More superannuation and SMSF news.

Status of current superannuation Bills

Last updated: 30/09/2020.

Passed superannuation legislation

Superannuation-related legislation that has passed the Parliament.

Last updated: 30/09/2020

Current status of government superannuation policies

The status of government superannuation policies in development and implementation.

Currently before Parliament

  • Increase SMSF member cap to 6
  • Was included in the Liberal Party’s list of election policies. Prior to that, was included in a Bill put to the Parliament before the election, but removed by amendment. Legislation would need to be reintroduced to Parliament.
  • On 30 June 2020, the Government revised the start date from 1 July 2019 (which had already passed) to from “Royal Assent of the enabling legislation”. At the time of announcement the enabling legislation was not before the Parliament.
  • Introduced to Parliament in a Bill in early September 2020, yet to pass.

Newly announced

Unknown

From the 2019/20 Budget

  • Streamlining ECPI
    • Announced in the 2019/20 Budget, this change is meant to apply from 1 July 2020, This would include allowing super funds in both accumulation and retirement phases to be able to choose the method of calculating ECPI, and removing a redundant requirement for super funds fully in retirement phase and using the proportionate ECPI method to obtain an actuarial certificate. Draft legislation has yet to be released.
    • On 30 June 2020, the Government announced the start date would be pushed back from 1 July 2020 to 1 July 2021. Legislation still needs to be passed through Parliament for this change.
  • Raising Work Test age
    • It is proposed that, from 1 July 2020, people aged 65 or 66 will be able to make voluntary super contributions without having to meet the ‘work test’. Announced as part of the 2019/20 Budget, this has yet to be legislated.
  • Raising age limit for spouse contributions
    • The Government has proposed increasing the age limit for spouse contributions would be increased from 69 to 74. This has yet to be legislated.
  • Superannuation Consumer Advocate

Delayed

  • Retirement Income Covenant
    • The Retirement Income Covenant involves a change to the SIS Act to add a new covenant – requiring funds to have a retirement income strategy. This was announced in the 2018/19 Budget and was to start on 1 July 2020. But in May 2020 it was announced it was to be delayed to an unspecified date. According to the Economic and Fiscal Update July 2020 the new start date will be 1 July 2022 – the same date as the related Comprehensive Income Product for Retirement (CIPR). In May, Assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume said the deferral was “necessary to allow continued consultation and legislative drafting to take place following the Coronavirus crisis” and “will also allow drafting of this measure to be informed by the Retirement Income Review”. “Of course, there is nothing stopping funds and their trustees from developing retirement income strategies now and we’d encourage them to do so.  Trustees don’t need to wait for us to legislate the Covenant,” Hume said.

Recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

On 8 May 2020 the Government announced a 6 month “deferral” of the implementation of its responses to the Royal Commission, due to COVID-19.

  • 3.1 – No other role or office for trustees of super funds. The Government said it would “address the risks” of dual regulated entities with such a prohibition. Legislation to be introduced by 30 June 2020.
  • 3.2 – Ban on deducting advice fees from MySuper accounts. Legislation to be introduced by 30 June 2020.
  • 3.3 – Limits on deducting advice fees from Choice product accounts. Government agreed, “consistent” with requirements around ongoing fee arrangements. Legislation to be introduced by 30 June 2020.
  • 3.4 – Prohibition on ‘hawking’ of superannuation products. Legislation to be introduced by 30 June 2020.
  • 3.5 – A person should have only one default account. The Government agreed with the recommendation, but there is no details on the method or any timeframe for it to be implemented. The Government says the recommendation will be “considered in the context” of related recommendations from the Productivity Commission – which the Government has had since late 2018 and to which it has yet to respond.
  • 3.8 – Adjustment to roles of APRA and ASIC in respect of superannuation. Legislation to be introduced by 30 June 2020.
  • 3.9 – Extend Banking Executive Accountability Regime (BEAR) to large super fund trustees (RSEs). Legislation to be introduced by 31 December 2020.

The above list is not exhaustive and based on publicly available information.

Last updated 30/09/2020.