The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2019 was given Royal Assent and commenced on 5 April 2019 after being passed by both Houses with amendments.
The Act contains significant regulatory changes to the Superannuation Industry Supervision Act including two recommended by the Financial Services Royal Commission.
Penalties for contravening covenants
The amendments allow civil and criminal penalties to be imposed on trustees of superannuation funds and directors of corporate trustees who fail to execute their responsibilities to act in the interests of member beneficiaries, or who use their position to further their own interests to the detriment of member beneficiaries.
Approval to own or control an RSE licensee
The Act amends the SIS Act to strengthen APRA’s supervision and enforcement powers when a change of ownership or control of an RSE licensee takes place.
APRA has been granted new powers to refuse authority for a change in ownership or control of an RSE licensee; to give a direction to a person to relinquish control of an RSE licensee, and to remove or suspend an RSE licensee where it is subject to the control of its owner.
APRA directions power
The SIS Act is amended to strengthen APRA’s supervision and enforcement powers to include the power to issue a direction to an RSE licensee where APRA has prudential concerns.
Annual members’ meetings
RSE licensees will be required to hold annual members’ meetings (AMMs). The meetings are to discuss the key aspects of the fund and provide members with a forum to ask questions about all areas of the fund’s performance and operations.
Annual outcomes assessment
The SIS Act is amended to strengthen the obligations on superannuation trustees to annually assess and compare the appropriateness of their product offerings (both MySuper and choice), including how each product continues to promote the financial interests of members.
Superannuation trustees not to incentivise employers
Civil and criminal penalties may be imposed on the trustee of a superannuation fund who uses goods or services to influence employers to nominate the superannuation fund as the default fund or influence employers to encourage their employees to nominate the fund as their choice of fund.