Budget 2021 – what we know so far
While there has been no official confirmation of any specific superannuation announcements or measures in Tuesday’s Federal Budget, speculation is growing that the Government is exploring measures to improve women’s retirement outcomes. Read more
Most of the commentary has focused on the Government including super on paid parental leave – a measure that AIST, Women in Super and other industry groups have long advocated. While it is likely this measure would only apply to taxpayer funded parental leave, such a move would be a welcome step in the right direction.
Encouragingly, it is now widely accepted the Super Guarantee rise to 10% on 1 July will proceed, though we will have to wait until Tuesday to see if the Government is willing to reaffirm its commitment to the legislated 12 per cent timeline.
As in previous years, AIST will be in Canberra to cover the budget, producing a budget analysis to be emailed to all policy news recipients on Tuesday night.
ASIC commences civil proceedings against Westpac for insider trading relating to the sale of Ausgrid
ASIC has commenced civil proceedings in the Federal Court against Westpac for insider trading, unconscionable conduct and breaches of its Australian financial services licensee obligations. Read more
In a document filed to the Federal Court, ASIC says the allegations relate to Westpac's role in executing a $12 billion interest rate swap transaction with a consortium of AustralianSuper and a group of IFM entities (Consortium).
The transaction occurred on 20 October 2016 and was associated with the privatisation of a majority stake in the electricity provider Ausgrid by the NSW government. The transaction remains the largest interest rate swap transaction executed in one tranche in Australian financial market history.
APRA releases guidance & update on remuneration
Following the consultation on the second draft of APRA’s new standard on remuneration, the regulator has released the draft Prudential Practice Guide CPG 511. Read more
The draft guidance supports the new standard, providing principles and good practice on key issues such as defining non-financial measures of performance and applying a material weight to these measures to determine variable remuneration.
In drafting the guidance, APRA paid particular attention to areas where greater clarity was requested by entities during the consultation for CPS 511. The regulator is preparing a response paper and it plans to finalise the standard this (calendar) year. APRA has flagged that it does not expect any material revisions to be made to CPS 511 but that it will make potential adjustments following the finalisation of the Financial Accountability Regime.
In the lead up to the new standard coming into effect in 2023, APRA expects that entities will seek to improve and maintain transparency on their remuneration arrangements. APRA is currently conducting a data study with selected entities (including some of AIST’s members), to inform its approach to reporting and disclosure requirements. These requirements will be developed and consulted on with industry in late 2021.
APRA is seeking to address the findings from the Royal Commission and the principles for sound compensation practices of the Financial Stability Board. Ultimately, APRA has indicated that Boards are responsible to determine how to apply APRA-specified remuneration principles in a way that is appropriate to their entity’s business model and particular risks.
APRA is seeking stakeholder feedback on the draft CGP 511 by 23 July 2021. AIST has organised a roundtable discussion from 2 to 3 pm on Wednesday 2 June to discuss funds views on the draft guidance which will inform AIST’s submission. If you would like to join that discussion, please contact Holly Lindsay [email protected].
Subject to feedback, the final Guide is expected to be released before the end of 2021.
The draft CPG 229 and supporting resource links are available on the APRA website at: Consultation Draft Prudential Practice Guide on Remuneration.
ASIC to consult on breach reporting
ASIC has released Consultation Paper (CP) 340 on breach reporting and related obligations. The paper seeks feedback from stakeholders on ASIC’s proposed updates to regulatory guidance as outlined in Regulatory Guide 78. Read more
The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 introduced reforms to the breach reporting regime and the proposed updated draft guidance seeks to reflect these reforms, which commence on 1 October 2021.
As part of CP 340, ASIC has also released the draft regulatory guide and information sheet. The consultation paper and attachments can be found here under CP 340.
AIST will be reviewing the proposals in the paper and make a submission with engagement from its members. Consultation is open until 3 June 2021.
AIST members who would like to be involved in AIST’s consultation process, or who want to make specific comments, should contact Carlos Lopez at [email protected].
New definition proposed for a critical superannuation asset
The department of Home Affairs has proposed that the definition of a critical superannuation asset only applies to a super fund with FUM of $20 billion or more. Read more
The definition of a critical superannuation asset has been proposed in the Security Legislation Amendment (Critical Infrastructure) Bill 2020 which is currently being considered by the Parliamentary Joint Committee on Intelligence and Security. The department seeks feedback on the proposed threshold outlined in this paper by 14 May 2021.
AIST’s weekly update on the status of legislation
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.