Clear and concise overview of regulatory developments impacting the Australian superannuation system

1. While all care has been taken in the preparation of this information, QMV Solutions takes no responsibility for any loss or damage
suffered from relying on this information. This information is not intended to be financial, tax or legal advice.
April 2018 | Pensions & Superannuation Regulatory Update
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April 2018 In Brief
Major Reform Updates
Financial Complaints &
Dispute Resolution Regime
20 April 2018
Regulations and authorisations
The statutory infrastructure to implement the new Financial Complaints and
dispute resolution regime has been put in place. Key developments
included:
▪ Superannuation trustees will be required to become members of AFCA
(and subject to its terms of reference) by 21 September 2018, prior to
AFCA commencement on 1 November 2018;
▪ Australian Financial Complaints Limited has been authorised to operate
the Australian Financial Complaints Authority (AFCA) as a not for profit
corporation;
▪ the Minister for Revenue and Financial Services announced the
appointment of the Hon. Helen Coonan as Independent Chair of AFCA;
▪ The Treasury Laws Amendment (Putting Consumers First - Establishment
of the Australian Financial Complaints Authority) Regulations 2018 have
been issued, making amendments to ensure that requirements that apply
to ASIC approved EDR schemes or the SCT are replaced with
requirements that apply in relation to the AFCA scheme and repeal
provisions that have become redundant.
QMV recommends that RSEs remain attentive to announcements of
detail in the Terms of Reference of membership and application
process. Trustees can however commence planning for the transition,
including planning for changes to fund publications, communications,
resourcing, processes for managing both schemes in the interim
period, and budgeting for such costs.
🔗Link to Details
The Royal Commission into Banking & Financial Services has been consuming most
of the oxygen, yet the month preceding the Commonwealth Budget saw some important
technical and policy developments.
The statutory framework for the new financial complaints and dispute resolution
regime is now largely in place, with the application process details and terms of reference
still pending. There were minor changes to MAAS, Single Touch Payroll, and the Audit
and Related Matters Prudential Standard.
We also have some insight as to policy announcements in the budget on 8th
May, with
increased corporate penalties and ASIC powers, SMSF SuperStream integration and
maximum membership expansion from 4-6.

2. April 2018 |Pension & Superannuation RegulatoryUpdate
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While all care has been taken in the preparation of this information, QMV Solutions takes no responsibility for any loss or damage
suffered from relying on this information. This information is not intended to be financial, tax or legal advice.
Technical Changes & Updates
ATO Member Attribute
Service (MAAS)
5 April 2018
Legislative Instrument Issued
The ATO has issued Taxation Administration Member Account Attribute
Service - the Reporting of Information relating to Superannuation Account
Phases and Attributes 2018. This sets out the timeframe and way in which
superannuation providers are required to lodge statements in relation to
superannuation account phases and attributes.
The instrument specifies that the MAAS form should be lodged no later than
five business days after the day on which an account is opened or a life
insurance policy is first held, and any changes to the account phases and/or
attributes relating to the account or policy occur.
The legislative instrument applies from 1 April 2018, the date from which
reporting of superannuation account attributes and phases to the ATO in the
MAAS form commences.
Superannuation account phases and attributes include opening and closing
of accounts, defined benefit interest indicator, acceptance of contributions
and government roll-overs.
QMV recommends that superannuation trustees ensure that systems
and procedures (including with outsourced service providers) are in
place to lodge MAAS statements in an accurate and timely manner.
Where unable to satisfy the requirements, RSEs may wish to consider
seeking administrative concessions during the transitional period (1
April 2018 to 31 October 2018).
Single Touch Payroll
18 April 2018
Legislative instrument issued
The ATO has issued the legislative instrument exempting an entity from its
obligations to provide payment summaries and annual reports under the Pay
as you go (withholding) system to the extent that the relevant information
has been reported under Single Touch Payroll.
PAYG Withholding Annual Reporting Exemptions: Single Touch Payroll
Optional Year applies to entities that, on a voluntary basis, report amounts
as prescribed in section 389-5 of Schedule 1 to the Taxation Administration
Act 1953 for all or part of the period between 1July 2017 to 30 June 2018 by
no later than 14 August 2018.
QMV suggests that this change is likely to have limited direct impact
on superannuation trustees (except in their capacity as employers).
Superannuation funds with close working relationships with employer
sponsors may wish to communicate the details to such employers.
Audit & Related Matters
Prudential Standard
18 April 2018
Determination issued
APRA has updated Prudential Standard SPS 310 - Audit and Related
Matters, removing the requirement for the auditor’s report to provide limited
assurance addressing the RSE licensee’s compliance with its operational
risk financial requirement (ORFR) strategy. The change commenced on 1
May 2018.
The requirement was considered unnecessary, given the existing
responsibilities of the auditor to provide reasonable and limited assurance in
their audit as set out in paragraph 19 of SPS 310.
APRA also released a letter to superannuation RSE licensees regarding the
change.
QMV suggests that superannuation trustees engage with auditors to
ensure that the change is considered when setting the scope of fund
audit activities.
🔗Link to Details
🔗Link to Details
🔗Link to Details

3. April 2018 |Pension & Superannuation RegulatoryUpdate
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While all care has been taken in the preparation of this information, QMV Solutions takes no responsibility for any loss or damage
suffered from relying on this information. This information is not intended to be financial, tax or legal advice.
Policy & Guidance
Total Superannuation
Balance and Duplicate
Accounts
20 April 2018
Discussion paper issued
The ATO has released a discussion paper on duplicated accounts included
in the calculation of total superannuation balance.
Total superannuation balance is calculated using amounts from both
member contribution statements (MCS) and transfer balance account report
(TBAR) forms. There is currently a known issue where an individual’s total
superannuation balance has duplicated accounts. This duplication results in
an inflated total superannuation balance displayed for the member on ATO
Online. To avoid duplication of amounts included on both forms, the ATO’s
systems use a matching process.
The discussion paper sets out seven reporting scenarios where an amount
is duplicated due to MCS and TBAR not matching and advises funds of the
remediation required to correct their member’s total superannuation balance
calculation.
QMV recommends that superannuation trustees ensure that the
discussion paper is reviewed and appropriate adjustments made to
systems and administrative procedures.
SMSF Transfers via
SuperStream
20 April 2018
Policy Announcement
The Minister for Revenue and Financial Services has indicated two changes
for SMSFs that will be included in the Federal Budget.
▪ the current limit on the maximum number of members in an SMSF will
increase from four to six.
▪ SMSF members will be able to initiate and receive roll-overs
electronically between an APRA-regulated fund and their SMSF.
The Minister also indicated other changes will be included in the Budget, but
not in relation to the taxation of superannuation.
QMV recommends that superannuation trustees note the possible
impact on member transfer flows of the planned change to enable
transfer requests to be initiated by SMSFs via the SuperStream
infrastructure.
Executive Remuneration
4 April 2018
APRA Review Report
APRA released the results of a review of remuneration practices at large
financial institutions which found considerable room for improvement in the
design and implementation of executive remuneration structures.
The review examined whether policies and practices in regulated institutions
were meeting the objectives of APRA’s prudential framework: that
remuneration frameworks operate to encourage behaviour that supports risk
management frameworks and institutions’ long-term financial soundness.
APRA's review comprised detailed analysis of executive remuneration
practices and outcomes from a sample of 12 regulated institutions across
the authorised deposit-taking institutions (ADIs), insurance and
superannuation sectors.
QMV recommends that superannuation trustees review APRA’s report,
and consider the finding when reviewing executive remuneration
policies and practices.
🔗Link to Details
🔗Link to Details
🔗Link to Details

4. April 2018 |Pension & Superannuation RegulatoryUpdate
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While all care has been taken in the preparation of this information, QMV Solutions takes no responsibility for any loss or damage
suffered from relying on this information. This information is not intended to be financial, tax or legal advice.
Corporate & Financial
Misconduct Penalties
20 April 2018
Policy announcement
The Commonwealth Government announced a policy of strengthening
criminal and civil penalties for corporate misconduct and boosting the
powers of ASIC, in response to corporate and financial misconduct.
The Government will increase and harmonise penalties for the most serious
criminal offences under the Corporations Act to a maximum of:
For individuals:
▪ 10 years’ imprisonment; and/or
▪ the larger of $945,000 OR three times the benefits;
For corporations:
▪ the larger of $9.45 million OR
▪ three times benefits OR 10% of annual turnover.
The Government will expand the range of contraventions subject to civil
penalties, and also increase the maximum civil penalty amounts that can be
imposed by courts, to the maximum of:
▪ the greater of $1.05 million (for individuals, from $200,000) and $10.5
million (for corporations, from $1 million); or
▪ three times the benefit gained or loss avoided; or
▪ 10% of the annual turnover (for corporations).
ASIC’s powers will also be significantly increased through:
▪ expanding their ability to ban individuals from performing any role in a
financial services company where they are found to be unfit, improper, or
incompetent;
▪ strengthening their power to refuse, revoke or cancel financial services
and credit licences where the licensee is not fit or proper;
▪ boosting ASIC’s tools to investigate and prosecute serious offences by
harmonising their search warrant powers to provide them with greater
flexibility to use seized materials, and granting ASIC access to
telecommunications intercept material.
QMV recommends that superannuation trustees are aware of the
proposed changes, and remain attentive to legislative developments in
the area. These proposed changes affirm the importance of having
appropriate risk and compliance culture, systems and procedures
within superannuation providers.
Royal Commission Paper
5 April 2018
Background Paper
The Royal Commission into Misconduct in the Banking, Superannuation
and Financial Services Industry has released Background paper 7 - Legal
Framework for the Provision of Financial Advice and Sale of Financial
Products to Australian Households.
This Background Paper provides a thorough overview of the existing
framework, which may prove to be a useful reference for
superannuation funds and other AFS licensees.
🔗Link to Details
🔗Link to Details

5. April 2018 |Pension & Superannuation RegulatoryUpdate
advisory | delivery | professional resources
While all care has been taken in the preparation of this information, QMV Solutions takes no responsibility for any loss or damage
suffered from relying on this information. This information is not intended to be financial, tax or legal advice.
More Questions or Need Support?
QMV partners with superannuation fund trustees and
administrators to adapt to changes in the legal and
regulatory environment.
If you have any questions or need assistance, you can
contact me directly at jsteffanoni@qmvsolutions.com
Jonathan Steffanoni, Principal Consultant, Legal & Risk