The Productivity Commission has given its report on the efficiency and competitiveness of superannuation to the Government. Though it might not be released before the next Federal election.
Update: The Government has released the Productivity Commission report, but is waiting for the final report of the Banking Royal Commission before giving its response to the recommendations.
The Productivity Commission says it handed the final report of its inquiry into the efficiency and competitiveness of Australia’s superannuation system to the Government on 21 December 2018.
The Government is calling for submissions for its brought forward 2019/20 Federal Budget, which is expected to be held in early April.
“The Government is seeking submissions from individuals, businesses and community groups on their views regarding priorities for the 2019-20 Budget,” said a statement from Assistant Minister for Treasury and Finance Zed Seselja.
The ATO has warned SMSF auditors that, in its view, no safeguards can reduce the threats to auditor independence from reciprocal auditing arrangements.
The ATO says that “blatant independence breaches”, including an auditor auditing their own SMSF, has attracted the attention of the tax office in the past. But the ATO’s focus has broadened to include “other less obvious independence risks”.
Superannuation funds are at risk of their first calendar year of investment losses since 2011.
SuperRatings said November was the third consecutive month of investment losses for superannuation funds. They found the median balanced option (accumulation) was down 0.6% for November, and down 1.2% for the financial year to the end of November – putting super fund members at risk of their first annual calendar year loss in seven years.
SMSFs are likely to switch from Australian shares to international equities if Labor’s plan to stop refunds of dividend franking credits goes ahead.
Labor plans to stop refunds of excess franking credits for most taxpayers, with exemptions for Age Pensioners and some SMSFs.
A survey of SMSF trustees by SuperConcepts has found that 72% of respondents plan to change their investment strategy in response to the loss of franking credit refunds.
A Labor Government would make it easier for employees to pursue unpaid superannuation without depending on the ATO.
At the Labor National Conference it was announced that Labor would include superannuation in the National Employment Standards. The National Employment Standards are, currently, a set of 10 minimum worker entitlements – including maximum weekly hours and annual leave.
Shadow Treasurer Chris Bowen said this would give all employees the power to chase their unpaid super.
Satisfaction with the financial performance of industry and retail super funds has continued to fall, after falling as the Financial Services Royal Commission turned its attention to superannuation.
According to the latest Roy Morgan figures, 61.8% of industry fund members as satisfied with the financial performance of their fund, compared to 58.2% of retail funds. This is down 0.3% for industry funds compared to August 2018 and down 1.0% for retail funds. Though compared to a year earlier industry funds are up 2.7% and retail funds up 1.3%.
The SMSF Association is calling for CPD from a professional association to be automatically approved by licensees by under new Financial Adviser Standards and Ethics Authority (FASEA) rules.
The SMSF Association says FASEA should do this to achieve “consistency, clarity and simplicity”.
Total superannuation assets increased relatively slightly in the September 2018 quarter.
According to recently released APRA figures, there is now $2.759 trillion in superannuation as at the end of September 2018. This is up $40.4 billion since June 2018 and up $223.10 billion from September 2017.
APRA has moved ahead of the Parliament in introducing an outcomes test for large superannuation funds.
APRA released a package of new and enhanced prudential requirements, which it says are designed to focus large super funds trustees on delivering quality outcomes for members.
APRA Deputy Chairman Helen Rowell said the regulator was committed to lifting standards in the superannuation industry, to the benefit of members.