The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
|New superannuation legislation||
On 13 December 2017, the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Bill 2017 (Housing Affordability Bill) and the First Home Super Saver Tax Bill 2017 (FHSS Bill) received Royal Assent.
The accepted amendments to the Housing Affordability Bill include:
The FHSS Bill passed all stages without amendment.
|Australian Financial Complaints Authority||
On 6 December 2017, the Senate passed the Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Bill 2017, which, among other things, establishes the Australian Financial Complaints Authority (AFCA), with 20 amendments.
According to the Supplementary Explanatory Memorandum, the amendments include:
The Bill is now before the House of Representatives.
|Treasury update||Review of early access to superannuation||
On 8 December 2017, Kelly O'Dwyer, Minister for Revenue and Financial Services, issued a media release announcing a Treasury review that will consider the rules governing early release of superannuation on grounds of severe financial hardship and compassionate grounds, and the circumstances (if any) superannuation assets should be available to pay compensation or restitution to victims of crime. According to the media release the Government will also transfer the regulatory role of administering the early release of superannuation benefits on compassionate grounds from the Department of Human Services to the Australian Taxation Office. The relevant Treasury report is expected in March 2018.
|APRA||Consultation package with new prudential standard||Media release||
On 13 December 2017, APRA released a consultation package on "measures aimed at assisting APRA-regulated superannuation licensees to be better positioned to deliver sound outcomes for their members". The package includes measures which:
Copies of the publications, including the draft prudential standards, are available at APRA's website.
|ATO||Departing Australia superannuation payments||ATO website||
On 11 December 2017, the ATO updated their website regarding super information for temporary residents departing Australia. The website informs workers on temporary visas that they may have earned superannuation while working in Australia, and that they "can apply to have this super paid to [them] as a departing Australia superannuation payment (DASP) after [they] leave".
|AIST||New industry guidance||Fee and cost disclosure guidance||
On 24 November 2017, Australian Institute of Superannuation Trustees (AIST) published the RG97 Industry Working Group Fee and Cost Disclosure Guidance (Guidance).
The Guidance states that it is "designed to assist trustees and responsible entities to understand and comply with the amendments to Schedule 10 of the Corporations Regulations 2001 (Cth)", which sets out the fees and costs disclosure regime for superannuation products.
The AIST has also made available fee and cost mapping tables which "provide assistance to funds in understanding what are 'fees and costs', as well as where such fees and costs are to be disclosed".
|Case law update||Full Federal Court appeal||Mercer Superannuation (Australia) Limited v Billinghurst  FCAFC 201||
On 7 December 2017, the Full Court of the Federal Court dismissed an appeal by the trustee of a superannuation fund in relation to a decision of the Federal Court which upheld a determination of the Superannuation Complaints Tribunal (Tribunal).
The relevant determination of the Tribunal was that a decision by the trustee to adopt a particular methodology with which to value pensions being paid from an employer-sponsored plan for the purposes of cashing the pensions out upon the plan's termination was not fair and reasonable.
The trustee selected a methodology with which to value the pensions upon the advice of the actuary of the plan and having regard to the employer-sponsor's preferences. The employer requested the trustee prepare calculations for the valuation of the plan pensions for the purposes of converting the pensions to lump sums, and that such calculation should be determined by reference to the cost of each pensioner purchasing an "equivalent annuity" not indexed for inflation. The employer acknowledged that its preferred valuation would result in the employer being required to make an additional contribution to achieve its stated objectives, which the employer committed to make.
The Tribunal found that the trustee's decision to adopt the methodology requested by the employer was not fair and reasonable and this determination was upheld on appeal to the Federal Court. The trustee appealed and the Full Court of the Federal Court by majority (2-1) dismissed the trustee's appeal on the basis that no error of law could be found in the approach of the judge at first instance. The dissenting judge would have allowed the trustee's appeal.