Super alert – June 3, 2022

Welcome to the latest edition of the KHQ Super Alert. This week, APRA and ASIC released new FAQs on the Retirement Income Agreement, AFCA finalized its new funding model after industry consultation, and another decision was made on a request for court advice on trustee’s compensation.

APRA and ASIC – Retirement Income Agreement FAQs published

On June 1, 2022, APRA published five FAQs “to assist Registerable Superannuation Entity (RSE) licensees in developing their retirement income strategies to meet the requirements of the Retirement Income Agreement.” The FAQ was developed with input from APRA and ASIC following the release of a joint letter on March 7, 2022 to implement the Retirement Income Agreement of both regulators.

The five questions are:

  • What are APRA’s expectations for RSE licensees in terms of developing their retirement income strategy and meeting the requirements of the Retirement Income Agreement by July 1, 2022?
  • Can RSE licensees submit draft retirement income strategies to APRA for feedback before July 1, 2022?
  • What do RSE licensees need to do as of July 1, 2022 to implement their retirement income strategies?
  • Are there already guidelines for verifying the outcomes of retirement income products?
  • Can the retirement income strategy include the provision of financial product advice? (response from ASIC)

click here for details.

AFCA – Financing model finalized after industry consultation

On May 31, 2022, the AFCA announced that “the vast majority of financial firms will pay the same amount or less to the Australian Financial Complaints Authority under a new user-paid funding model to be introduced from July 1, 2022”. AFCA reports that the new model “has been approved by the independent AFCA Board of Directors following an extensive consultation process with users of the external dispute resolution system and leading industry bodies” (as per our Super Alert of March 18, 2022).

click here and here for details.

Supreme Court of NSW – Request for Legal Advice

On May 27, 2022, the New South Wales Supreme Court rendered its decision SCS Super Pty Limited has reapplied to the Australian Catholic Superannuation and Retirement Fund [2022] NSWSC 686. The court found that the trustee was “reasonably entitled to exercise the amending power” to “insert a new trustee fee clause giving the trustee the right to charge fees and allocate a fee from the fund for acting as trustee of the fund raise’.

click here for details.

Treasury – Consultation on proposed regulatory levies on financial institutions

On May 27, 2022, the Treasury Department released a Discussion Paper requesting submissions on the “Proposed Financial Regulatory Levies for Fiscal Year 2022-23.” The levies are intended to “cover APRA’s operating costs and other specific costs incurred by certain Commonwealth authorities, including the Australian Securities and Investments Commission, the Australian Taxation Office and the Australian Competition and Consumer Commission”. The consultation period ends on June 10, 2022.

click here for details.

ATO – Account transfer reporting

On May 27, 2022, the ATO issued CRT Alert 007/2022 “Transfer Balance Account Reporting Updates”. According to the ATO, the ‘Treasury Laws Amendment (Enabling Conversion of Certain Streams of Income) Regulations 2022 relating to the transfer balance ceiling (TBC) were recently adopted and came into force on April 5, 2022” (as in our Super Alert of April 8, 2022). This means members can act now [the ATO’s] Conversion Authority in Relation to Certain Old-Age Pensions and Market-Related Income Streams”.

click here for details.

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