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  • SISG key messages 22 August 2017

    The Superannuation Industry Stewardship Group (SISG) met in Melbourne on 22 August 2017.

    Welcome and introduction

    James O’Halloran welcomed members to the SISG. Apologies and changes to the SISG membership were noted.

    Superannuation changes

    James O’Halloran led a discussion on the remaining work associated with implementation of new measures, including the 2016 budget measures and the implementation of the government’s housing measures announced in the 2017-18 Federal budget. A number of other changes were discussed.

    For the 2016 budget measures, it was noted the positive partnership with government and industry to achieve the milestones associated with the changes in the required timeframes. In relation to event based reporting for APRA-regulated funds, members acknowledge there are some small issues to iron out with event based reporting requirements. The ATO will continue to work with industry to address these issues.

    The ATO is continuing to review guidance material to ensure any updates necessary are included.

    Members were invited to raise any concerns or issues relating to the implementation of the 2016 budget measures they felt required further clarification.

    It was noted the ATO is currently undergoing consultation with industry on the proposed 2017 budget measures for the Downsizing and First home super savers and is well placed to have the measures operational as soon as possible.

    Improving transparency and accountability for the super system

    Ian Beckett from Treasury and Helen Rowell from APRA led a discussion on the Government’s Exposure draft bill to improve accountability and member outcomes in superannuation.

    The key elements of this Exposure draft bill include:

    Stronger regulation of MySuper products, including replacing the current scale test with an outcomes test that requires trustees to determine annually that their product promotes the financial interests of members.

    Introduction of annual member meetings and changes to the superannuation director penalty regime.

    Stronger APRA powers, including a general directions power; power to make expense reporting standards and power to approve changes in the ownership and control of RSE licensees.

    Consultation on the Exposure draft bill has recently closed. Treasury is reviewing the submissions and expects some minor refinements to the measures in the Exposure draft bill.

    There was discussion about the policy settings for APRA and early indications on how they would be administered, as well as key issues for industry to be considered in policy and administrative design.

    SMSFA Global centre of excellence

    John Maroney from the SMSF Association provided an overview of the SMSFA’s Global centre of excellence for Retirement savings initiative.

    The initiative will look at key areas in the retirement savings market with a broad focus on financial and non-financial issues.

    The expected benefits of the research will include increased awareness of key issues related to retirement design and operation in other countries, and the improved efficiency and effectiveness of the public policy and design features of the Australian superannuation system, with a particular focus on the SMSF sector.

    It will aim to make it easier for industry to engage around areas of research and access to data on topics of superannuation and financial services more broadly.

    Members noted duplication of research effort across multiple organisations is a problem area and there is a need to look for opportunities to share this information.

    It was suggested there needs to be a more coordinated approach to understanding the industry wide research activities and that the SISG could potentially be the vehicle to bring this view together.

    Representative bodies future priorities for 2017–18

    Glen McCrea presented ASFA’s key priorities for the 2017–18 year.

    • Focus on government priorities.
    • Understanding the impact of regulation on industry and what it means from an efficiency perspective.
    • Housing affordability.
    • Technological enhancements and innovation.
    • How the labour force has changed and the impacts to superannuation.

    Michael Davison presented CPA’s key priorities for the 2017–18 year.

    • CPA are expecting a new CEO, however won’t be appointed until after the new board is elected in October.
    • Current focus areas for CPA include:
      • continue acting for members
      • reporting and BEPS
      • Hong Kong tax reform
      • United Arab Emirates introduction of Value added tax
      • IGOT
      • Black economy
      • discretionary trust announcements from the labour party and where that might go
      • ethics and governance.
       
    • CPA Australia has a long tradition with advocacy in the retirement savings space, previously looking at adequacy and household savings and super.
    • Priorities for the next few months:
      • professional standards for financial advisers
      • impacts on 1 July superannuation changes
      • the transition to a retirement income system.
       

    Single Touch Payroll

    John Shepherd and Ian Colhoun from the ATO provided an update on the outcomes and next steps from the consultation paper to support the online design for choice of fund.

    Discussion was held around the design principles to enhance the employee commencement process and the proposed amendments that are being considered. Some clarification on the scope of the design principles was sought form members.

    The ATO is looking to form a focus group with industry representation to ensure a holistic view of the end to end process for the employer group.

    Over the coming months the ATO will continue to work with industry under the Single Touch Payroll consultation framework, to consider the feedback in forming a design for the employee commencement service with the first iteration scheduled for March 2018.

    Event based reporting

    Jason Lucchese from the ATO presented an overview of the proposed fund reporting redesign.

    Key points to note include:

    The ATO has recently undertaken consultation with APRA funds in the shift toward event based reporting.

    The fundamental change is shifting the current Member contributions statement (MCS) annual reporting event to more real time reporting, in support of the reporting requirements under the Budget 2016 reform.

    There was discussion about the practicalities of implementing the new reporting requirements to allow for amendments and the flexibility required to meet future government policy requirements.

    Next steps will involve broad industry consultation on the draft detailed design which is expected in September 2017.

    Other business

    Members were presented with the strategic map which provides a view of all the key changes that will impact the superannuation industry in the year ahead.

    Discussion was held around the purpose and intent of the document.

    Members agreed that it is a useful tool, however improvements could be made to display all initiatives that are underway in the public arena, including consultation activities that are contributing to the large scale changes.

    This will improve co-ordination and clarity for members around the potential impacts to the superannuation industry.

    It was noted there needs to be a balance of including what is in scope and not to over engineer that it loses sight of the key impacts.

    In closing, members considered a number of agenda topics for future meetings as part of the forward program of work. These included:

    • the new payment platform (NPP)
    • productivity commission stage 3 review update, including next steps and clarity of timeframes
    • CIPRS (MyRetirement) update from Treasury
    • insurance in superannuation.

    Co-Chair David Knox thanked members for their valuable contributions.

    Next meeting

    Tuesday 21 November 2017 in Sydney.

    Action items

    The ATO to work in partnership with the other regulator members to make amendments to the strategic map to include indicative and legislative timeframes and what is on the agenda. Once updated further consideration needs to be made as to the possible circulation of the map.

    Attendees

    Australian Taxation Office (ATO)

    James O’Halloran, Deputy Commissioner, Superannuation (Chair)

    Kate Wilson, A/g Assistant Commissioner, Superannuation

    Tamara Linehan, Superannuation

    Tammie Turner, Superannuation (Secretariat)

    Guests (ATO)

    John Shepherd, Assistant Commissioner, Single Touch Payroll

    Ian Colhoun, Director Single Touch Payroll

    Jason Lucchese, Assistant Commissioner SuperStream Delivery

    Treasury

    Robert Jeremenko

    Ian Beckett

    Australian Prudential Regulation Authority (APRA)

    Helen Rowell

    Carolyn Morris

    Australian Securities & Investment Commission (ASIC)

    Ged Fitzpatrick

    Alex Purvis

    Australian Bankers Association (ABA)

    Christine Cupritt

    Australian Chamber of Commerce and Industry (ACCI)

    Dick Grozier

    Australian Institute of Superannuation Trustees (AIST)

    Eva Scheerlinck

    Association of Super Funds Australia (ASFA)

    Glen McCrea

    CPA Australia

    Michael Davison

    Financial Services Council (FSC)

    Blake Briggs

    Financial Planning Association of Australia (FPA)

    Dimitri Diamantes

    Industry Super Australia (ISA)

    Michael Fisher

    Law Council of Australia

    Heather Gray

    Mercer

    David Knox (Chair)

    SMSF Association (SMSFA)

    John Maroney

    Apologies

    Australian Bankers' Association (ABA)

    Diane Tate

    Financial Planning Association of Australia (FPA)

    Dante De Gori

    Industry Super Australia (ISA)

    David Whiteley

    Chartered Accountants Australia and New Zealand (CAANZ)

    Tony Negline

    CPA Australia

    Paul Drum

    Law Council of Australia

    Michelle Levy

      Last modified: 12 Oct 2017QC 53498