Financial Services eBulletin - 15 October 2014
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 30 September 2014, the Australian Prudential Regulation Authority (Confidentiality) Determination No. 10 of 2014 was registered. It provides that any information given by superannuation entities to APRA under certain reporting standards will not be confidential.
- On 9 October 2014, the ATO released Case study: breaching SMSF residency rules which explains the appropriate course of action to take when there has been a breach of SMSF residency rules.
- On 9 October 2014, ASIC released Report 413 Review of retail life insurance advice which found that "the industry needs to improve the quality of advice and ensure that the interests of consumers are given priority".
- On 9 October 2014, the 2013-2014 Annual Review was issued by the Financial Ombudsman Service. It shows that "the total number of disputes received remains relatively steady with FOS receiving 31,680 disputes, a decrease of 2% on last year. The number of disputes accepted declined by 3%". There were 296 matters accepted by FOS in the superannuation category of investment disputes. This was a 4% increase from the previous year, and represented one-quarter of all investment disputes. The report noted that "most superannuation disputes were about self-managed funds (35%) and retail funds (33%). People who lodged disputes about self-managed funds were most likely to complain about inappropriate advice (31%). Common issues in disputes about retail funds were inappropriate advice (16%) and failure to follow instructions/agreement (14%)."
- On 10 October 2014, Treasury released for comment an Exposure Draft Bill and an accompanying Explanatory Memorandum which proposes to insert into the tax legislation "Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014: Excess non-concessional superannuation contributions tax reforms". The proposed amendments aim to deal with unintentional breaches of the contribution caps. The legislation will provide "individuals the option of withdrawing super contributions in excess of the non-concessional contributions cap made from 1 July 2013 and associated earnings". These will be taxed at the individual's marginal tax rate and will avoid the current harsh penalties that are in place for inadvertent breaches. Comments are due by 24 October 2014.
- On 10 October 2014, the ATO withdrew ATO ID 2007/147 because it relates to a now-repealed part of the tax legislation. It related to deduction limits for employer superannuation contributions made under section 82AAC(2) of the ITAA 1936.