Holding Redlich © 2022
15 February 2022
#Superannuation, Funds Management & Financial Services
Published by:
Michael O’Connor
APRA released six frequently asked questions (FAQs) to provide further guidance to trustees for phase 1 of the Superannuation Data Transformation (SDT) project. The new FAQs are:
ASIC published its findings from a review of the provision of default income protection cover by five trustees.
ASIC’s review found that:
Addressing these findings, ASIC recommends trustees:
APRA published its 2021 MySuper and Choice Heatmaps with the below key insights.
MySuper Heatmap:
Choice Heatmap:
APRA has released its key superannuation statistics for the 2021 financial year, which includes:
Key statistics for the superannuation industry as at 30 June 2021
Key statistics for entities with more than four members for the year ended on 30 June 2021
The Act received royal assent on 7 December 2021 and incorporates minor technical amendments to section 120 of the SIS Act so that the appointment of a restructuring practitioner is considered to be an insolvency event that triggers the disqualification of a trustee, custodian or investment manager from managing a superannuation entity.
The Act also amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 (Cth) (SUMLM Act) to:
APRA released, for consultation, its proposed amendments to APRA Prudential Standard SPS 310 Audit and Related Matters (SPS 310) to align with changes to APRA’s reporting standards for superannuation. The proposed changes include:
Submissions are due by 11 March 2022.
The Regulations amend the SIS Regulations to expand the range of information that trustees must make publicly available on their funds’ websites to include a summary of how voting rights attached to shares in listed companies that the trustee holds have been exercised.
The Regulations support the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020 (Cth) (WA Superannuation Splitting Act) by ensuring that any provisions in regulations governing superannuation splitting under the Family Law Act 1975 (Cth) also apply to superannuation splits made by de facto couples in Western Australia.
The Regulations extends to pooled superannuation trusts to provide annual reports on their websites, which were previously only available to regulated superannuation funds. The Regulation also exempts trustees from specific reporting requirements for periodic statements when the following circumstances apply:
Nine trustees, over December and January, made separate applications to courts in different states seeking either judicial advice or court orders enabling the trustees to amend various trust deeds (in various manners) in order to ensure that they could charge trustee fees, in response to the changes to sections 56 and 57 of the SIS Act, which took effect as of 1 January 2022.
Despite the differences in jurisdictions, particular fact scenarios and questions asked of the different courts, the following could be regarded as being consistent in most, if not all, cases:
Avanteos Investments Limited (Avanteos) pleaded guilty to 18 criminal charges relating to failures to update defective disclosure statements and continuing to charge fees to deceased superannuation members.
In early 2016, Avanteos received legal advice that it did not have the authority to deduct fees from superannuation members after their death. Despite this, Avanteos did not update its disclosure statements and between 6 January 2016 and 1 May 2018, disclosure statements for 18 superannuation products issued by Avanteos were defective as they failed to tell superannuation fund members they would be charged adviser service fees after their death.
As a result of the offending, 499 deceased members with funds in these superannuation products were charged almost $700,000 in fees by Avanteos when it was not entitled to do so. Avanteos has remediated all affected customers.
This matter is the first criminal prosecution under section 1021J(1) of the Corporations Act. It is an offence for the preparer of a disclosure document or statement to not take reasonable steps to ensure that a defective disclosure document is not distributed or is not accompanied by information that corrects the deficiency.
The matter is next listed for sentencing on 1 June 2022.
Our comments
There is often a fine line between the marketing and compliance side of a disclosure document. This case demonstrates that compliance must come first in all cases.
ASIC has commenced civil penalty proceedings in the Federal Court against superannuation trustee OnePath Custodians Pty Ltd (Trustee) for allegedly charging fees for no service and making false and misleading representations to fund members.
The particular conduct alleged includes:
The date for the first case management hearing is yet to be scheduled by the Court.
Authors: Luke Hooper & Michael O’Connor
Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
Published by:
Michael O’Connor
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The Australian Securities and Investments Commission (ASIC) has released its latest Corporate Plan, outlining its strategic priorities for the next four years. The Corporate Plan provides transparency on the regulator’s approach to new trends and initiatives in the financial market, and insights into how the regulator will effectively tackle product design and distribution, sustainable finance, retirement decision-making and technology risks over the coming years.
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