The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
|News Bills receive Royal Assent||
On 13 December 2017, the following Bills received Royal Assent:
|Inquiry into banking,superannuation and financial services industry||
On 18 December 2017, the Honourable Scott Morrison MP, Treasurer, issued a media release explaining that the Governor-General had "issued the Letters Patent to the Honourable Kenneth Madison Hayne AC QC, formerly a judge of the High Court, establishing the Royal Commission into alleged misconduct in Australia's banking, superannuation and financial services industry".
According to the Letters Patent, Commissioner Hayne is required to submit an interim report to the Governor-General by 30 September 2018 and a final report by 1 February 2019.
|APRA||Release of consultation package to introduce measures to strengthen superannuation member outcomes||
On 13 December 2017, APRA released the following draft prudential standards and practice guides for public comment:
According to the associated discussion paper, these amendments "are intended to improve practices across the superannuation industry so that RSE licensees can effectively respond to increasing strategic challenges" and demonstrate that they meet the requirements of the Superannuation Industry (Supervision) Act 1993. The consultation period is open until 29 March 2018. APRA proposes that the new prudential standards will come into effect from 1 January 2019.
|Case law update||Membership of superannuation scheme dependent on whether employees were permanent or temporary||
On 12 December 2017, the Federal Court of Appeal handed down its decision in Innes v AAL Aviation Limited  FCAFC 202. The judgment concerned an appeal by two former employees of Trans-Australia Airlines (TAA) and Qantas - Mr Hunter and Mr Innes - who claimed they were given incorrect advice and information about their eligibility to join advantageous Commonwealth superannuation schemes which were available to TAA employees until 1 July 1980 and that, as a result, their superannuation entitlements are now less than they otherwise would have been.
The appellants' initial claim was based on multiple causes of action, however the appeal was only brought on the primary judge's decision in relation to the claims for negligent misstatement and negligence generally. The Court dismissed the appeals on the basis that the elements of each cause of action were not made out. The Court also considered whether Mr Innes was a 'permanent employee' under the Superannuation Act 1976, and overturned the finding of the primary judge that Mr Innes was only a temporary employee.
The Court held that Mr Innes was a permanent employee because there was no evidence that his appointment as a Traffic Officer in 1974 was intended to be anything other than in a permanent capacity. According to the Court, the correct time at which to assess the permanency or otherwise of a person's employment is the date of engagement. The application form completed by Mr Innes and his letter of appointment both indicated that his employment was intended to be ongoing and not temporary in any sense. Mr Innes was therefore an eligible employee for the purposes of the superannuation scheme. However, because Mr Innes could not make out all the elements of his causes of action, his appeal was dismissed.
The Full Court unanimously dismissed the appeal of Mr Hunter without considering his claim that he was a permanent employee on the basis of the primary judge's findings as to his credibility. The Court was not prepared to overturn the primary judge's finding that Mr Hunter's evidence regarding the likelihood of him pursuing acceptance into the superannuation fund had he not been given incorrect information was implausible and unreliable.