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Superannuation Legislation Update - 17 March 2022

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Awaiting passage

Bill

Description

Status

Proposed start date

Financial Accountability Regime Bill 2021

The Financial Accountability Regime will impose four core obligations:

 

First, the regime will impose accountability obligations on superannuation directors/senior executives and influential executives. This obligation will require those senior personnel to ensure they conduct their affairs in a certain manner (including, acting with honesty and with care, skill and diligence).

 

Second, the Bill includes key personnel obligations which requires a superannuation fund to "nominate senior and influential executives to be responsible for all areas of their business operations".

 

Third, the regime introduces deferred remuneration obligations which require superannuation funds to defer at least 40 per cent of the variable remuneration of senior personnel for a minimum of 4 years. This includes an obligation reduce variable remuneration for non-compliance with accountability obligations.

 

Finally, the bill introduces notification obligations which require superannuation funds to provide the regulator (APRA or ASIC) with certain information re: senior staff and the superannuation fund business.

 

Certain entities above a nominated threshold, which will be determined by rules made by the Minister, will also be required to meet 'enhanced' notification obligations. These enhanced notification obligations include preparing and submitting accountability statements and accountability maps.

 

Before the House

Referred to Committee (25/11/2021): Senate Economics Legislation Committee; Report due 15/02/2022

The Report was received on 15/2/22. The Committee recommended that the Bill proceed.

The Act commences the day after this Act receives Royal Assent.

An RSE Licencee will become ‘accountable entity’ from the start of the latest of:
(a) 1 July 2023; and
(b) the day that is 18 months after the commencement of this Act

Financial Services Compensation Scheme of Last Resort Levy Bill 2021 &
Financial Services Compensation Scheme of Last Resort Levy (Collection) Bill 2021

The levy framework creates a tax to be levied against relevant industry entities to fund the compensation scheme of last resort (CSLR).

 

Referred to Senate Economics Legislation Committee (Report due 15 February 2022)

The Report was received on 15/2/22. The Committee recommended that the Bills proceed.

 

At the same time as the Financial Accountability Regime Act 2021 commences.

Treasury Laws Amendment (2021 Measures No. 7) Bill 2021

The Bill amends the AFCA Act to assist in the closure of the SCT and to facilitate any transitional arrangements associated with the transfer of superannuation complaints to AFCA.

Passed by HoR on 25 August.

 

Before the Senate since introduced on 19 October 2021

Day of Royal Assent

Financial Sector Reform (Hayne Royal Commission Response No. 3) Bill 2021

Makes consequential amendments to relevant Acts to support the Financial Accountability Regime; and introduces the CSLR

 

Bill introduced 28/10/21

Referred to Committee 25/11/21, report due 15/2/22

The Report was received on 15/2/22. The Committee recommended that the Bill proceed.

At the same time as the Financial Accountability Regime Act 2021 commences.

Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022

The Bill contains a number of amendments to, among other Acts, the ASIC ACT and Corporations Act.

Bill Introduced HoR 9/2/22

Various

Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022

Aka SLACIP, a second set of amendments to the SOCI Act. The Bill proposes further amendments to the SOCI Act to enact a framework for risk management programs, enhanced cyber security obligations (including mandatory reporting).

Bill introduced HoR 10/2/22

To Senate 16/2/22

Day after Royal Assent

Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022

The purpose of these amendments is to impose financial reporting obligations on registrable superannuation entities that are consistent with those that currently apply to public companies and registered schemes

Bill Introduced HoR 17/2/2022

Schedule 2:
1 July 2023

 

 

Passed

Bill/Reg

Description

Status

Start date

Act -

Security Amendment Legislation (Critical Infrastructure) Act 2021

Aka SLACI, the Bill includes an additional positive security obligation for critical infrastructure assets. This includes the requirement to develop a risk management program as well as mandatory cyber incident reporting.

This is the first of two bills on the critical infrastructure reforms.

See also SLACIP, above.

Passed both Houses:
22 November 2021

Royal Assent:
2 December 2021

Act No. 124 of 2021

The day the Act receives Royal Assent – 3 December 2021

Regulation –

Corporations Amendment (Portfolio Holdings Disclosure) Regulations 2021

Requires superannuation trustees to publicly disclose portfolio holdings using the prescribed table

In force (Regulation made 11 November 2021)

Reporting periods from 31 December 2021. Trustees must make certain information about the RSE’s investment options publicly available on the entity’s website no later than 90 days after a specified reporting day.

Regulation –

Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021

Amends the Corporations Regulations and SIS Regulations to:

  • require that providers of Proxy Advice must be AFS Licencees and specify the circumstances in which voting advice is proxy advice (a kind of financial service)(on and from 7/2/22); and
  • set out obligations for financial services licensees who provide proxy advice to:
    • provide any proxy advice to the entity that is the subject of the proxy advice on the same day it is provided to the client; and
    • be independent of their clients.

Regulation disallowed 10/2/22

Was to commence the day after Registration and several provisions were to have effect 7 February.

Disallowed by Senate 10 February 2022 which has the effect of removing the requirements (and any amendments) ab initio.

Act –

Corporations Amendment (Meetings and Documents) Act 2021

The Bill amends the Corporations Act 2001 to establish a permanent mechanism to allow companies and registered schemes to hold hybrid (in person and remote) meetings and to use technology to execute, sign and share company and meeting-related documents.

Passed both Houses 10/02/2022

Royal Assent 22/2/22

Act No. 9 of 2022

1 April 2022

Act –

Corporate Collective Investment Vehicle Framework and Other Measures Act 2021

The CCIV Bill introduces the Retirement Income Covenant. Schedule 9 of the Bill amends the SIS Act to introduce a covenant which requires trustees to formulate, review regularly and give effect to a retirement income strategy for beneficiaries who are retired or approaching retirement.

The obligations form part of the section 52 covenants, and consistent with a contravention of other section 52 covenants, a trustee who contravenes the retirement income covenant may be subject to a civil penalty.

Referred to Committee (02/12/2021): Senate Economics Legislation Committee; Report due 03/02/2022

Passed both Houses 10/2/2022

Royal Assent 22/2/22

Act No. 8 of 2022

1 July 2022

Regulation –

ASIC Corporations (Amendment) Instrument 2022/20

Amends the ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792. This Regulation provides relief to financial counselling agencies that provide financial counselling predominately for the purpose of assisting individuals or small businesses who are in financial difficulty to resolve their problems. This Regulation ensures that Financial Counsellors continue to be exempt from holding an AFSL.

In force (Regulation made 8/2/2022)

9 February 2022

Act –

Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021

The Bill covers the following:

  • Removal of $450 monthly income threshold for super contributions (Sch. 1)
  • Higher withdrawal limit for First Home Super Saver Scheme from $30k to $50k (Sch. 2)
  • Lower age threshold for super downsizer scheme from 65 to 60 (Sch. 3)
  • Removal of super contribution “work test” for those aged between 67 and 74 (Sch. 4)
  • Work test will only apply for that age group if they want to claim a tax deduction for their voluntary contribution (Sch. 4)

Passed both Houses 10/2/2022

Royal Assent 22/2/22

Act No. 10 of 2022

Schedules 1 & 2: the day after the Act receives Royal Assent.

 

Schedules 3 to 6: The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives Royal Assent.

Regulation –

Superannuation (Government Co-contribution for Low Income Earners) Regulations 2022

The Superannuation (Government Co‑contribution for Low Income Earners) Regulations 2004 will ‘sunset’ on 1 April 2022. This Regulation will remake that Regulation with an effective date of 1 April 2022.

 

Generally changes of a minor or machinery nature ONLY have been made. Headings and definitions have been altered to align them with current drafting standards. There have also been some alterations to ‘eligible accounts’ to ensure that no “insurance-only” accounts are credited with the Government Co-Contribution.

 

It is recommended that Trustees review current reporting data to ensure it complies in the next ‘round’ of Govt. Co-Contributions reporting and/or receipt.

In force (Regulation Registered 17 February 2022)

1 April 2022

Regulation –

Treasury Laws Amendment (Enhancing Superannuation Outcomes) Regulations 2022

The regulation makes amendments to the contributions acceptance rules as a result of the passage of the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 (specifically Schedule 3).

 

Schedule 3 to the Bill amends the ITAA 1997 to allow individuals aged 60 and above to make downsizer contributions to their superannuation plan from the proceeds of selling their home (previously 65 and above).

In force (Regulation Registered 3 March 2022)

1 April 2022 (although the amendments made apply in relation to contributions made on or after 1 July 2022)

 

 

Consultations

Consultation

Description

Consultation Details

Consultation (ASIC) –

CP 359 Update to RG 263 Financial Services and Credit Panel

ASIC proposes that RG 263 - Financial Services and Credit Panel be updated to reflect legislative changes in the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act). This consultation paper (CP 359) sets out ASIC’s proposals. The proposed Regulatory Guide relates solely to financial advisers.

Released 28 February 2022
Comments close 28 March 2022

Consultation (ASIC) –

CP 358 Remaking ASIC relief on PDSs, superannuation dashboards and FSGs

This consultation paper sets out ASIC’s proposals to remake class orders and one legislative instrument on specific disclosure requirements for financial services. The proposals are to:

  • remake, in a single new instrument, relief in class orders relating to Product Disclosure Statement (PDS) in-use notices for employer-sponsored superannuation and product dashboard disclosure;
  • remake, in a single new instrument, relief in instruments that relate to shorter PDSs and PDS obligations of superannuation trustees, IDPS operators and responsible entities of IDPS-like schemes; and
  • remake, as a new instrument, a class order relating to Financial Services Guides (FSGs) in time critical situations.

 

Released 18 February 2022. Comments close 12 April 2022.

Consultation (APRA) –

Consultation on APRA's Superannuation Data Transformation

On 18 February 2022, APRA released a discussion paper outlining the proposals for the publication and confidentiality of data reported under the new superannuation reporting standards.

 

The discussion paper, draft metrics, draft publications and confidentiality proposals are available on the APRA website.

Released 18 February 2022. Comments close 15 April 2022.

Consultation (Treasury) –

Quality of Advice Review  Terms of Reference Published

Consistent with recommendations 2.3, 2.5 and 2.6 of the Final Report of the Hayne Royal Commission, the Government is commissioning this Review which will consider how the regulatory framework could better enable the provision of high quality, accessible and affordable financial advice for retail clients.

 

Released 11 March 2022.

A report will be provided to the Government by 16 December 2022.

Consultation (Treasury) –

CDR Sectoral Assessment for the Open Finance sector - Non-Bank Lending

Phase 1 of the ‘Open Finance’ review in the context of the Consumer Data Right (CDR).

 

Public consultation has now commenced to inform the sectoral assessment for applying the Consumer Data Right to non-bank lending. Sectoral assessments are conducted with reference to the criteria set out in section 56AD the Competition and Consumer Act 2010.

 

This consultation does not relate to superannuation but is provided FYI as an example of the Open Finance Sectoral Assessment consultation materials and processes. The ‘papers’ on the CDR and Open Finance will be of interest to Trustees.

 

Released 15 March 2022

Consultation closes 12 April 2022