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Early release applications edge towards 1 million mark
More than 900,000 applications have been made to the ATO for early release withdrawals, with more than $7.5 billion approved for release, according to the Assistant Minister for Superannuation, Senator Jane Hume.
Speaking on the Sunrise morning news program, Senator Hume said the numbers were “in line with Government expectations”, with the average withdrawal at $8,333.
In a media release today, AIST noted that profit-to member super funds were reporting a smooth implementation of early release payouts after ten days of meeting requests from financially distressed members.
This follows a meeting hosted this week by AIST attended by a range of our member funds. The funds reported that the extensive work undertaken in short-time frames to meet the unexpected policy change had been effective and that their approach to managing liquidity had successfully ensured they could meet the anticipated increase in early release requests.
Meanwhile in an interview on Sky News today, Liberal Senator Andrew Bragg reiterated that he would like to see the rules around access to early release super be made permanent.
Noting that “over the long run, the age pension will provide income for people in retirement,” Senator Bragg said super should be available to Australians in times of need.
Responding to Senator Bragg’s comments in the same interview, Labor MP Anika Wells said early release super should be a last resort, adding that many retail workers in their 60s and 70s were working indefinitely as they were worried they would not have enough money to retire on.
In other early release news, Treasury has responded to questions about their approach to the early release of super measures in the Senate hearings into the Government’s response to the COVID-19 crisis.
Responding to questioning from Senator Kristina Keneally about potential risks associated with the ATO’s self-verification process with the early release measures, Treasury representative Ms Jenny Wilkinson said Treasury had provided advice to Government about not only the risks but also the risks of having a more elaborate, more intensive application process.
“Inevitably, there's been a balance that's had to be struck between providing streamlined processes that enable people to get access to funds as efficiently as possible, taking into account the pressures on the delivery agencies, on both the ATO and Services Australia—so using their existing auditing and assurance systems as much as possible while maintaining a process which enables decisions to be made as quickly as possible, in order to support the community through this time,” Ms Wilkinson said.
Responding to a question from Senator Rex Patrick about the impact on super balances with members accessing super in a depressed market, Treasury’s Robert Jeremenko said that it was a trade-off the Government had to balance in order to provide people with access to money during the crisis.
“Yes, it will have an effect on their retirement balance—there is no question about that—and, yes, we are in a severe economic shock, but that was considered by Government in making the change to the early release mechanism,” Ms Jeremenko said.
The full transcript can be read here
And finally, Treasury has amended the Retirement Savings Accounts Regulations 1997 and the Superannuation Industry (Supervision) Regulations 1994 in order to change the criteria for early release of superannuation that applies for certain skilled temporary visa holders.
ASIC extends compliance deadline for PDS updates on fee and cost disclosure
Transitional arrangements for new RG97 disclosure requirements are to be amended by ASIC, allowing entities effectively a further two years to comply PDS updates on the RG 97 fee and cost disclosure regime.
In a letter sent to industry associations, ASIC clarified that compliance with the new disclosure regime will apply to any PDS given on or after 30 September 2022, with opt-in arrangements to commence from 30 September 2020.
Requirements were previously due to commence for PDSs issued on or after 30 September 2020 without early opt-in arrangements and no ‘hard’ comply by date. The new disclosure requirements are still expected to apply for periodic statements for a reporting period that commences on or after 1 July 2021.
ASIC also plans to release updated FAQs in response to questions from the industry about the issuance of Significant Event Notices and updated PDSs to reflect early release measures and other flow on effects driven by COVID-19.
ASIC has a dedicated page for trustees providing details of the specific activities that have been deferred and also a superannuation FAQs page.
AIST will be providing updates to members as and when there are updates to these pages.
ASIC urges closer collaboration of life insurers and trustees
ASIC has outlined its expectations of life insurers during the COVID-19 crisis saying it expects life insurers to work closely with trustees to communicate proactively, clearly and accurately with consumers about their life insurance cover.
In a letter issued by ASIC to life insurers, ASIC says life insurers have a role to play in ensuring “trustees understand how members’ insurance may be affected by the economic conditions and public health restrictions”.
This includes understanding the impact on policy clauses relating to employment, work hours, effects of accessing super benefits early and exclusions.
Recognising the rapidly changing situation, ASIC has warned life insurers that they must act in a manner that is efficient, honest and fair. The regulator says it expects that consumers will have their claims lodged and assessed with minimal delay.
This may require insurers to adjust usual practices where Government requirements or recommendations are in place due to the COVID-19 pandemic, including using local medical professionals for assessments to avoid lengthy travel, or using video consultations.
Modern Slavery statement deadline temporarily extended
The Australian Government has extended the deadline for entities to submit their Modern Slavery statements by an additional three months for all entities whose reporting periods end on or before 30 June 2020.
This extension assists entities to meet their obligations under the Act by providing them with additional time to assess changing modern slavery risks linked to COVID-19 and prepare and submit their modern slavery statements.
The extension only changes the deadline for submission of modern slavery statements and does not alter the reporting periods for entities, which remain unchanged.
The Australian Border Force has developed guidance for entities impacted by the COVID-19 pandemic about how to report under the Modern Slavery Act 2018 and key actions entities can take to reduce the risk of vulnerable workers in their operations and supply chains becoming exposed to modern slavery as a result of COVID‑19.
You can contact the Modern Slavery Business Engagement Unit in the Australian Border Force for advice about reporting on the impacts of COVID-19 at email@example.com.
ASIC releases latest enforcement action data
ASIC has today released its enforcement update report for the period 1 July 2019 to 31 December 2019.
The report provides an overview of ASIC’s enforcement work and current strategy. Enforcement priorities for 2019-21 are:
ASIC’s latest report provides figures on its enforcement results across the areas of corporate governance, financial services, markets and small businesses.