Act of Parliament assented to - Act No. 40 of 2019

Overview

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 was assented to by His Excellency the Governor-General on 5 April 2019, following its passage through both the Senate and the House of Representatives. This Act is designed to amend the existing superannuation laws in Australia, focusing on improving accountability and member outcomes within the superannuation system. The need for such legislative action arises from identified gaps in the current regulatory framework that potentially compromise the integrity and efficiency of superannuation funds. The policy objective is to enhance the governance and transparency of superannuation entities, thereby protecting the interests of members and ensuring the sustainability of the superannuation system. The Act is a response to the perceived deficiencies in the oversight and management of superannuation funds, aiming to fortify the regulatory environment. By addressing these issues, the legislation seeks to bolster the confidence of superannuation members and stakeholders in the system, ultimately contributing to more robust and reliable superannuation outcomes. The enactment of this Act reflects the commitment of the Australian Parliament to refining the legislative landscape to better serve the superannuation sector and its participants.

Scope and Application

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 applies to all entities that operate superannuation funds in Australia, including industry and retail superannuation funds, public sector superannuation schemes, and other entities involved in the superannuation industry. This legislation aims to enhance accountability and improve outcomes for superannuation fund members by introducing stricter regulatory requirements and extending the powers of the Australian Prudential Regulation Authority (APRA). The Act’s jurisdictional reach encompasses the Commonwealth, applying uniformly across all states and territories in Australia. Notably, it does not apply to self-managed superannuation funds (SMSFs) unless they are associated with certain specified activities. The Act also provides for its provisions to be extended or restricted through subordinate instruments, allowing for further clarification and implementation of the new regulations through regulations made under the Act.

Key Provisions

The main provisions of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 are found in sections 10 to 30. Section 10 (1) requires trustees to implement a member engagement strategy designed to ensure members are informed about their superannuation and the services available to them. Section 15 (1) mandates that trustees must establish a process for members to lodge complaints or disputes about the administration of their superannuation accounts. Section 20 (1) stipulates that trustees must provide members with a statement of account that includes certain key information about their superannuation account. Section 25 (1) mandates that trustees must provide members with a choice of superannuation products and allow for transfers of superannuation benefits between products. The Act imposes several obligations on trustees of superannuation funds. Trustees are required to implement member engagement strategies (section 10), establish processes for handling complaints (section 15), and provide members with statements of account that include specific information (section 20). Additionally, trustees must offer members a choice of superannuation products and facilitate transfers between these products (section 25). These obligations are designed to enhance transparency, accountability, and member participation in their superannuation funds. Breaches of the Act can lead to significant consequences. Section 35 outlines that trustees who fail to comply with the member engagement requirements, or those who do not establish and maintain the required complaint-handling processes, may be subject to enforcement actions by the Australian Securities and Investments Commission (ASIC). Section 40 states that trustees who do not provide the required statements of account, or who fail to offer a choice of superannuation products and facilitate transfers, may also face enforcement actions. Section 45 details that breaches of these provisions may result in civil penalties. The maximum penalty for non-compliance with the member engagement strategy requirement is 500 penalty units, as specified in section 50. Similarly, the maximum penalty for failure to provide the required statements of account is 500 penalty units (section 55). The Act also provides for additional penalties for repeat or serious breaches, with the maximum penalty increasing to 1,000 penalty units in these cases (section 60). These penalties serve as deterrents to ensure compliance with the Act’s provisions.