Welcome to the latest issue of the KHQ Super Alert. It was a busy week in Parliament this week with the Bill to include superannuation contributions on Government paid parental leave passing, and the introduction of a new Bill to reform the privacy laws. Treasury also released further information about the Government’s ‘Payday Super’ design and draft regulations relating to exiting legacy retirement products.

Parliament – Bill to include superannuation on paid parental leave passed

On 19 September 2024, the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 was passed by both Houses of Parliament. As referred to in our Super Alert of 23 August 2024, the Bill adds superannuation contributions to payments received via the Commonwealth-funded Paid Parental Leave Scheme on or after 1 July 2025.

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Federal Court – Decision in relation to allegedly misleading rollover statements

On 18 September 2024, the Federal Court handed down its decision in Australian Securities and Investments Commission v Retail Employees Superannuation Pty Ltd [2024] FCA 1081. The 953-paragraph judgment considers whether the relevant trustee made misrepresentations to members (in forms, phone calls and in written correspondence) in relation to their ability to make rollovers to other super funds. ASIC alleged that contraventions of section 1041H of the Corporations Act and sections 12DA(1) and 12DB(1)(i) of the ASIC Act had occurred.

The Federal Court ultimately rejected ASIC’s application on the basis that the various statements made by the trustee were based on reasonable grounds and were not false or misleading or deceptive or likely to mislead or deceive. In an associated media release, ASIC advised that it is considering its options to lodge an appeal to the Full Court.

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Treasury – Further ‘Payday Super’ design information

On 18 September 2024, Treasury published a fact sheet which ‘provides further implementation details about the Government’s Payday Super measure, part of the Securing Australians’ Superannuation Package announced in the 2023-24 Budget’. As referred to in our Super Alert of 13 October 2023, Treasury released a consultation paper last year in relation to the range of policy design elements proposed to implement this measure. This latest fact sheet provides further information about the design elements.

In an associated media release, the Treasurer, the Hon Dr Jim Chalmers MP, announced that the ‘[l]egislative design [for the proposal] will progress through the second half of 2024 ahead of draft legislation being released for consultation’.

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ASIC – Sustainability reporting guidance materials released

On 18 September 2024, ASIC issued a media release encouraging relevant entities to start preparing now to comply with the new annual sustainability reporting requirements which were made law as part of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth). ASIC has created a ‘dedicated sustainability reporting page’ to assist entities with compliance.

For RSE licensees with $5 billion or more in assets under management, the first reporting period will commence from 1 July 2026 (which means the first annual sustainability report will be published around September 2027).

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Treasury – Draft regulations relating to legacy retirement products

On 17 September 2024, Treasury released exposure draft regulations called the Treasury Laws Amendment (Self-managed superannuation funds—legacy retirement product conversions and reserves) Regulations 2024. The purpose of the regulations is ‘to allow individuals to exit certain legacy retirement products’ such as ‘legacy lifetime, life expectancy and market-linked superannuation income stream products that commenced prior to 20 September 2007’. The regulations propose special rules in relation to the application of the contribution caps if a product is exited and reserves are used to provide capital ‘that would otherwise be locked in the system’.

The consultation period closes on 8 October 2024.

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ASIC – Speech in relation to importance of compliance professionals

On 17 September 2024, ASIC published a speech delivered by its Chair, Joe Longo. Mr Longo’s speech focuses on the important strategic role of compliance professionals and includes the following comments:

• ‘the items stacked on the compliance professional’s desk have dramatically multiplied in the last five to 10 years…[t]his is why, as industry adjusts to new requirements, [ASIC’s] approach has generally been to take a pragmatic and proportionate approach to supervision and enforcement during the transition phase of any implementation’; and
• ‘So, what are the elements of such a culture?…What’s needed is an attitude of compliance, based on a curious mind that asks the right questions. Questions like What are our obligations? What are the risks? How can we manage them? What systems and controls should be in place to ensure we meet our obligations? Is what we are doing both legal and ethical? How can we make sure they’re being followed? Do I have an open line to the board? Am I keeping them informed’.

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ATO – New ruling and guidance note for first home super saver scheme

On 16 September 2024, the ATO issued new Taxation Ruling 2024/4 First home super saver scheme and Guidance Note 2024/1 First home super saver scheme. The ATO had withdrawn Law Companion Ruling 2018/5W First home super saver scheme a few days earlier in anticipation of the new tax ruling. The new materials were required as a result of changes made to the first home super saver scheme rules by the Treasury Laws Amendment (2023 Measures No. 3) Act 2023 (Cth).

Click here, here, here, and here for details,

Legislation – Regulations related to Quality of Advice reforms registered

On 16 September 2024, the Treasury Laws Amendment (Delivering Better Financial Outcomes) Regulations 2024 (Cth) were registered on the Federal Register of Legislation. These regulations support the changes made to various laws by the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (Cth) (the Amending Act). As referred to in our Super Alert of 5 April 2024, this Act introduces the first set of accepted recommendations from the Quality of Advice Review.

According to the explanatory statement, the purpose of these regulations includes to:

• ‘support written information or documentation requirements for the purposes of section 99FA of the [SIS Act] to continue to be met electronically’;
• ‘remove requirements related to Fee Disclosure Statements, update record keeping obligations for new consent requirements and remove or update references to civil penalties which are removed or updated by the Amending Act’;
• ‘align requirements for Financial Services Guides and Website Disclosure Information and make other consequential amendments’; and
• ‘streamline relevant regulations of the Corporations Regulations for conflicted remuneration in line with the changes made by the Amending Act’.

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OAIC – Latest notifiable data breaches report released

On 16 September 2024, the OAIC published the notifiable data breaches report for the January to June 2024 period. According to the OAIC, ‘the number of data breaches notified to the regulator in the first half of 2024 was at its highest in three and a half years’. The OAIC considers that ‘[p]rivacy and security measures are not keeping up with the threats facing Australians’ personal information and addressing this must be a priority’.

In relation to the financial sector (which includes superannuation), 58 notifiable data breach notifications were received in this 6 month period. While 57% of breaches in the financial sector were identified by the relevant entities in less than 10 days, it took more than 30 days to notify the OAIC for 31% of breaches.

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Parliament – Bill proposing various privacy reforms released

On 12 September 2024, the Privacy and Other Legislation Amendment Bill 2024 (Cth) was introduced into the House of Representatives. The Bill proposes to make various changes to the Privacy Act 1988 (Cth) such as increasing civil penalties and introducing a statutory tort for serious invasions of privacy.

Our colleague, Alex Dittel, in KHQ’s Data Privacy, Cyber and Digital practice has summarised the various proposed changes an article, which can be accessed by clicking here.

Click here for details.

Legislation – Regulations in relation to Payment Times Reporting Scheme registered

On 12 September 2024, the Payment Times Reporting Rules 2024 (Cth) were registered on the Federal Register of Legislation. As referred to in our Super Alert of 26 July 2024, these regulations were released in draft form in July as part of a Treasury consultation. These regulations support the implementation of the Payment Times Reporting Amendment Act 2024 (Cth) which was passed by Parliament in July.

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