Australia: Superannuation, Funds Management & Financial Services News – 17 May 2017

Last Updated: 19 May 2017
Article by Chris Lovell, Paul Faure and Bill Glover

Most Read Contributor in Australia, August 2017

In the media

Outdated default super needs overhaul
MEDIA - 12 May 2017 - Australia's default superannuation framework was built on "outdated" barriers that have stifled competition among the nation's super providers and dismantling those barriers would serve consumers' best interests, according to the Financial Services Council (FSC). More...

Associations react to housing affordability measure
MEDIA - 10 May 2017 - The FPA, AFA and SMSF Association have responded to measures in the federal budget that would allow first home buyers to access their superannuation. More... More...

New dispute resolution body outlined
MEDIA – 09 May 2017 – The government has announced the creation of a new external dispute resolution body designed to give Australians a "simpler, more accessible" way to resolve disputes with banks, super funds and other financial institutions. The Australian Financial Complaints Authority (AFCA) is intended to improve competition and accountability among financial institutions. More...

APRA announces appointment of senior executives
APRA – 10 May 2017 - The Australian Prudential Regulation Authority (APRA) has announced the appointment of four new senior executives to its leadership team, as part of a broader organisational restructure designed to equip APRA to continue to respond to changes in the financial sector. More...

Govt avoids using SG for property
MEDIA - 10 May 2017 - The federal government has stopped short of allowing first home buyers to use compulsory super savings for a property deposit, but has introduced a series of incentives to make saving for a home easier. More...

Major Bank Levy a Poor Policy Precedent
AFMA – 10 May 2017 - The Australian Financial Markets Association has expressed concern regarding the cornerstone budget announcement of the Government to impose a Major Bank Levy, with projected revenue over the forward estimates period of $6.2 billion. The announced levy applies to Australia's five largest banks, with liabilities in excess of $100 billion. More...

Treasury meeting on bank tax raises more questions than answers
ABA - 11 May 2017 - The CEO of the Australian Bankers' Association Ms Anna Bligh has warned that the Federal Government's new $6.2 billion bank tax is fraught with even more uncertainty after Treasury officials were unable to answer key questions at a briefing with banks. More...

New major bank tax bad for jobs and economic growth
ABA - 9 May 2017 - A new tax on major banks in the Federal Budget is a tax on the economy, according to the Australian Bankers' Association Chief Executive Anna Bligh. More...

Building an accountable and competitive banking system
TREASURY – 09 May 2017 - The Turnbull Government is announcing an overhaul of the financial system and bringing forward a comprehensive package of reforms to strengthen accountability and competition. The Government will legislate for a new Banking Executive Accountability Regime that will ensure banks and their executives are held accountable when they fail to meet expectations. More...

A levy here, a levy there – FPA responds to mixed Budget
FPA – 09 May 2017 - The Financial Planning Association of Australia (FPA) welcomed measures to encourage older property owners to downsize in the Federal Budget, but cited concerns with increased complexity to the superannuation system. More...

Minimising complexity essential for super success: ASFA
ASFA – 09 May 2017 - The Association of Superannuation Funds of Australia (ASFA) said while not as substantial as the landmark reforms in last year's Budget, the package of superannuation-related measures announced by the government will nonetheless have a wide-ranging impact. More...

Banks stay mum on unpaid super
MEDIA - 08 May 2017 - Industry Super Australia (ISA) has criticised Australia's major banks over their lack of action on the issue of unpaid super following the results of this week's Senate inquiry. More...

Inquiry into the state of competition in the financial system
TREASURY - 8 May 2017 - The Government is committed to ensuring that Australia's financial system is competitive and innovative, tasking the Productivity Commission to hold an inquiry into competition in Australia's financial system. More...

KPMG flags licensee supervision risks
MEDIA – 08 May 2017 - ASIC's finding that many licensee audits are inadequate means licensees need to find better ways to monitor and supervise their authorised representatives, says KPMG. More...

ASIC stifling fee reductions: Rice Warner
MEDIA – 05 May 2017 - ASIC's recent introduction of Regulatory Guide 97, Disclosing fees and costs in PDSs and periodic statements, is likely to stifle the downward trend in superannuation fund headline fees, according to Rice Warner. More...

Death benefit distribution top SCT grievance
MEDIA - 03 May 2017 - The Superannuation Complaints Tribunal (SCT) has introduced a new pilot program to deal with death benefit complaints, which made up the largest proportion of disputes at the tribunal in the first quarter of 2017. More...

Senate inquiry points to SG concerns
MEDIA - 04 May 2017 - The Senate Economics Committee has said it is "deeply concerned" about the extent to which employers are failing to pay super guarantee (SG) contributions, with the final report from its inquiry into SG non-payment making 32 recommendations intended to address the issue. More...

AIST supports Senate Committee recommendations
MEDIA – 04 May 2017 - The Australian Institute of Superannuation Trustees (AIST) has welcomed the Senate Committee report recommendations on changes to current super legislation, notably the removal of the $450 threshold and the changes to unpaid super. More...

Review needed on CIPR advice requirements
MEDIA – 04 May 2017 - The Government needs to urgently review their proposed super policies as they are an issue for both higher net worth Aussies and middle Australians, Chartered Accountants believe. Requirements for scaled and intra-fund advice need to be reviewed to determine whether modification of further guidance is needed to facilitate the provision of comprehensive income products in retirement (CIPRs), according to a committee. More...

FSC: PC interim submission
FSC – 03 May 2017 - The Productivity Commission's (PC) interim report is an important step towards introducing genuine competition in the default superannuation market. The Financial Services Council (FSC) recognises the principle that competition policy is in the best interests of consumers is at the core of each of the four models proposed by the Commission. More...

In practice and courts

ARITA: Report on Superannuation Guarantee non-payment
The Senate Economic Reference Committee released its report into Superannuation Guarantee non-payment on 2 May 2017. ARITA was pleased to see that a number of the recommendations made in their submission have been taken up by the Committee. More...

ASFA: Call for submissions on second Insurance in Superannuation Working Group (ISWG) discussion paper
The Insurance in Superannuation Working Group (ISWG) released the third in a series of discussion papers as a further step towards developing a Life Insurance Code of Practice for superannuation trustees. The paper, Member communication and engagement, outlines options to improve member engagement and understanding of their insurance arrangements within superannuation. Submissions close 02 June 2017 (05 May 2017). More...

Report on Superannuation Guarantee non-payment
The Senate Economic Reference Committee released its report into Superannuation Guarantee non-payment on 2 May 2017. More...

ASFA Submissions
10/05/2017 - Submission to the Australian Taxation Office (ATO) - Submission for exercise of the Commissioner's Remedial Powers Superannuation: Transitional Capital Gains Tax (CGT) relief for unsegregated superannuation funds. More...
02/05/2017 - Submission to the Productivity Commission - Superannuation: Alternative default models, draft report. More...

ISA: Productivity Commission: Alternative Default Models - Draft Paper. Risky business
ISA's submission to the Productivity Commission Inquiry into the Alternative Default Models - Draft paper – May 2017. More...

AASB Staff Paper: Modifications to Australian Accounting Standards for Not-for-Profit Entities
Preparers and auditors of not-for-profit financial statements now have the opportunity to better understand the extent and rationale to which Australian-specific modifications have been made to IFRS Standards, following the release of AASB Staff Paper: Modifications to Australian Accounting Standards for Not-for-Profit Entities (11 May 2017).

Draft AML/CTF Rules resulting from the Review of the Act
Public consultation is open until 22 May 2017.

Reminder: Transition period for updated fee and cost disclosures
ASIC has extended the transition period for trustees of superannuation funds and responsible entities of managed funds and other managed investment schemes (issuers) to comply with updated fee and cost disclosure requirements in relation to product disclosure statements (PDSs), until 30 September 2017. More...

Current Consultations and Submissions

Extending Crowd-sourced Equity Funding (CSEF) to proprietary companies – 09/05/2017.

Black Economy Taskforce – 09/05/2017.

ASIC Supervisory Cost Recovery Levy Regulations 2017 – 04/05/2017.

Refining the Insolvency Law Reform Act 2016 – 03/05/2017.

Commonwealth Inquiries

Superannuation Guarantee non-payment
Status: Submissions Closed; Date Referred: 01 December 2016; Reporting Date: 02 May 2017.

Scrutiny of financial advice
Status: Re-referred; Date Referred: 11 October 2016; Reporting Date: 30 June 2017.

Superbad - wage theft and non-compliance of the Superannuation Guarantee
Senate Economic References Committee: 2 May 2017
This report has been prepared by the Senate Economic References Committee, concerned by recent analysis by Industry Super Australia that indicates that employers failed to pay an aggregate amount. The report noted employees were losing over $2,000 in super payments per year on average, with the most vulnerable groups in society most in danger.

The Commonwealth Budget: A Quick Guide
Parliamentary Library Research Publications: Commonwealth of Australia: 08 May 2017.

Cases

Wats v Infosys Technologies Limited Australia [2017] FCCA 866
PRACTICE AND PROCEDURE – Application for summary judgment by Respondent pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 (Cth) and r.13.10(a) of the Federal Circuit Court Rules 2001 (Cth) – in his substantive case the Applicant alleges contravention of s.340 of the Fair Work Act 2009 (Cth) ("the Act") on the basis that he is entitled to the benefit of workplace law, being the Superannuation Guarantee (Administration) Act 1992 (Cth) ("the SGA Act") – held that because of the interaction between the SGA Act, the Superannuation Guarantee (Administration) Regulations 1993 (Cth), the Social Security (International Agreements) Act 1999 (Cth) ("the SSIA Act"), including sch. 31 to the SSIA Act which contains an agreement between India and Australia, the Applicant is not entitled to the benefit of the SGA Act – held that the Applicant did not have a workplace right within the meaning of s.341 of the Act – held that the Applicant has no reasonable prospect of successfully prosecuting the proceeding – application for summary judgment granted.

Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2017] FCA 459
PRACTICE AND PROCEDURE – corporations and securities – financial markets – prime bank bills – bank bill swap reference rate (BBSW) – alleged financial market manipulation concerning artificial prices – ss 1041A and 1041B of the Corporations Act 2001 (Cth) – applications to amend originating process and statement of claim in each proceeding – applications to extend the time for the filing and service of evidence by the defendants – applications to vacate trial date – whether the defendants will suffer prejudice if the existing trial date is not vacated – applications allowed in part.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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