NEED TO KNOW
On 30 April 2013, the Government released exposure draft Superannuation Legislation Amendment (MySuper Measures) Regulation 2013to prescribe details supporting the measures contained in the 4 tranches of the Stronger Super legislation.
As part of the Government’s Stronger Super reforms, the Government introduced a new low-cost default superannuation product called ‘MySuper’ which will be offered from 1 July 2013 and announced governance measures intended to heighten the obligations of superannuation trustees in managing superannuation fund assets.
The reforms relating to MySuper and governance measures were divided into four tranches of legislation, three of which have received Royal Assent and are now law and as at the date of this Corrs In Brief, the fourth and final tranche is still before Parliament.
The draft regulations prescribe details to give effect to the changes contained in those 4 tranches of legislation.
The draft regulations propose amendments to:
prescribe information and disclosure requirements relevant to:
- how the product dashboard information (designed to increase transparency and allow comparisons between superannuation products) is to be worked out and presented;
- the table format in which fees for superannuation products are to be disclosed in product disclosure statements;
- investment portfolio holdings information that is to be published on a registrable superannuation entity (RSE) licensee’s website within 90 days of each reporting day which will occur once every six months on 30 June and 31 December;
- documents that a RSE licensee must make publicly available including but not limited to the governing rules, annual reports, the qualifications of the directors and trustees, the record of attendance at board meetings for each director and a summary of the conflicts management policy; and
- the information relating to remuneration that must be published, and kept up to date, at all times on the RSE licensee’s website (RSE licensees will need to disclose all payments, benefits and compensation paid for or provided by the RSE licensee or by related body corporate of the licensee);
- require trustees to inform members of an ability to request written reasons for decisions made in relation to non-death benefit complaints; and
- require RSE licensees to include the latest product dashboard (for the investment options that the member is invested in) in the member’s periodic statement.
The proposed regulations also make amendments to:
- permit the governing rules of the superannuation fund to limit contributions that are transferred from a foreign superannuation fund;
- prescribe the factors that may be used for a lifecycle investment strategy including the member’s account balance, current salary, contribution rate and gender as well as, in the trustee’s opinion, the time remaining before the member is expected to retire;
- clarify when a defined benefit member is excluded from certain MySuper requirements and give priority to accumulation interests in the event of winding up an insolvent defined benefit fund;
- dual regulated entities (so that an RSE licensee which is also the responsible entity of a registered managed investment scheme will be required to inform ASIC of events that may lead to material adverse changes in financial position);
- requirements for RSE licensees to provide APRA with early disclosures of successor fund transfers;
- repeal or amend existing regulations relating to matters to be dealt with in APRA prudential standards;
- update the definition of an eligible rollover fund; and
- apply relevant provisions of the Superannuation Industry (Supervision) Regulations 1994 to persons involved in the management of an RSE licensee that is also a First Home Savers Accounts provider.
TIMING OF NEW REGIME
The proposed amendments will commence on 1 July 2013. Any amendments in the draft regulations in relation to dual regulated entities will commence on 1 July 2015.
The closing date for submissions on the exposure draft is Wednesday, 15 May 2013.