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Regulators outline responsibilities for funds in response to COVID-19
APRA and ASIC have today outlined some of the key challenges and responsibilities for super trustees in response to COVID 19.
In the letter, published on ASIC’s and APRA’s respective websites, the two regulators outline their expectations of funds about liquidity, communications, insurance, and fraud. They also confirm that a range of new and planned regulatory initiatives are being postponed as a result of COVID 19.
The letter notes that a key focus of the regulators is monitoring liquidity to ensure funds retain the means to fulfil their payment obligations, including the early release of superannuation payments recently announced by the Government.
It says that trustees should be:
Trustees should also ensure that the valuation of unlisted and illiquid assets remains appropriate and consider whether any assets need to be revalued.
On communication, the regulators have reminded trustees of the need to communicate often, clearly and accurately to their members in uncertain times.
“To ensure consistency of messaging for Australians, trustees should have regard to official Government information sources related to COVID-19 and its financial impacts, such as Treasury, the Australian Tax Office or ASIC’s MoneySmart website,” the letter says.
In addition to proactively communicating with members, the regulators are also reminding funds to respond promptly, clearly and accurately to members’ questions. “In particular, being able to draw on complaints information to action and adjust communications and resourcing to meet member needs is likely to be key at this time,” the letter says.
The regulators have also noted the potential for more fraud and phishing during these unsettled market conditions including through member misunderstandings concerning the early release of superannuation initiative. “The changed operating environments within organisations may also leave funds and their members more exposed to cyber-risk. Trustees are advised to be even more vigilant about their members’ interests and promptly share intelligence with the regulators.”
In addition to the letter, APRA and ASIC have published superannuation frequently asked questions (FAQs) on each agency’s website. These FAQs will be updated periodically over the coming weeks and months and we encourage trustees to check the page regularly.
APRA’s FAQs can be found here.
ASIC’s FAQs can be found here.
ATO addresses questions about early release measures
The ATO has today published an online CRT alert to clarify the role of super funds with COVID-19 early release measures.
The alert which links to Q&As includes more details on the role of funds and their responsibilities involving the new early release measures, particularly in regard to fraud.
The ATO has confirmed it will be responsible for vetting member’s eligibility for the new scheme via self-assessment. Individuals will be warned during the application process about the penalties that apply to them if making a false and misleading statement. Any particular cases of concern will be managed by the ATO with the individual.
For any questions, email: FSEGovernance@ato.gov.au
ATO encourages funds to provide updated account balances
The ATO has issued communications encouraging all funds to provide members with updated account balances, ahead of the commencement of coronavirus early release of super measure.
The ATO issued an alert with further information in response to several requests by super funds.
Although not a requirement to re-report balances, funds, the ATO agrees that a more current balance may assist members in financial hardship to determine which account or accounts and how much they would like to request for release under the new measure.
The ATO says current balances of members will be displayed on the Fund Details screen on ATO Online within 24-48 hours of processing. The member will see the balance, together with the ‘balance date’.
Funds wishing to report updated account balances for members should contact the ATO by emailing SPRFundReporting@ato.gov.au by COB Friday 3 April.
Super obligations on JobKeeper payment scheme
Treasury has outlined how Super Guarantee payments will apply to the JobKeeper Scheme.
According to a newly-published Treasury fact sheet for employers and employees, employers must continue to pay the SG on regular wages (even if the funds for those payments are received by employers through the Jobkeeper program) but it is up to the employer whether they pay superannuation on additional Jobkeeper payments.
Under the JobKeeper program eligible employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. Eligible employees – be they full time, part-time or recently stood down employees - will receive from their employers a minimum of $1,500 per fortnight, before tax. Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the payment.
For super payments to employees in excess of an employee’s usual wages, Treasury says: ‘It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment’.
For example, a worker who ordinarily receives $1,000 a fortnight plus superannuation would receive the $1,500 JobKeeper payment, with superannuation paid on the first $1,000 and the employer able to decide whether to pay it on the additional $500.
For employees who have been stood down without pay it is understood that superannuation will not be required to be payable on the $1,500 JobKeeper Payment.
Legislation giving effect to the JobKeeper Payments will be required and has not yet been released.
ASIC grants conditional time-relief on derivative transaction reporting rules
ASIC has granted conditional time-limited relief until 30 September 2022 from two elements of the ASIC Derivative Transaction Rules (Reporting) 2013.
ASIC Corporations (Amendment) Instrument 2020/242 instrument was registered on the Federal Register of Legislation on Friday 27 March 2020.
Broadly, the instrument extends conditional relief to Reporting Entities:
The relief allows ASIC to propose and finalise UTI requirements within amended rules. New UTI requirements will be developed to implement the CPMI IOSCO Technical Guidance on Harmonisation of the Unique Transaction Identifier (UTI Technical Guidance) and, where possible, align with the requirements of key jurisdictions.