The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
|Legislative updates||Passage of new bill||Social Services Legislation Amendment Bill 2017|| |
On 12 April 2017, the Social Services Legislation Amendment Bill 2017 received Royal Assent and is therefore now law. The Bill implements a number of changes to Australian Government social security payments. The changes which relate to superannuation allow for, as explained in the Explanatory Memorandum, "the automation of the regular income stream review process by enabling the Secretary to require income stream providers to transfer a dataset to the Department of Human Services [(DHS)]…on a regular basis".In short, the Bill provides the DHS with legislative authority to require income stream providers such as superannuation fund trustees to regularly report income stream information to the DHS in an agreed "dataset". Information which the DHS can now require an income stream provider to report includes the type of income stream being provided, its purchase price, its commencement day, commutations and residual capital value.
|Legislative updates||Treasury Laws Amendment (2017 Measures No.2) Bill: Superannuation Reform Package Amending Provisions|| |
On 12 April 2017, the Federal Government released for public consultation exposure draft legislation and associated explanatory materials. According to the related Treasury media release, the draft legislation "gives effect to amendments that resolve issues identified after the passage of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 and the Superannuation (Excess Transfer Balance Tax) Imposition Act 2016".
The amendments in the exposure draft legislation relate to various measures introduced as part of the Government's changes to superannuation, and implemented as part of the 2015/2016 Budget, namely the transfer balance cap, the changes to the concessional contribution rules, the objectives of superannuation and the changes to the transition to retirement income stream (TRIS) rules.
The amendments to these measures in the exposure draft legislation are explained in the accompanying Exposure Draft Explanatory Materials. With respect to the TRIS rules, the Explanatory Materials provide that, "The amendments in relation to the TRIS rules relax the existing prohibition on TRISs ever being in the retirement phase. As a result, a TRIS will now be in the retirement phase if the member has satisfied a condition of release with a nil cashing restriction…[and]…also…ensure that a fund can apply CGT relief in respect of assets that cease to be segregated current pension assets when broader TRIS changes come into effect".
The Government invites submissions to be provided by 24 April 2017.
|Legislative updates||Release of exposure draft legislation||Treasury Instruments Autumn 2017: TSY/45/029 Capped defined benefit income stream|| |
On 14 April 2017, the Government released for public consultation exposure draft regulations and associated explanatory materials. According to the related media release, the proposed changes implemented by the draft regulations are intended to "expand the range of capped defined benefit income streams under the transfer balance cap" and "ensure pensions that cannot practically commute in response to the transfer balance cap are treated as capped defined benefit income streams under the transfer balance cap…[which] allows large pensions to be subject to additional tax instead of forced commutation".The Government invites submissions to be provided by 4 May 2017.
|Legislative updates||Treasury Laws Amendment (2017 Measures No.2) Bill 2017: Income tax relief for transfers within a fund to a MySuper product|| |
On 13 April 2017, the Federal Government released for public consultation exposure draft legislation and associated explanatory materials. According to the related media release, "the legislation will amend the Income Tax Assessment Act 1997 to give effect to tax reforms announced on 29 June 2015, which expands the tax relief available to superannuation funds when mandatorily transferring assets as part of the transition to the MySuper rules".
According to the media release, the purpose of the consultation is to seek industry views on the proposed expanded tax relief. It notes that superannuation funds are required to transfer the existing balances of members who are in default products to MySuper products by 1 July 2017, and that while tax relief is currently provided for these transfers into a different superannuation fund, relief is not provided for transfers within the same fund structures. Under the proposed legislation, tax relief will be expanded to apply to mandatory transfers within the same fund structure.The Government invites submissions to be provided by 27 April 2017
|ATO||Withdrawal of ATO Interpretative Decisions||ATO Website|| |
On 13 April 2017, the Australian Taxation Office (ATO) withdrew the following Interpretative Decisions (ATO IDs), each of which relate to liability for the superannuation guarantee charge payable under the Superannuation Guarantee (Administration) Act 1992 in various circumstances involving an employer company in liquidation:
The three ATO IDs were replaced by ATO Superannuation Guarantee Determination SGD 2017/1 (see below).
|ATO||New Superannuation Guarantee Determination released||SGD 2017/1|| |
On 19 April 2017, the ATO issued Superannuation Guarantee Determination SGD 2017/1. The Determination provides that an advance paid under section 28 of the Fair Entitlements Guarantee Act 2012 to a former employee is 'salary or wages' paid by the employer to the employee for the purposes of working out a superannuation guarantee charge liability under the Superannuation Guarantee (Administration) Act 1992.
The Determination replaces ATO IDs 2015/13, 2015/14 and 2015/15 (which were withdrawn on 13 April 2017 - see above).
|Insurance in Superannuation Working Group||Release of new ISWG Group Discussion Paper||Discussion Paper: Claims Handling|| |
On 7 April 2017, the Insurance in Superannuation Working Group (ISWG) released Discussion Paper: Claims Handling (April 2017). According to the related media release, the paper is the second in a series as a further step toward developing a Life Insurance Code of Practice for superannuation trustees. The media release explains that the paper "examines existing practices and issues associated with insurance claims handling and outlines some ambitious changes in timeframes developed by superannuation and life industry representatives to improve member experience".
The ISWG is seeking submissions on the Discussion Paper by 5 May 2017.
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.