effect from 5 October.
ASIC’s corporate plan is expected to be released in August.
AFCA
An update was provided on Superannuation complaints for 2020–21.
- Australian Financial Complaints Authority (AFCA) received over 5,000 superannuation complaints and resolved more than 6,000 including over-hang from previous year.
- One third of complaints are resolved early in the process, at the registration stage.
- 65% were resolved by agreement or in favour of the complainant.
- The top five issues represented in the complaints in descending order were
- delay in claim handling
- service quality
- denial of claim
- account administration error
- incorrect fees and costs.
For more details on complaints data for 2020–21 (PDF, 708KB)External Link refer to the AFCA website.
The AFCA Engagement Charter (PDF, 280KB)This link will download a file is now available on the AFCA website. It sets out AFCA’s expectations of financial firms and complainants in their interactions with AFCA, as well as what users can expect of AFCA.
AFCA is updating its standard letters to take account the changed timeframes for internal dispute resolution processes under RG 271.
AFCA is undertaking a number of internal projects aimed at improving its services – in particular, a project aimed at strengthening quality assurance processes.
ATO
Communication has been released regarding the delayed index of Transfer Balance Cap. Members will be able to view their personal transfer balance cap from 15 July 2021
The first SMSF with more than four members was registered by the ATO on 6 July.
ALRC Financial Services Legislation Inquiry
The scope of the three-year inquiryExternal Link is to look at simplification of technical aspects of the corporations and financial services legislation. The focus is on the Corporations Act and regulations with the intent of trying to simplify and improve clarity in the law.
The first interim report is due 30 November 2021 and will focus on the formal proposals that relate to appropriate use of definitions in corporations and financial service legislation. The Australian Law Reform Commission (ALRC) is not expecting to ask for submissions until after the first report is made available.
Subsequent reports will be developed on the regulatory design and hierarchy of primary law provision, regulations, class orders and standards. This report is due by 30 September 2022.
A third report focusing on the potential reframing or restructuring of Chapter 7 of the Corporations Act is due by 25 August 2023.
Superannuation Industry Stewardship Group (SISG) members supported the scope of the review, acknowledging that navigating through and addressing overlapping legislation is definitely an acute problem for trustees.
SMSF Rollovers Version 3
The project is bringing SMSFs into the electronic rollovers messaging. Key onboarding resources and weekly updates are published on the SuperStream Rollover v3 page.
The ATO implemented internal system changes as part of the March release and is supporting industry through their system build and test in preparation for the 30 September conformance date.
External testing commenced in June and will be undertaken in two phases.
- Business to business – fund to fund – ATO does not see these transactions but supports industry with testing.
- Government to business, which are interactions between ATO and industry around release authorities.
The first cohort has completed testing and cohort 2 has commenced.
The ATO has developed a range of risk models to review transactions and rollover requests received. A text message/alert is sent out to a member at the point of verification and before the money gets rolled over. This allows the member to take action if required.
Director identification update
The director identification number (director ID) initiative is a project under the Modernising Business Registers program. All directors will be required to apply for a director ID. Government is still to announce transitional arrangements for existing directors to transition over following public consultation earlier this year. It is expected that existing directors under the Corporations Act will have until 30 November 2022 to apply, and new directors will initially have 28 days to obtain a director ID once appointed.
Those that intend to become a director can apply for a director ID up to 12 months prior to appointment.
Director ID will help prevent the use of fictitious director identities on the new registry service. Like a tax file number, this identification number is one for life and individuals must apply for it themselves.
Communication is being developed to support tax agents to communicate obligations with their clients.
Fifty director IDs have been issued to date in a private beta phase one. Phase two of the private beta includes testing the non-digital application process via phone and paper. The project is expecting to enter the public beta later this year.
The director ID project team were invited to come back to the SISG closer to the public beta timeframe which will allow them to share further information about the engagement approach and guidance material.
Further information and updates are available on the Modernising Business Registers page.
Other business
There will be a new incoming chair for SISG – Emma Rosenzweig, Deputy Commissioner, has been appointed to Superannuation and Employer Obligations for the next 3 months.
Members thanked Dana Fleming for her expertise and contribution to the group.
Attendees
Organisation |
Member |
|---|---|
ATO |
Dana Fleming (Co-chair), Superannuation and Employer Obligations |
ATO |
Tracie Crowden, Superannuation and Employer Obligations |
Association of Super Funds Australia |
Glen McCrea |
Australian Financial Complaints Authority |
Heather Gray |
Australian Institute of Superannuation Trustees |
Melissa Birks |
Australian Securities and Investments Commission |
Jane Eccleston |
Business Council of Australia |
Ben Davies |
Chartered Accountants Australia and New Zealand |
Tony Negline |
COTA Australia |
Ian Yates |
Financial Services Council |
Jane Macnamara |
Industry Super Australia |
Thomas McMahon |
Law Council of Australia |
Michelle Levy |
Link Group |
Sue Pearce |
Mercer |
David Knox (Co-chair) |
SMSF Association |
John Maroney |
Super Consumers Australia |
Xavier O’Halloran |
Treasury |
Lynn Kelly |
Guest attendees
Organisation |
Attendee |
|---|---|
ATO |
Belinda Black, Superannuation and Employer Obligations |
ATO |
David Ensbey, Enterprise Solutions and Technology |
ATO |
Eleanor Beer, Australian Business Registry Services |
ATO |
Kylie White, Superannuation and Employer Obligations |
ATO |
Martin Jacobs, Australian Business Registry Services |
Australian Law Reform Commission |
Cindy Davies |
Australian Law Reform Commission |
Micheil Paton |
Australian Law Reform Commission |
Phoebe Tapley |
Australian Law Reform Commission |
William Isdale |
Australian Prudential Regulation Authority |
Carolyn Morris |
Australian Prudential Regulation Authority |
Katrina Ellis |
Australian Securities and Investments Commission |
Alex Purvis |
Treasury |
Ben Dolman |
Apologies
Organisation |
Member |
|---|---|
Australian Institute of Superannuation Trustees |
Eva Scheerlinck |