Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

by leave—I move government amendments (1) to (17), as circulated, together:

(1) Clause 2, page 2 (table item 1), omit the table item, substitute:

(2) Page 5 (after line 2), after clause 3, insert:

4 Acquisition of property

(1) This Act does not apply to the extent (if any) that its operation would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph).

(2) The following subsections do not limit subsection (1).

(3) If, apart from this section, this Act would result in such an acquisition of property because, as a result of a repeal or an amendment made in a Schedule to this Act, a person would be required or permitted to use, disclose or publish information, then despite any other provision of this Act, the person is not required or permitted to use, disclose or publish the information in the circumstances that would result in such an acquisition.

(4) To avoid doubt, any provision that does not result in an acquisition of property continues to apply in relation to the use, disclosure and publication of information.

(3) Schedule 1, item 40, page 17 (line 26), after "facility", insert "within the fund".

(4) Schedule 2, item 6, page 22 (lines 12 to 15), omit subsection 68AA(6), substitute:

(6) The trustees of a regulated superannuation fund may require that MySuper members who wish to make an election in accordance with subsection (5):

(a) must make the election in relation to both permanent incapacity benefit and death benefit; or

(b) must make the election in relation to death benefit if they make the election in relation to permanent incapacity benefit.

(5) Schedule 3, item 44, page 51 (lines 26 to 30), omit subsection 348A(3).

(6) Schedule 6, item 4, page 65 (lines 16 to 32), omit subsection 20B(1), substitute:

(1) Subject to this section, the total amount attributed by the trustee, or the trustees, of a regulated superannuation fund to a member of the fund is an accrued default amount for the member if subsection (1A) or (1B) is satisfied.

(1A) This subsection is satisfied if the member has given the trustee, or the trustees, of the fund no direction on the investment option under which the asset (or assets) of the fund attributed to the member in relation to the amount (the member's underlying asset(s)) is to be invested.

(1B) This subsection is satisfied if the investment option under which the asset (or assets) of the fund attributed to the member in relation to the amount (the member's underlying asset(s)) is invested is one which, under the current governing rules of the fund, would be the investment option for a new member if no direction were given.

(7) Schedule 6, item 4, page 66 (line 7), omit "if", substitute "to the extent that".

(8) Schedule 6, item 4, page 66 (line 19), omit " or".

(9) Schedule 6, item 4, page 66 (after line 19), at the end of paragraph 20B(3) (c), add:

  (iv) an investment option under which the investment is held as cash; or

(10) Schedule 6, item 4, page 66 (after line 23), after subsection 20B(3), insert:

(3A) For the purposes of subsection (1A), if:

  (a) benefits of a person in a regulated superannuation fund (the earlier fund) are transferred to another regulated superannuation fund (the later fund); and

  (b) the person gave or (because of a previous application of this subsection) is taken to have given the trustee, or the trustees, of the earlier fund a direction on the investment option under which an asset (or assets) of the earlier fund is to be invested; and

  (c) an amount attributable to the person is invested under an equivalent investment option offered by the later fund (the equivalent investment option);

the person is taken to have given the trustee, or the trustees, of the later fund a direction to invest in the equivalent investment option any asset (or assets) of the later fund that is attributed to the person in relation to an amount attributed to the person.

(11) Schedule 6, page 69 (after line 12), after item 8, insert:

8A Paragraph 29TC(1) (b)

  After "facilities", insert "except to the extent that a benefit is provided by taking out risk insurance".

(12) Schedule 6, item 9, page 70 (lines 15 to 19), omit section 29XB, substitute:

29XB No liability for certain transfers

  A trustee of a regulated superannuation fund is not subject to any liability to a member of the fund:

     (a) for an action taken to give effect to an election made in accordance with section 29SAA or 29SAB; or

     (b) for an action of the kind mentioned in subsection 55C(1).

(13) Schedule 6, item 10, page 70 (after line 33), after section 55B, insert:

55C Governing rules do not prevent transfer from pre MySuper default option to MySuper product

  (1) A provision of the governing rules of a regulated superannuation fund is void to the extent that it would prevent a trustee or trustees of the fund from attributing an amount to a MySuper product for a member, instead of attributing the amount to a pre MySuper default option.

  (2) A pre MySuper default option, in relation to an amount attributed to a member of a regulated superannuation fund, is an investment option under which an asset (or assets) of the fund attributed to the member in relation to the amount would be invested, under the governing rules of the fund, if the member gave no direction in relation to the amount.

(14) Schedule 6, page 71 (after line 9), after item 12, insert:

12A After section 349A

  Insert:

349B Acquisition of property

  (1) This Act does not apply to the extent (if any) that its operation would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph).

  (2) The following subsections do not limit subsection (1).

  (3) If, apart from this section, this Act would result in such an acquisition of property because:

     (a) it would require a person to take action in relation to an accrued default amount; or

     (b) it would require a person to take action in relation to an asset of the kind mentioned in subparagraph 29SAB(a) (i);

then despite any other provision of this Act, the person is not required to take that action.

  (4) If, apart from this section, this Act would result in such an acquisition of property because it would prevent the charging of a fee of a kind mentioned in paragraph 29SAC(1) (a), then despite any other provision of this Act, the person is not prevented from charging that fee.

  (5) If, apart from this section, this Act would result in such an acquisition of property because it would require or permit a person to use, disclose or publish information, then despite any other provision of this Act, the person is not required or permitted to use, disclose or publish the information in the circumstances that would result in such an acquisition.

  (6) If, apart from this section, this Act would result in such an acquisition of property because it excuses a person from liability, then despite any other provision of this Act, the person is not excused from the liability.

  (7) To avoid doubt, any provision that does not result in an acquisition of property continues to apply in relation to:

     (a) action in relation to accrued default amounts; and

     (b) action in relation to an asset of the kind mentioned in subparagraph 29SAB(a) (i); and

     (c) the charging of a fee of a kind mentioned in paragraph 29SAC(1) (a); and

     (d) the use, disclosure and publication of information; and

     (e) a liability.

(15) Schedule 6, item 13, page 73 (lines 13 to 16), omit subsection 388(3).

(16) Schedule 7, page 87 (after line 8), after item 16, insert:

16A After paragraph 349B(3) (b)

  Insert:

  or (c) it would require a person to take action in relation to an amount held in an entity that is or was an eligible rollover fund;

16B Subsection 349B(4)

After "paragraph 29SAC(1) (a)", insert "or 242C(1) (a)".

16C After paragraph 349B(7) (b)

  Insert:

  (ba) action in relation to an amount held in an entity that is or was an eligible rollover fund; and

16D Paragraph 349B(7) (c)

  After "paragraph 29SAC(1) (a)", insert "or 242C(1) (a)".

(17) Schedule 7, item 17, page 88 (lines 30 to 33), omit subsection 394(4).

On 19 September 2012 I introduced the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012. This was the third tranche of legislation to implement MySuper. The amendments I am moving today respond to stakeholder concerns in relation to aspects of the bill—in particular, the definition of 'accrued default amounts' which a trustee must move to a MySuper product by 1 July 2017. This definition of accrued default amounts will be amended to limit them to member balances where either the member has not provided any investment direction to the fund at all, or the member's entire balance is invested in the fund's default investment option. This approach represents a consensus position of the four key superannuation industry bodies—the Association of Super Funds of Australia, the Australian Institute of Superannuation Trustees, the Financial Services Council and the Industry Super Network—and seeks to strike a better balance between protecting the interests of members and respecting individual investment decisions.

A further amendment will exclude from accrued default amounts those amounts held in investment options in which all assets invested under the option are held as cash. This addresses industry concerns that the definition of accrued default amounts would capture cash hubs and superannuation wrap products. The amendments also address the issue of when a member has given an investment direction to the trustee of the previous fund and the member's benefits are transferred to an equivalent investment option in a subsequent fund under a successor fund transfer.

The government is also moving an amendment to provide trustees with discretion to move amounts in an investment option in which the member's assets would be invested if no direction were given to a MySuper product, even if the amount is not an accrued default amount. This will permit funds to convert their existing default investment option to a MySuper product if they wish. A related amendment will ensure that the provision of risk insurance does not have to comply with the general requirement that a trustee provides equal access to options benefits and facilities in a MySuper product. In particular, this amendment will ensure that trustees are able to move the existing cover that they have provided to members when moving the accrued default amount of a member into a MySuper product. The definition of 'intrafund advice' will be amended to clarify that it is limited to cash management facilities within the fund. This amendment is to avoid any interpretation that intrafund advice could have been provided on cash management facilities outside of the fund. These are technical amendments that provide additional flexibility in the circumstances in which members can opt out of TPD insurance yet retain life insurance in a MySuper product and to clarify provisions in the bill relating to constitutional issues.

Finally, there has been further consultation with the industry about the product dashboard and its practical operation. Issues have been identified around its coverage and ensuring the dashboard fully captures all relevant fees and net returns experienced by members and around ensuring that risk and liquidity requirements are workable and relevant to members. Consultation with the industry is continuing, also having regard to APRA's consultation on its reporting standards, and it is likely that further tranches of legislation will need to clarify the product dashboard requirements with respect to these areas. The government will also consult on the need for anti-avoidance provisions. I commend the amendments to the House.