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The House of Representatives Standing Committee on Economics has formally announced today that it will scrutinise the superannuation sector as part of its ongoing review of the four major banks and other financial institutions.
A total of 11 super entities, including eight super funds, are listed to appear before the Committee hearings to be held over two days in Canberra on 21 and 22 November. The public hearing dates for the banking sector are 8 and 15 November.
The committee’s examination of the groups will include monitoring the sector’s progress on implementing relevant recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Australian Securities Investment Commission has put the super industry on notice that the delivery of insurance to fund members must be “significantly improved”, with the regulator recommending changes to the Voluntary Insurance in Super Code.
In a letter to AIST and the other owners of the Code, ASIC raises concerns about the “pace, intensity and form” of trustees’ adoption of the Code.
ASIC’s letter recommends wide-ranging improvements to the Code, which include:
With the implementation of recent insurance in super law changes, the Code owners had already commenced the process of aligning the Code with the changes. A Code review committee will be meeting shortly to progress the alignment and consider ASIC’s letter.
ASIC has also flagged that it will be releasing a report on the industry’s implementation of the Code that will include a list of "laggards and leaders".
The deadline for all funds to implement the Code remains at June 2021.
For further information, please contact AIST senior policy manager, David Haynes, at firstname.lastname@example.org.
AIST has recommended that a Senate Committee reject the Government’s Bill to provide a Super Guarantee amnesty of two years for employers who have cheated the system.
AIST’s submission to the Senate Standing Committee on Economics, argues that a SG amnesty would be neither well-targeted nor effective.
The Bill, which has been reintroduced to Parliament by the Morrison Government post-Federal election, provides a period of two years for employers to disclose any theft of superannuation for which they can then avoid any kind of sanction.
AIST CEO Eva Scheerlinck said letting employers off the hook for unpaid super sent the wrong message.
“Fundamentally, super theft should be punished not rewarded. Government support should be provided to the majority of employers that meet their SG obligations and are good corporate citizens.”
AIST’s submission points to a body of international evidence showing that amnesties do not work and can even exacerbate the problem as previously honest citizens reduce their compliance in anticipation of another, future amnesty.
The Senate Committee is due to release its report ahead of the Parliament sittings resuming in November.
A review into financial counselling in Australia has recommended increased funding; a peak body to oversee the national financial counselling effort; and better use of data to make services more effective.
The review followed comments made by Commissioner Hayne in the final report of the Financial Services Royal Commission about the need for better funding sources for financial counselling and community legal services.
The review provides much needed recognition of the important work that financial counsellors do in assisting Australians to navigate issues and challenges within the financial system.
AIST CEO Eva Scheerlinck said the contribution of financial counsellors to improving financial outcomes for Australians had long been undervalued.
“Following the Financial Services Royal Commission, where many disingenuous financial services product providers were exposed for targeting vulnerable consumers, it is vital that the services of financial counsellors remain available and that their numbers grow along with community needs,” she said.
Improved funding for financial counsellors will particularly improve the experience of Indigenous Australians in the superannuation system, who face a number of barriers in accessing services such as remote location, lack of cultural awareness, and lack of financial literacy.
Some financial counsellors based in Indigenous communities have previously reported that 90% of their time is taken up with requests for help regarding superannuation.
The first report from Climate Action 100+ has recognised the achievements made by the collective so far but notes more needs to be done by the world’s largest corporate entities to cut carbon emissions.
Climate Action 100+ is a five‑year initiative that seeks to engage with the world’s largest corporate greenhouse gas emitters in order to achieve targets set in the Paris Agreement.
Of the 28 Australian signatories to the initiative, 12 are AIST member funds. In total, the group has over 370 members worldwide.
The report outlines work done towards shaping governance frameworks to influence better board reporting on climate impact and risk. It also provides insights into the specific actions taken since the group formed in 2017.
The report notes that fund managers, which represent over $35 trillion in assets, are seeing increased boardroom appetite for addressing climate risk.
“We are now at a tipping point. A significant number of companies have made bold commitments to achieve net zero emissions, with others increasingly following suit,” notes Stephanie Maier, HSBC Global Asset Management and steering committee member of Climate Action 100+.
“Given the urgency of the situation, the role of investor engagement is critical in ensuring we build on this momentum,” he writes.
The report found that across a focus group of Climate Action 100+ members:
The ATO have released a draft guideline to assist funds to apply the non-arm’s length income provisions to ‘non-arm’s length expenditure’.
The Guideline relates to amendments made to section 295-550 of the Income Tax Assessment Act 1997. The draft Guideline has been distributed following the Royal Ascent of the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 on October 2.
The ATO recognises that trustees may not have realised that the proposed amendments will apply to non-arm’s length expenditure of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in an income year.
Funds wishing to comment on the draft guideline can do so by emailing Kendrick.Yim@ato.gov.au. The deadline for feedback is 15 November 2019.
10 October 2019