The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 30 September 2016, the Federal Treasurer and Minister for Finance jointly issued the Final Budget Outcome 2015-16 report, which sets out the Australian Government fiscal outcomes for the 2015-16 financial year, including a summary analysis of cash flows, revenue, expenses, net capital investment and the balance sheet. With respect to superannuation the report provides, among other things, that receipts from superannuation fund taxes for 2015-16 totalled $6.834 billion, which represents $204 million (3.1 per cent) above the 2016-17 Budget estimate.
- The Australian Prudential Regulation Authority (APRA) has published APRA Insight Issue Three 2016. According to APRA the publication 'provides information on APRA's main policy initiatives and on key developments in the financial industries that APRA supervises'. Topics for the edition include APRA's 2016 Cyber Security Survey, new financial sector statistics, pricing of commercial property insurance and APRA's Corporate Plan 2016-20. With respect to statistics, APRA discusses its proposal 'to publish new annual statistics on pension accounts, benefits and benefit payments in the Annual Superannuation Bulletin' and 'welcomes feedback on the usefulness of publishing these statistics on a regular basis'.
- On 2 October 2016, the Australian Financial Review reported that the Australian Expatriate Superannuation Fund will become the 'first retail super fund to be recognised by UK authorities' and 'will open to the general public from late October, ending a 14-month deadlock where expat investors had just a single pooled option to choose from'.
- On 3 October 2016, the Financial Ombudsman Service (FOS) published the Comparative Tables 2015-16 Final Report. The tables are produced by FOS annually as required by ASIC Regulatory Guide 139. According to the report, the comparative data is intended to, among other things, assist consumers with finding out how likely other consumers were to lodge a dispute with FOS about a particular financial service provider, and for financial service providers to compare their dispute resolution performance with other FOS members.
- On 6 October 2016, ASIC issued a media release warning Australian Financial Service (AFS) licensees to lodge financial statements and auditor's reports on time. The media release reminds AFS licensees with a financial year ending 30 June to lodge the profit and loss statement and the balance sheet by 31 October. According to the release, 'ASIC has been pursuing…AFS…licensees that have failed to meet their obligation to lodge their annual financial statements and auditor's reports with ASIC within the specified timeframe'. The media release also quotes ASIC Deputy Chair Peter Kell as saying 'Licensees are required to lodge financial statements with ASIC to demonstrate their capacity to provide financial services. Failure to comply with reporting obligations can be an indicator of broader compliance concerns.'
- On 11 October 2016, the Financial Services Council (FSC) released its Life Insurance Code of Practice. According to the Code, it is 'the life insurance industry's commitment to mandatory customer service standards' that has been 'voluntarily developed by the life insurance industry through the Financial Services Council to:
- Promote high standards of service to consumers';
- Provide a benchmark of consistency within the industry'; and
- Establish a framework for professional behaviour and responsibilities'.
The Code sets out standards for the life insurance industry and covers a range of matters, including policy design and disclosure, sales practices and advertising, policy changes and cancellation rights, claims management and complaints and disputes.
The associated FSC media release provides more information about the development and content of the Code. With respect to group life cover in superannuation funds the release states that, 'The Code places obligations on life insurers who provide group insurance through superannuation funds...[h]owever superannuation trustees will often carry out most of the member-facing activity. The FSC is committed to working collaboratively with the superannuation industry to deliver end to end commitment to the insurance experience for superannuation members. These discussions with the superannuation industry will continue.' The FSC media release also refers to the Statement of Intent issued by the FSC with various superannuation industry organisations on 7 October 2016. According to the FSC media release, the Statement of Intent provides that the FSC and industry bodies have committed to 'working together to lift standards for group insurance, including the role of super trustees.'
The Federal Minister for Revenue and Financial Services Kelly O'Dwyer issued a media release stating that the Government welcomed the release of the Code of Practice and that it was 'a positive step in improving consumer outcomes and builds upon a number of other measures announced by the Government, including reforms to life insurance remuneration frameworks, to better align the interests of financial advisers and consumers.'