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  • SISG key messages 21 November 2017

    The Superannuation Industry Stewardship Group (SISG) met on 21 November 2017.

    Welcome and introduction

    James O’Halloran (Deputy Commissioner, ATO, co-chair) conducted an acknowledgement of country.

    David Knox (Senior Partner, Mercer, co-chair) provided members with personal reflections following a recent visit to Europe to consider the retirement income debate and the comparison of Australia’s super system with European systems.

    • Australia has larger lump sum payments with a weaker focus on pensions and annuities.
    • Australia is leading the world in how to convert lump sum benefits into flexible but income-focussed benefits, together with some longevity protection. The development of CIPRs will be watched by others.
    • There are issues with trust in some European systems following the global financial crisis (GFC) which caused pensions to be cut or not indexed.

    Insurance in superannuation

    Jim Minto (Chair, Insurance in Super Working Group) presented an update on the Insurance in Superannuation Working Group (ISWG) initiatives. The working group was established by super associations to focus on resolving elements of life insurance design in Superannuation and creating a code of practice to deliver benefits for members.

    The draft code of practice has been released with the final expected to be issued by mid December and a formal launch to occur next year. The code which will in the first iteration be voluntary, aims among other things to provide standards around claims management and disclosures in a simple format that’s easily understood.

    Members discussed a number of the design features associated with the draft code and acknowledged there will be significant changes to the way funds interact and communicate with members. While there are some more controversial aspects, the code has received wide industry input and it is expected that many of the major funds will sign up to the code.

    New measures update

    Treasury, ASIC and APRA members provided updates in relation to law and policy changes. Each agency discussed the key activities that they are working on with industry discussion about particular issues or questions identified.

    Action: The strategic map will be updated to include key dates discussed during the meeting.

    Productivity commission

    The chair welcomed guest Angela MacRae (Commissioner, Productivity Commission) to provide an update on the Productivity Commission’s review into the efficiency and competitiveness of the superannuation system.

    The review has now progressed to stage 3, using the framework that was developed in stage 1, analysing the data to complete the review and make recommendations.

    Members discussed some of the processes around the collection of data and the consultation process for the draft report.

    The draft report will be issued in January with the final report to government expected by 30 June 2018.

    Representative bodies future priorities for 2017–18

    Dimitri Diamantes (Policy Manager, Financial Planning Association of Australia) presented the Financial Planning Association’s (FPA) key priorities for the 2017–18 year.

    • Focus on leadership and what will be required from financial planners from an education perspective. A legislative framework will be developed and a statutory code of ethics put in place.
    • An awareness campaign and online work will also be undertaken to support the framework and code of ethics, particularly around supporting existing financial advisors to ensure they meet the new professional standards.
    • FPA also intend to focus on an engagement campaign targeting school and university students.
    • There will be a focus on financial technology and leveraging off existing tools to gain efficiencies within the industry. The FPA have released a white paper supporting this work.
    • The FPA are looking to launch a money and life website which aims to provide basic financial concepts for individuals to help increase their financial literacy.

    Action: The FPA to provide a copy of the Fintech white paper to the SISG secretariat for distribution to members: Mapping Fintech to the Financial Planning ProcessExternal Link

    Single Touch Payroll

    John Shepherd (Assistant Commissioner, ATO), and Ian Colhoun (Director, ATO) provided an update on the progress of the implementation of the single touch payroll project.

    Discussion was held around the concepts being considered for employer onboarding and the operational interactions with software developers.

    It was noted that event based reporting will be mandatory from July 2018 for large employers and July 2019 for small employers.

    Consultation on the super choice design has finalised and a summary of feedback has been published. The ATO is undertaking further work to explore opportunities to further support employers and software developers as the design is progressed.

    There were some concerns raised regarding financial literacy of some small businesses and digital accessibility for rural and regional areas. It was noted that the Government has announced a small business digital taskforce which is likely to unpack some of these issues.

    Taxpayer charter review

    Janine Clark (Assistant Commissioner, ATO) provided an update on the actions from the Inspector General of Taxation (IGT) review of the Taxpayer’s Charter. Work is underway to address the five recommendations made by the IGT.

    Members discussed the need to ensure that super is considered equal to tax in the review process.

    Recommendations and outcomes based on all feedback are expected to be finalised by 31 December 2017.

    SISG membership review

    James O’Halloran (Deputy Commissioner, ATO, co-chair) advised members that the ATO will be undertaking the bi-annual review of membership and representation of the SISG. The group acknowledged the unique role of the group to bring together key stakeholders in the superannuation industry, focussed on the common goal to improve the administration of Australia’s superannuation system.

    The proposal for undertaking the membership refresh will be to write to each member reaffirming interest to continue their membership. The ATO will also seek expressions of interests from other associations who may add value to the forum.

    The refresh is important to bring in some different perspectives, however this will be balanced with the need to maintain continuity and ensure key industry groups are represented.

    It is intended the outcomes of the membership review will be finalised prior to Christmas with them taking effect from the first meeting in March 2018.

    Other business

    Members discussed whether there are any opportunities to consider a common and consistent approach to data sharing with regard to data that is sought by the regulators and the format it’s supplied in.

    There are a number of initiatives being considered across government which will consider looking at sharing data between the regulators rather than seek externally and adopting the ‘ask once use many’ approach as well as leveraging of existing technology. However there may be some legislative and privacy barriers that will need to be considered.

    Members acknowledged the importance of addressing these issues and suggested the SISG could potentially be the vehicle to work together to design the future direction of data sharing.

    Forward agenda items

    James O’Halloran (Deputy Commissioner, ATO, co-chair) asked members to consider a forward program of work for future meetings and the option of including topics for discussion by theme to allow for more detailed conversations as well as consider external guests to support the discussions.

    Members agreed the SISG is a unique group that provides a middle ground to have robust strategic conversations across the external super environment and regulatory landscape.

    Wrap up and close

    David Knox (Senior Partner, Mercer, co-chair) thanked members for their valuable contributions and wished members and their families a safe and happy Christmas.

    SISG meeting dates for 2018 are confirmed as follows:

    • Tuesday 6 March in Sydney
    • Tuesday 22 May in Sydney
    • Tuesday 21 August in Melbourne
    • Tuesday 20 November in Melbourne.

    Attendees

    Australian Taxation Office (ATO)

    James O’Halloran, Deputy Commissioner,Superannuation (Co-chair)

    Kate Wilson, A/g Assistant Commissioner, Superannuation

    Sarah Kimmorley, Senior Director, Superannuation

    Tammie Turner, Superannuation (Secretariat)

    Guests

    Jim Minto, Chair, Insurance in Superannuation Working Group

    Angela MacRae, Commissioner, Productivity Commission

    John Shepherd, Assistant Commissioner, Single Touch Payroll

    Ian Colhoun, Director Single Touch Payroll

    Janine Clark, Assistant Commissioner, ATO Corporate

    Treasury

    Robert Jeremenko, Division Head

    Ian Beckett, Principal Advisor

    Australian Prudential Regulation Authority (APRA)

    Carolyn Morris, Senior Policy Manage

    Australian Securities & Investment Commission (ASIC)

    Jane Eccleston, Senior Executive Leader, Investment Managers and Superannuation

    Alex Purvis, Senior Manager

    Australian Chamber of Commerce and Industry (ACCI)

    Dick Grozier, Director Industrial Relations, NSW Business Chamber

    Australian Institute of Superannuation Trustees (AIST)

    Eva Scheerlinck, Chief Executive Officer

    Association of Super Funds Australia (ASFA)

    Glen McCrea, Chief Policy Officer

    Chartered Accountants Australia and New Zealand (CAANZ)

    Tony Negline, Head of Superannuation

    CPA Australia

     

    Paul Drum, Head of Policy

    Financial Services Council (FSC)

    Blake Briggs, Senior Policy Manager

    Financial Planning Association of Australia (FPA)

    Dimitri Diamantes, Policy Manager [for Dante De Gori]

    Industry Super Australia (ISA)

    Michael Fisher, Industry Super Australia [for David Whiteley]

    Law Council of Australia

    Michelle Levy, Partner Allen’s

    Mercer

    David Knox, Senior Partner (Co-Chair)

    SMSF Association (SMSFA)

    John Maroney, CEO

    Apologies

    Australian Bankers Association (ABA)

    Christine Cupitt, Policy Director

    Australian Prudential Regulation Authority (APRA)

    Helen Rowell, Deputy Chairman

    Financial Planning Association of Australia (FPA)

    Dante De Gori, CEO

    Industry Super Australia (ISA)

    David Whiteley, CEO

    Next meeting

    6 March 2018 in Sydney

      Last modified: 18 Jan 2018QC 54383