ATO provides details on employer stapling process
The ATO has released a slide pack that provides insight into the how the new stapling process for employers will proceed.
The slide pack includes a draft of the ‘online request stapled fund form’ that will be accessible through the ATO’s online services for employers from 1 November 2021 when the stapling obligations commence.
Employers, or agents acting on behalf of employers, will need to input information about their employees into the form and they will receive an online response as soon as the form is processed (expected within minutes). Employers who have not enabled online services will have the ability to access this information over the phone.
The stapled fund measure only applies to employees who commence on or after 1 November 2021.
The ATO says it will publish web content on the new stapled super fund requirements in the coming weeks.
Court finds former superannuation trustee Tidswell Financial Services failed to act efficiently
On 27 July 2021, the Federal Court made declarations that Tidswell Financial Services Ltd (Tidswell), failed to act efficiently, honestly and fairly when providing financial services.
The Court found that between 30 November 2016 and 14 February 2018, while it was a superannuation trustee, Tidswell: failed to adequately monitor MobiSuper Pty Ltd (Mobi), the promoter one of its superannuation sub-funds, to ensure business model risks were addressed, including prevention of false or misleading representations and the risk of giving unauthorised personal advice; and failed to comply with Prudential Standard SPS 231 Outsourcing as issued by the Australian Prudential Regulation Authority (APRA). Tidswell has applied to APRA to cancel its RSE licence. It will also pay $50,000 to cover ASIC's costs, which it has agreed will not come from the funds it holds under the Tidswell Master Superannuation Plan.
AIST raises concerns around clawback provisions in draft guidance on REM
AIST’s submission on APRA’s draft Guidance on Remuneration (CPG 511) has raised concerns about consequence management in the case of no clawback or deferral.
The submission notes it is unclear how consequence management is expected to be demonstrated in cases where neither clawback nor deferral apply. This occurs when there is no variable remuneration, which is widespread amongst industry superfunds. The Guidance and Standard are silent on this and AIST argues that this gap needs to be filled for industry to ensure that it meets regulatory expectations on consequence management.
The submission also calls for greater clarity around a number of matters concerning the categorisation of “risk personnel” and remuneration of the board committee.
ASIC seeks feedback on Cost Recovery Statement
ASIC has published its draft Cost Recovery Implementation Statement (CRIS) for feedback.
The CRIS outlines ASIC’s estimated regulatory costs for 2020-21 and how these will be recovered as industry levies under the industry funding model.
The indicative levies published in the CRIS are based on ASIC’s planned regulatory work and associated costs for the 2020–21 financial year. The estimated levies to recover costs for regulating super trustees in 2020–21 are $23.04 million for the cost recovery levy and $6.9 million for the statutory levy.
Final industry levies will be based on ASIC’s actual regulatory costs and the business metrics submitted by entities in each subsector. Final levies will be published in December 2021 and invoiced in January 2022.
The estimated levies to recover costs for regulating super trustees in 2020–21 are $23.04 million for the cost recovery levy and $6.9 million for the statutory levy.
Feedback on the draft CRIS can be submitted until 13 August 2021 to [email protected]
Clarification on Compensation Scheme of Last Resort (CSLR)
In last week’s policy news, AIST noted that the CSLR’s funding model identified superannuation as a sub-sector, which would mean that superannuation funds would incur a levy for potential claims arising. We clarify that this is not the case. In fact, where obligations under the levy framework are imposed on RSE licensees, the obligations extend to each financial adviser employed by the entity. Whilst there may not be a levy to the entity, however, there is still a cost in respect of the financial advisors employed.
AIST is making a submission in response to the Treasury’s Proposal Paper on the CSLR and we welcome feedback from members. Please contact Carlos Lopez, Policy and Regulatory Analyst, at [email protected].
Guide to auditing risk culture
The Institute of Internal Auditors IIA-Australia has released ‘Auditing risk culture - A practical guide’ to help internal auditors, senior management, board audit committees, and other assurance providers in all sectors of the economy.
The guide will be the focus of an upcoming webinar on Wednesday 4 August 11.30 an to 12.30 featuring authors of the guide Kiel Advisory Group Managing Director Elizabeth Arzadon, QSuper’s Head of Internal Audit Regardt Du Preez and Macquarie University Professor Elizabeth Sheedy.
AFCA appoints six new ombudsmen
The Australian Financial Complaints Authority (AFCA) has recruited three new Ombudsmen from the banking and insurance sectors, and promoted three others internally.
Louise McAuliffe will join from ANZ and James Taylor from Westpac as Ombudsmen in the Banking and Finance team at AFCA. David Short will join as an Ombudsman in its Insurance team, coming from business insurance service provider BizCover.
Internally, AFCA has promoted Vicki Carter and Mervyn Silverstein to Ombudsman within the Superannuation team, and Qasim Gilani to Ombudsman in Insurance.
AFCA received about 70,000 complaints in 2020-21 and expects to handle at least that number again in the coming year.
ASIC makes minor amendments to Regulatory Guide 221
ASIC has today made minor consequential amendments to Regulatory Guide 221 (Facilitating digital financial services disclosures) (RG 221).
The amendments made include the written consent to deduct fees under an ongoing fee arrangement among lists of disclosures that may be notified or given to a client in electronic form or sent electronically. This follows the commencement from 1 July 2021 of advice fee consent requirements and consequential amendment of other ASIC guidance as announced in MR 21-134MR ASIC releases guidance on ongoing fee arrangements. The revisions, being minor in nature, did not result in amendment of the RG 221 issue date.
ATO releases draft tax ruling on income tax: superannuation contributions
The ATO has released a draft tax ruling on income tax: super contributions TR 2010/01 for comment about contributions made to a superannuation fund, an approved deposit fund or a retirement savings account.
The ruling explains the Commissioner’s views as to the ordinary meaning of the word ‘contribution’ in so far as ‘contribution’ is used in relation to a superannuation fund, approved deposit fund or retirement savings account in the Income Tax Assessment Act 1997 (ITAA 1997).1 Aspects of this Ruling are also relevant to the meaning of ‘contribution’ in the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR). However, it should be noted that the definition of ‘contribution’ in the SISR modifies the ordinary meaning of the word ‘contribution’.
Comments are due by 27 August 2021 to [email protected]
Super on paid parental leave video
AIST has continued its advocacy around super being paid on parental leave with the release of a new explainer video.
The short video highlights the gender inequity in the super system that was identified by the Retirement Income Review and seeks to bring attention to the issue. We encourage members to like, share and comment.
AIST’s weekly update on the status of legislation
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.