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Government moves to reword the members’ best interests duty have sparked strong opposition from employers, lawyers, governance bodies, and unions.
Speaking at a webinar for hosted this week by AIST CEO Eva Scheerlinck, representatives from Australian Institute of Company Directors (AICD), the Ai Group, the Law Council of Australia and the ACTU called for the reworded Best Financial Interests Duty and other key proposals relating to this change to be abandoned.
The Best Financial Interests Duty proposal is one of three bills contained in the Your Future, Your Super draft legislation, which is expected to be introduced to the House of Representatives in coming weeks.
Speaking at the event, Natalie Cambrell, Principal Solicitor of KQH Lawyers and a member of the Superannuation Committee of the Law Council of Australia, said inserting the word “financial” into the best interests duty was not only unwarranted, it carried risks to member outcomes.
Fellow panellist, Peter Burn, Chief Policy Advisor from the AI Group which represents employer groups said the approach taken to protect member interests was poorly conceived and poorly designed.
Panel members were similarly opposed to the introduction of a reverse burden of proof on trustee expenditure, also contained in the Bill. This measure would put the onus of proof on trustees, whereby directors are presumed to have breached the law, unless they produce evidence to the contrary. The panel variously described this as unwarranted, an overreach and counterproductive.
But it was a third proposal in the Bill, which would give the government of the day power to ban certain investments, regardless of whether that investment was in the best interests of members, that ACTU assistant secretary, Scott Connolly said was the most alarming.
“This is unprecedented in terms of the overreach…there are no opportunities for review, appeal or challenge. It gives the minister discretionary power to take active steps and intervene directly into the investment decisions that funds make without the need for any Parliamentary oversight.”
To hear more of the panel’s discussion, watch the complimentary webinar.
Representatives of Diversa, Verve Super, Future Super and Certain Group have appeared before the House of Representatives Committee into super and banking to face fiery questions about fund fees, governance and their approach to investing.
Appearing last week, Diversa and the funds were asked about the role of Diversa as a trustee for Verve and Future Super; their business model and whether the funds’ marketing was misleading members given their relatively high exposure to Exchange Traded Funds (EFTs).
The transcript of the hearings can be read here.
In its final weekly report on the COVID early release scheme, APRA has reported that funds received 4.9 million applications with a value of $37.3 billion over the duration of the scheme.
The final report covers data submitted through to 31 January 2021 to allow additional time beyond the closing date for final applications to be provided to funds by the ATO and for funds to process applications and complete payments.
As at 31 January 2021, 98 per cent or 4.8 million of these applications had been paid with a total value of $36.4 billion. 95,000 applications had been closed or revoked without payment. Less than 8,000 applications (0.16% of total applications received) were still in process at 31 January 2021 – many because funds had been unable to contact applicants to finalise payment.
A total of 3.5 million initial applications were approved across the full period of the scheme as well as 1.4 million repeat applications approved during the second application period from 1 July 2020 to 31 December 2020. The scheme was characterised by high levels of applications after the opening dates of each application period (20 April 2020 and 1 July 2020) with volumes tailing off in the later weeks of these application periods, particularly the second application period.
The average payment made over the course of scheme was $7,638. Repeat applications were for an average amount of $8,268 while initial applications were for an average amount of $7,402. This resulted in the average application amount and payment amount in the second application period being slightly higher than in the first application period.
Funds were generally able to process applications and make payments in a timely manner throughout the duration of the scheme. Overall funds took an average of 3.3 business days to make payments with 95% of payments completed within 1-5 business days.
The top 10 funds with the highest number of applications received, accounted for 66% of total early release payments and made 96% of payments within 1-5 business days.
The ATO will acquire confirmation from Services Australia of government payment made to applicants of temporary early access to superannuation for the period of 19 April 2020 to 31 December 2020.
This confirmation of payments – from 19 April 2020 to 31 December 2020 - is in line with the ATO requiring confirmation of other income-support payments, such as JobSeeker, parenting payment and youth allowance.
For further information click here.
The Australian Prudential Regulation Authority (APRA) has released its policy and supervision priorities for the coming year. Consistent with APRA’s strategic objectives detailed in its Corporate Plan, a key focus is to further enhance the resilience and crisis readiness of Australia’s financial system.
APRA’s main superannuation priorities are improving member outcomes, enhancing the prudential framework and supporting the YFYS reforms.
APRA’s key policy priorities in relation to superannuation include:
For further details and proposed timing of the policies please refer to APRA’s information paper
The Australian Prudential Regulation Authority (APRA) has released its 2020 Year in Review document. In a year that was heavily impacted by COVID-19, the publication provides an overview of how APRA went about fulfilling its mandate as a forward-looking safety regulator for Australia’s financial system.
The 2020 Year in Review provides APRA’s view on the financial environment and details its key activities for the year across the banking, insurance and superannuation industries, conducted in alignment with the strategic objectives outlined in its Corporate Plan. It also contains metrics for APRA-regulated industries, including analysis of industry composition, profitability and financial strength.
The 2020 Year in Review is available on the APRA website at: APRA 2020 Year in Review.
The current status of superannuation Bills currently before Parliament can be found here.
11 February 2021