The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
|Productivity Commission||Draft report “Superannuation: Alternative Default Models” released||Draft report|| |
On 29 March 2017, the Productivity Commission released a draft report on alternative models for default superannuation products.
The Productivity Commission proposes four models “to look at potential ways to introduce more competition into a system that benefits from a large flow of mandated superannuation contributions, and much of that from disengaged members”.
The four proposed models are:
|ATO||Release of new practical compliance guideline||Practical Compliance Guideline PCG 2017/3|| |
On 30 March 2017, the ATO published Practical Compliance Guideline PCG 2017/3, which has the purpose of “supporting the implementation of changes to the taxation of transition to retirement income holder streams”.
According to the Guidelines, its intention is to “provide [the] ATO's compliance approach for certain APRA regulated superannuation funds (including exempt public sector superannuation schemes), pooled superannuation trusts (PSTs), and life insurance companies…facing practical difficulties in complying with recent legislative amendments affecting various transition to retirement income stream products…during the transition period”.
The Guidelines set out the manner in which funds can apply interim arrangements to their products during the transition period.
|Case update||FoFA best interests duty||ASIC v NSG Services Pty Ltd  FCA 345|| On 30 March 2017, the Federal Court of Australia handed down its decision in ASIC v NSG Services Pty Ltd. In this case, ASIC alleged that the defendant breached: |
Relevantly, the decision considered the 'safe harbour' provision in section 961B(2) of the Corporations Act 2001. The defendant admitted that it had breached its best interests duty by reason of the following inadequate practices and polices: new client advice processes; training of representatives; systems for monitoring and supervising representatives; external audits; compliance policies and sales targets and remuneration.
Declarations were made against the defendant in relation to breaches of these provisions by consent.
This is the first action that ASIC has taken against a financial services licensee in relation to breaches of the best interests duty. Following the judgment, ASIC banned the two authorised representatives of NSG from providing financial services for five years.
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