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Super legislation and regulatory update

This update covers new legislation and regulatory developments for the third quarter of the 2021 calendar year.

ASIC warns employers and super funds about influencing employees’ choice of super fund


ASIC recently updated Information Sheet 89, Communicating with employees about superannuation fund choice: what you can and cannot do, which sets out how employers should communicate to their employees about superannuation choices without breaking the law.

The Information Sheet advises:

What you can do What you should not do
  • You can give factual information to employees, including documents relating to superannuation
  • You can refer employees to information on Government websites, such as the YourSuper comparison tool and Moneysmart resources
  • You can ask a superannuation fund provider to present to your employees
  • You can refer employees to a licensed financial adviser
  • You should not give financial product advice or mislead employees about superannuation products
  • You should not direct, recommend or influence your employees to choose a particular superannuation fund
  • You should not make an unsolicited offer to employees, or ask them to apply for a superannuation product during real-time contact (such as a meeting) – in other words, you should not hawk products
  •  

For more information, please see the ASIC website.

APRA releases results of the first performance test

APRA has released the results of the first performance test for MySuper products.

As part of the government’s Your Future, Your Super reforms, which are designed to make sure the superannuation system delivers better outcomes for members, the annual APRA performance test:

  • applies to all default (MySuper) products,
  • requires all funds that fail the test to advise their members of that fact, and
  • prohibits products that fail the test two years in a row from accepting new members until their net investment performance improves.

On 1 September 2021, APRA published the outcomes of its first annual test.

Of 80 super fund products tested, 67 passed and 13 failed.

We are pleased to advise that Sunsuper’s MySuper product passed the test.

The APRA performance test compares:

  • the average investment return achieved by the fund (net of investment and administration fees) over a 7-year period
  • with the return that could have been achieved if the fund had invested in benchmark products set by APRA (net of the median level of fees) over that same period.

A fund failed the test if their returns were lower than the average by a difference of at least 0.5%.

For more information, please see APRA's website

APRA has published its 2021–2025 Corporate Plan

APRA has published its 2021–2025 Corporate Plan which is based around the strategic themes of “protected today” and “prepared for tomorrow”. There were no updates to the roadmap of activities - high level activities and timelines are unchanged.

ATO issues fact sheet to explain the impact of compensation on super contribution caps

The ATO has issued a fact sheet to explain the implications for an individual’s superannuation contributions cap where a fund allocates compensation received to their account (as a result of a returned Advice Fee from an Adviser as part of licensee remediation programs, for example).

Treasury Laws 2021 Amendment No. 6 Bill

Treasury Laws 2021 Amendment (2021 Measures No. 6) Bill 2021 is now law. These amendments impact refunds of large-scale generation shortfall charges for non-assessable non-exempt income, change actuarial certificate requirements for certain superannuation funds, and improve superannuation information sharing for family law proceedings.

ATO signals a degree of leniency for the first year of ‘stapling’

The ATO has signalled a degree of 'leniency' for the first year of stapling, noting they will "support employers with help and assistance as a first step to improving compliance, recognising initial non-compliance may be a result of a lack of knowledge or business readiness rather than a non-compliant attitude". The ATO recognises that despite an employer or agent's best efforts, genuine mistakes and misunderstandings will occur.

Employers may enjoy some concessions from the ATO for the first year of compliance with amended choice of fund rules affecting superannuation guarantee (SG) contribution obligations.

For more information on stapling, visit the ATO’s website and sunsuper.com.au/stapling

Covid-19 payments and work test super contributions, 01 September 2021

APRA has released guidance on the interaction between COVID-19 disaster payments and satisfying the work test.

APRA’s view is that recipients of the Pandemic Leave Disaster Payment or COVID-19 Disaster Payment should not automatically be considered “gainfully employed” for the purpose of the work test. The work test requires individuals aged 67 to 74 years to be gainfully employed on at least a part-time basis in a financial year to make superannuation contributions.

This treatment differs to that of JobKeeper payments due to the nature of the disaster payments, such that:

  • Recipients of the Pandemic Leave Disaster Payment cannot count the 14 days in which they receive the payment towards the work test, as the individual must not be working to be eligible for the payment.
  • The COVID-19 Disaster Payment is considered to be a personal income supplement or replacement, rather than an employer-based wage subsidy.

Recipients of the disaster payments may still satisfy the work test if the requirements for gainful employment are met at a later time in the financial year.

ASIC’s RG 271 Internal Dispute Resolution (IDR) requirements

Introduced on 5 October 2021, ASIC’s Regulatory Guide 271: Internal Dispute Resolution explains what certain financial firms (including Australian financial services licensees and Australian credit licensees) must do so that they have an IDR system in place that meets ASIC’s standards and requirements.

It is ASIC’s expectation that consumer and small businesses have access to fair, timely and effective dispute resolution.

How Sunsuper has responded

We’ve updated our Complaint Handling Policies across Sunsuper, Sunsuper clearing house and Beam to make it easier for members and employers to make a complaint. Find out more on our website.

ASIC issues updated RG 38 on anti-hawking

Reissued 23 September 2021, ASIC’s Regulatory Guide 38: The hawking prohibition sets out the regulator’s guidance on hawking provisions that aim to protect consumers from unsolicited offers of financial products.

In essence, the new hawking regime prohibits product issuers and their representatives from making offers to sell retail clients financial products where the offer takes place during or ‘because of’ unsolicited contact.