Scott Ryan (President) Share this | Link to this | Hansard source

The question is that the bill be read a second time.

Question agreed to.

Bill read a second time.

The Senate will now consider the amendments on sheet GZ227 revised, circulated by the government. The question is that those amendments be agreed to.

Government's circulated amendments—

(1) Clause 2, page 2 (table item 4), omit "7 and 8", substitute "7, 8 and 9".

(2) Schedule 1, page 3 (line 1) to page 5 (line 8), omit the Schedule, substitute:

Schedule 1—Annual outcomes assessment

Superannuation Industry (Supervision) Act 1993

1 Subsection 10(1) (subparagraph (a ) ( i) of the definition of enhanced director obligations )

Repeal the subparagraph, substitute:

  (i) a covenant referred to in paragraph 52A(2) (f), as it relates to covenants referred to in subsection 52(9), (12) or (13); and

2 Subsection 10(1) (subparagraph (a ) ( i) of the definition of enhanced trustee obligations )

Omit ", as enhanced by the obligations imposed under section 29VN".

3 Subsection 10(1) (definition of superannuation entity director )

Omit "29VO(3)", substitute "52A(7)".

4 Division 6 of Part 2C

Repeal the Division.

5 Section 51A

Omit ", and each obligation referred to in sections 29VN and 29VO,".

6 At the end of section 52

Add:

Covenants relating to regulated superannuation funds—annual outcomes assessments

(9) If the entity is a regulated superannuation fund (other than a regulated superannuation fund with fewer than 5 members), the covenants referred to in subsection (1) include the following covenants by each trustee of the entity:

(a) to determine, in writing, on an annual basis, for each MySuper product and choice product offered by the entity, whether the financial interests of the beneficiaries of the entity who hold the product are being promoted by the trustee, having regard to:

  (i) if the product is a MySuper product—a comparison of the MySuper product with other MySuper products offered by other regulated superannuation funds, based on the factors mentioned in subsection (10), and a comparison of the MySuper product with any other benchmarks set under the prudential standards; and

  (ii) if the product is a choice product—a comparison of the choice product with benchmarks set under the prudential standards; and

  (iii) the factors mentioned in subsection (11);

(b) to make the determination referred to in paragraph (a), and a summary of the assessments and comparisons on which the determination is based, publicly available on the website of the entity;

(c) to do so within 28 days after the determination is made;

(d) to keep the determination, and the summary of the assessments and comparisons on which the determination is based, on the website until a new determination is made as referred to in paragraph (a).

(10) In comparing a MySuper product with other MySuper products, the trustees must compare each of the following:

(a) the fees and costs that affect the return to the beneficiaries holding the MySuper products;

(b) the return for the MySuper products (after the deduction of fees, costs and taxes);

(c) the level of investment risk for the MySuper products;

(d) any other matter set out in the prudential standards.

(11) In determining whether the financial interests of the beneficiaries of the entity who hold a MySuper product or choice product are being promoted by the trustee, the trustee must assess each of the following:

(a) whether the options, benefits and facilities offered under the product are appropriate to those beneficiaries;

(b) whether the investment strategy for the product, including the level of investment risk and the return target, is appropriate to those beneficiaries;

(c) whether the insurance strategy for the product is appropriate to those beneficiaries;

(d) whether any insurance fees charged in relation to the product inappropriately erode the retirement income of those beneficiaries;

(e) any other relevant matters, including any matters set out in the prudential standards.

Covenants relating to regulated superannuation funds—promoting financial interests of beneficiaries

(12) If the entity is a regulated superannuation fund (other than a regulated superannuation fund with fewer than 5 members), the covenants referred to in subsection (1) include a covenant by each trustee of the entity to promote the financial interests of the beneficiaries of the entity who hold a MySuper product or a choice product, in particular returns to those beneficiaries (after the deduction of fees, costs and taxes).

Covenants relating to regulated superannuation funds—MySuper products

(13) If the entity is a regulated superannuation fund that offers a MySuper product, the covenants referred to in subsection (1) include the following covenants by each trustee of the entity:

(a) to include in the investment strategy for the MySuper product the details of the trustee's determination of the matters mentioned in paragraph (9) (a);

(b) to include in the investment strategy for the MySuper product, and update each year:

  (i) the investment return target over a period of 10 years for the assets of the entity that are attributed to the MySuper product; and

  (ii) the level of risk appropriate to the investment of those assets.

7 At the end of section 52A

Add:

Superannuation entity director

(7) A superannuation entity director is a person whose profession, business or employment is or includes acting as director of a corporate trustee of a superannuation entity and investing money on behalf of beneficiaries of the superannuation entity.

8 Subsections 55(5) and (6)

Omit ", and all of the obligations referred to in sections 29VN and 29VO,".

9 Subsection 55(7)

Omit ", section 29VP".

10 After section 55C

Insert:

55D Governing rules void to the extent that they are inconsistent with obligations in relation to annual outcomes assessments and MySuper products

A provision of the governing rules of a regulated superannuation fund is void to the extent that it is inconsistent with:

(a) a covenant referred to in subsection 52(9), (12) or (13) that is contained, or taken to be contained, in the governing rules of the fund; or

(b) if the trustee of the fund is a body corporate—a covenant referred to in paragraph 52A(2) (f) that is contained, or taken to be contained, in the governing rules of the fund, to the extent that the covenant relates to a covenant referred to in subsection 52(9), (12) or (13).

11 Paragraph 323(1 ) ( b)

Repeal the paragraph, substitute:

(b) proceedings under subsection 55(3).

(3) Schedule 3, page 8 (line 1) to page 9 (line 5), omit the Schedule, substitute:

Schedule 3—Penalties for contravening covenants

Superannuation Industry (Supervision) Act 1993

1 After section 54A

Insert:

54B Civil and criminal consequences for contravening sections 52 and 52A covenants

Section 52 covenants

(1) A person must not contravene a covenant that:

(a) is to the effect of a covenant set out in section 52; and

(b) is contained, or taken to be contained, in the governing rules of superannuation entity.

Section 52A covenants

(2) A person must not contravene a covenant that:

(a) is to the effect of a covenant set out in section 52A; and

(b) is contained, or taken to be contained, in the governing rules of a superannuation entity.

Contravention has civil and criminal consequences

(3) Subsections (1) and (2) are civil penalty provisions as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or being involved in a contravention of, those subsections.

(4) A contravention of subsection (1) or (2) does not result in the invalidity of a transaction.

(5) This section does not limit the operation of section 55.

Note: A contravention of subsection (1) or (2) may result in an action to recover loss or damage under section 55.

54C Other covenants must not be contravened

(1) A person must not contravene any other covenant contained, or taken to be contained, in the governing rules of a superannuation entity.

(2) A contravention of subsection (1) is not an offence.

(3) A contravention of subsection (1) does not result in the invalidity of a transaction.

(4) This section does not limit the operation of section 55.

Note: A contravention of subsection (1) may result in an action to recover loss or damage under section 55.

2 Section 55 (heading)

Repeal the heading, substitute:

55 Recovering loss or damage for contravention of covenant

3 Subsections 55(1) and (2)

Repeal the subsections.

4 Subsection 55(3)

Omit "contravention of subsection (1)", substitute "contravention of subsection 54B(1), 54B(2) or 54C(1)".

5 Paragraph 55(4A ) ( a)

Omit "contravened subsection (1)", substitute "contravened subsection 54B(2) or 54C(1)".

6 Before paragraph 193(a)

Insert:

(aa) subsection 54B(1);

(ab) subsection 54B(2);

7 Application

The amendments made by this Schedule apply in relation to contraventions occurring on or after the day this Schedule commences.

(4) Schedule 4, item 8, page 13 (lines 23 and 24), omit ", or referred to in section 29VN or 29VO".

(5) Schedule 4, item 10, page 15 (line 16), omit ", or referred to in section 29VN or 29VO".

(6) Schedule 4, item 10, page 17 (line 34), omit ", or referred to in section 29VN or 29VO".

(7) Schedule 4, item 10, page 18 (line 13), omit ", or referred to in section 29VN or 29VO".

(8) Schedule 4, item 10, page 18 (lines 19 and 20), omit ", or referred to in section 29VN or 29VO".

(9) Schedule 4, item 10, page 19 (lines 11 and 12), omit ", or referred to in section 29VN or 29VO".

(10) Schedule 4, item 11, page 20 (lines 23 and 24), omit ", or referred to in section 29VN or 29VO".

(11) Schedule 6, item 1, page 37 (lines 11 to 17), omit paragraph 1017BB(1) (a), substitute:

(a) sufficient information to identify each investment item (a disclosable item) allocated to the investment option at the end of the reporting day that:

  (i) is held by the reporting entity, an associated entity of the reporting entity or a pooled superannuation trust; and

  (ii) is neither an investment in an associated entity of the reporting entity, nor an investment in a pooled superannuation trust;

(12) Schedule 6, item 3, page 39 (lines 7 to 11), omit the definition of investment option in subsection 1017BB(6), substitute:

investment option means:

(a) an investment option (within the ordinary meaning of that expression) within a choice product or MySuper product; or

(b) a choice product, or a MySuper product, that does not contain multiple investment options.

(13) Schedule 6, item 3, page 39 (after line 14), after the definition of member in subsection 1017BB(6), insert:

MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

(14) Schedule 6, item 17, page 40 (line 20), omit "31 December 2018", substitute "31 December 2019".

(15) Schedule 6, item 19, page 41 (line 11), omit "31 December 2018", substitute "31 December 2019".

(16) Schedule 7, item 5, page 43 (after line 29), after subsection 29P(3), insert:

(3A) Despite subsection 14(2) of the Legislation Act 2003, regulations made for the purposes of paragraph (3) (b) may make provision in relation to a matter by applying, adopting or incorporating (with or without modification) any matter contained in a reporting standard, made by APRA under the Financial Sector (Collection of Data) Act 2001,as in force or existing from time to time.

(17) Page 52 (after line 3), at the end of the Bill, add:

Schedule 9—Superannuation trustees not to incentivise employers

Superannuation Industry (Supervision) Act 1993

1 Subparagraph 6(1 ) ( a ) ( ix)

Repeal the subparagraph, substitute:

  (ix) Part 21 (except to the extent that it relates to section 68A);

2 After subparagraph 6(1 ) ( c ) ( iii)

Insert:

and (iv) Part 21, to the extent that it relates to section 68A;

3 Section 68A (heading)

Repeal the heading, substitute:

68A Trustees must not use goods or services to influence employers

4 Subsection 68A(1)

Repeal the subsection, substitute:

(1) A trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, must not:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

if that action could reasonably be expected to:

(d) influence the choice of the fund into which the person pays superannuation contributions for employees of the person who have no chosen fund; or

(e) influence the person to encourage one or more of the person's employees to remain, or apply or agree to be, a member of the fund.

Note: Under the Superannuation Guarantee (Administration) Act 1992, employers will need to pay contributions for an employee who has no chosen fund into a fund chosen by the employer, in order to meet the choice of fund requirement and so avoid an increased individual superannuation guarantee shortfall for the employee. There are other limits on the fund that may be chosen by the employer (see Part 3A of that Act).

5 Subsection 68A(3)

Repeal the subsection, substitute:

(3) A trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, must not refuse to:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

if it is reasonable to conclude that the refusal is given because:

(d) the person has not chosen the fund as the fund into which the person pays superannuation contributions for employees of the person who have no chosen fund; or

(e) the person has not encouraged one or more of the person's employees to remain, or apply or agree to be, a member of the fund.

Note: Under the Superannuation Guarantee (Administration) Act 1992, employers will need to pay contributions for an employee who has no chosen fund into a fund chosen by the employer, in order to meet the choice of fund requirement and so avoid an increased individual superannuation guarantee shortfall for the employee. There are other limits on the fund that may be chosen by the employer (see Part 3A of that Act).

6 After subsection 68A(4)

Insert:

Civil penalty provisions

(4A) Subsections (1) and (3) are civil penalty provisions as defined in section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or being involved in a contravention of, those subsections.

7 After paragraph 193(c)

Insert:

(caa) subsection 68A(1);

(cab) subsection 68A(3);

8 Changes to ban on incentives for choosing a default fund

(1) The amendments made by item 4 of this Schedule, and items 6 and 7 of this Schedule to the extent that the amendments relate to subsection 68A(1) of the Superannuation Industry (Supervision) Act 1993, apply where a trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund:

(a) supplies, or offers to supply, goods or services to a person, or a relative or associate of a person; or

(b) supplies, or offers to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

on or after the day on which this Schedule commences.

(2) The amendments made by item 5 of this Schedule, and items 6 and 7 of this Schedule to the extent that the amendments relate to subsection 68A(3) of the Superannuation Industry (Supervision) Act 1993, apply where a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, refuses to:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

on or after the day on which this Schedule commences.

Question agreed to.

The question is that amendments (8) and (9) on sheet 8638 revised, circulated by the opposition, be agreed to.

Scott Ryan (President) Share this | Link to this | Hansard source

Senators, I need leave to recommit the vote on the amendments on sheet GZ227 revised, circulated by the government, in two questions because of some confusion about which amendments had been withdrawn.

Leave granted.

The Senate will now consider the amendments on sheet GZ227 revised, circulated by the government. The first question is that the amendments to the amendments on sheet GZ227 revised circulated by the opposition on sheet 8638 revised be agreed to.

Opposition's circulated amendments—

(1) Amendment (2), before item 1, insert:

1A Subsection 10(1) (after the definition of authorised person)

Insert:

benchmark means a benchmark mentioned in, or specified in regulations made for the purposes of, subparagraphs 52(9) (a) (i) and (ii) and paragraph 52(9) (aa).

1AA Subsection 10(1) (after the definition of Commissioner)

Insert:

comparable choice products, in relation to a choice product, means a class of choice product specified in regulations made for the purposes of this definition that the choice product is to be compared with.

(2) Amendment (2), item 6, subparagraph 52(9) (a) (i), omit "set under the prudential standards", substitute "specified in regulations made for the purposes of this subparagraph".

(3) Amendment (2), item 6, subparagraph 52(9) (a) (ii), omit the subparagraph, substitute:

  (ii) if the product is a choice product—a comparison of the choice product with the comparable choice products in relation to the choice product, based on factors mentioned in subsection (10A), and a comparison of the choice product with any other benchmarks specified in regulations made for the purposes of this subparagraph; and

(4) Amendment (2), item 6, after paragraph 52(9) (a), insert:

(aa) to determine, in writing, on an annual basis, whether each trustee of the entity is promoting the financial interests of the beneficiaries of the fund, as assessed against benchmarks specified in regulations made for the purposes of this subparagraph;

(5) Amendment (2), item 6, after subsection 52(10), insert:

(10A) In comparing a choice product with the comparable choice products in relation to the choice product, the trustees must compare each of the following:

(a) the fees and costs that affect the return to the beneficiaries holding the choice products;

(b) the return for the choice products;

(c) the level of investment risk for the choice products;

(d) any other matter specified in the prudential standards.

(6) Amendment (3), after item 6, insert:

6A Subsection 196(3)

Omit "2,000", substitute "2,400".

(7) Amendment (12), omit the definition of investment option, substitute:

investment option, for a registrable superannuation entity, means:

(a) an investment pool maintained within the entity; or

(b) a financial product made availableto a member of the entity:

  (i) that is a managed investment scheme or other pooled investment; and

  (ii) in respect of which section 1012IA applies if there is, or will be, a regulated acquisition of the product (within the meaning of that section).

ADDITIONAL RELATED AMENDMENTS TO THE BILL

(8) Schedule 5, page 22 (after line 8), after item 2, insert:

2A Subsection 10(1) (definition of connected entity)

Repeal the definition, substitute:

connected entity, in relation to an RSE licensee of a registrable superannuation entity, means:

(a) an associated entity (within the meaning of the Corporations Act 2001) of the RSE licensee; and

(b) if the RSE licensee is a group of individual trustees—an entity that has the capacity to determine or influence decisions made by one or more members of the group in relation to the registrable superannuation entity; and

(c) any other entity of a kind prescribed by the regulations.

[connected entity]

(9) Schedule 5, item 11, page 23 (after line 24), after paragraph 131D(1) (c), insert:

(ca) the RSE licensee, or the registrable superannuation entity of the RSE licensee, has failed to meet a benchmark that relates to the licensee or entity; or

Scott Ryan (President) Share this | Link to this | Hansard source

The question now is that the amendments on sheet GZ227 revised as circulated by the government, as amended, be agreed to.

(1) Clause 2, page 2 (table item 4), omit "7 and 8", substitute "7, 8 and 9".

[no incentivising employers]

(2) Schedule 1, page 3 (line 1) to page 5 (line 8), omit the Schedule, substitute:

Schedule 1—Annual outcomes assessment

Superannuation Industry (Supervision) Act 1993

1 Subsection 10(1) (subparagraph (a )( i) of the definition of enhanced director obligations )

Repeal the subparagraph, substitute:

  (i) a covenant referred to in paragraph 52A(2)(f), as it relates to covenants referred to in subsection 52(9), (12) or (13); and

2 Subsection 10(1) (subparagraph (a )( i) of the definition of enhanced trustee obligations )

Omit ", as enhanced by the obligations imposed under section 29VN".

3 Subsection 10(1) (definition of superannuation entity director )

Omit "29VO(3)", substitute "52A(7)".

4 Division 6 of Part 2C

Repeal the Division.

5 Section 51A

Omit ", and each obligation referred to in sections 29VN and 29VO,".

6 At the end of section 52

Add:

Covenants relating to regulated superannuation funds—annual outcomes assessments

(9) If the entity is a regulated superannuation fund (other than a regulated superannuation fund with fewer than 5 members), the covenants referred to in subsection (1) include the following covenants by each trustee of the entity:

(a) to determine, in writing, on an annual basis, for each MySuper product and choice product offered by the entity, whether the financial interests of the beneficiaries of the entity who hold the product are being promoted by the trustee, having regard to:

  (i) if the product is a MySuper product—a comparison of the MySuper product with other MySuper products offered by other regulated superannuation funds, based on the factors mentioned in subsection (10), and a comparison of the MySuper product with any other benchmarks set under the prudential standards; and

  (ii) if the product is a choice product—a comparison of the choice product with benchmarks set under the prudential standards; and

  (iii) the factors mentioned in subsection (11);

(b) to make the determination referred to in paragraph (a), and a summary of the assessments and comparisons on which the determination is based, publicly available on the website of the entity;

(c) to do so within 28 days after the determination is made;

(d) to keep the determination, and the summary of the assessments and comparisons on which the determination is based, on the website until a new determination is made as referred to in paragraph (a).

(10) In comparing a MySuper product with other MySuper products, the trustees must compare each of the following:

(a) the fees and costs that affect the return to the beneficiaries holding the MySuper products;

(b) the return for the MySuper products (after the deduction of fees, costs and taxes);

(c) the level of investment risk for the MySuper products;

(d) any other matter set out in the prudential standards.

(11) In determining whether the financial interests of the beneficiaries of the entity who hold a MySuper product or choice product are being promoted by the trustee, the trustee must assess each of the following:

(a) whether the options, benefits and facilities offered under the product are appropriate to those beneficiaries;

(b) whether the investment strategy for the product, including the level of investment risk and the return target, is appropriate to those beneficiaries;

(c) whether the insurance strategy for the product is appropriate to those beneficiaries;

(d) whether any insurance fees charged in relation to the product inappropriately erode the retirement income of those beneficiaries;

(e) any other relevant matters, including any matters set out in the prudential standards.

Covenants relating to regulated superannuation funds—promoting financial interests of beneficiaries

(12) If the entity is a regulated superannuation fund (other than a regulated superannuation fund with fewer than 5 members), the covenants referred to in subsection (1) include a covenant by each trustee of the entity to promote the financial interests of the beneficiaries of the entity who hold a MySuper product or a choice product, in particular returns to those beneficiaries (after the deduction of fees, costs and taxes).

Covenants relating to regulated superannuation funds—MySuper products

(13) If the entity is a regulated superannuation fund that offers a MySuper product, the covenants referred to in subsection (1) include the following covenants by each trustee of the entity:

(a) to include in the investment strategy for the MySuper product the details of the trustee's determination of the matters mentioned in paragraph (9)(a);

(b) to include in the investment strategy for the MySuper product, and update each year:

  (i) the investment return target over a period of 10 years for the assets of the entity that are attributed to the MySuper product; and

  (ii) the level of risk appropriate to the investment of those assets.

7 At the end of section 52A

Add:

Superannuation entity director

(7) A superannuation entity director is a person whose profession, business or employment is or includes acting as director of a corporate trustee of a superannuation entity and investing money on behalf of beneficiaries of the superannuation entity.

8 Subsections 55(5) and (6)

Omit ", and all of the obligations referred to in sections 29VN and 29VO,".

9 Subsection 55(7)

Omit ", section 29VP".

10 After section 55C

Insert:

55D Governing rules void to the extent that they are inconsistent with obligations in relation to annual outcomes assessments and MySuper products

A provision of the governing rules of a regulated superannuation fund is void to the extent that it is inconsistent with:

(a) a covenant referred to in subsection 52(9), (12) or (13) that is contained, or taken to be contained, in the governing rules of the fund; or

(b) if the trustee of the fund is a body corporate—a covenant referred to in paragraph 52A(2)(f) that is contained, or taken to be contained, in the governing rules of the fund, to the extent that the covenant relates to a covenant referred to in subsection 52(9), (12) or (13).

11 Paragraph 323(1 )( b)

Repeal the paragraph, substitute:

(b) proceedings under subsection 55(3).

[annual outcomes assessments]

(3) Schedule 3, page 8 (line 1) to page 9 (line 5), omit the Schedule, substitute:

Schedule 3—Penalties for contravening covenants

Superannuation Industry (Supervision) Act 1993

1 After section 54A

Insert:

54B Civil and criminal consequences for contravening sections 52 and 52A covenants

Section 52 covenants

(1) A person must not contravene a covenant that:

(a) is to the effect of a covenant set out in section 52; and

(b) is contained, or taken to be contained, in the governing rules of superannuation entity.

Section 52A covenants

(2) A person must not contravene a covenant that:

(a) is to the effect of a covenant set out in section 52A; and

(b) is contained, or taken to be contained, in the governing rules of a superannuation entity.

Contravention has civil and criminal consequences

(3) Subsections (1) and (2) are civil penalty provisions as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or being involved in a contravention of, those subsections.

(4) A contravention of subsection (1) or (2) does not result in the invalidity of a transaction.

(5) This section does not limit the operation of section 55.

Note: A contravention of subsection (1) or (2) may result in an action to recover loss or damage under section 55.

54C Other covenants must not be contravened

(1) A person must not contravene any other covenant contained, or taken to be contained, in the governing rules of a superannuation entity.

(2) A contravention of subsection (1) is not an offence.

(3) A contravention of subsection (1) does not result in the invalidity of a transaction.

(4) This section does not limit the operation of section 55.

Note: A contravention of subsection (1) may result in an action to recover loss or damage under section 55.

2 Section 55 (heading)

Repeal the heading, substitute:

55 Recovering loss or damage for contravention of covenant

3 Subsections 55(1) and (2)

Repeal the subsections.

4 Subsection 55(3)

Omit "contravention of subsection (1)", substitute "contravention of subsection 54B(1), 54B(2) or 54C(1)".

5 Paragraph 55(4A )( a)

Omit "contravened subsection (1)", substitute "contravened subsection 54B(2) or 54C(1)".

6 Before paragraph 193(a)

Insert:

(aa) subsection 54B(1);

(ab) subsection 54B(2);

7 Application

The amendments made by this Schedule apply in relation to contraventions occurring on or after the day this Schedule commences.

[civil and criminal penalties for contravening covenants and annual outcomes assessments]

(4) Schedule 4, item 8, page 13 (lines 23 and 24), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(5) Schedule 4, item 10, page 15 (line 16), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(6) Schedule 4, item 10, page 17 (line 34), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(7) Schedule 4, item 10, page 18 (line 13), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(8) Schedule 4, item 10, page 18 (lines 19 and 20), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(9) Schedule 4, item 10, page 19 (lines 11 and 12), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(10) Schedule 4, item 11, page 20 (lines 23 and 24), omit ", or referred to in section 29VN or 29VO".

[annual outcomes assessments]

(11) Schedule 6, item 1, page 37 (lines 11 to 17), omit paragraph 1017BB(1)(a), substitute:

(a) sufficient information to identify each investment item (a disclosable item) allocated to the investment option at the end of the reporting day that:

  (i) is held by the reporting entity, an associated entity of the reporting entity or a pooled superannuation trust; and

  (ii) is neither an investment in an associated entity of the reporting entity, nor an investment in a pooled superannuation trust;

[investment items held through pooled superannuation trusts]

(12) Schedule 6, item 3, page 39 (lines 7 to 11), omit the definition of investment option in subsection 1017BB(6), substitute:

investment option means:

(a) an investment option (within the ordinary meaning of that expression) within a choice product or MySuper product; or

(b) a choice product, or a MySuper product, that does not contain multiple investment options.

[investment options]

(13) Schedule 6, item 3, page 39 (after line 14), after the definition of member in subsection 1017BB(6), insert:

MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

[investment options]

(14) Schedule 6, item 17, page 40 (line 20), omit "31 December 2018", substitute "31 December 2019".

[portfolio holdings disclosure]

(15) Schedule 6, item 19, page 41 (line 11), omit "31 December 2018", substitute "31 December 2019".

[portfolio holdings disclosure]

(16) Schedule 7, item 5, page 43 (after line 29), after subsection 29P(3), insert:

(3A) Despite subsection 14(2) of the Legislation Act 2003, regulations made for the purposes of paragraph (3)(b) may make provision in relation to a matter by applying, adopting or incorporating (with or without modification) any matter contained in a reporting standard, made by APRA under the Financial Sector (Collection of Data) Act 2001,as in force or existing from time to time.

[annual members ' meetings]

(17) Page 52 (after line 3), at the end of the Bill, add:

Schedule 9—Superannuation trustees not to incentivise employers

Superannuation Industry (Supervision) Act 1993

1 Subparagraph 6(1 )( a )( ix)

Repeal the subparagraph, substitute:

  (ix) Part 21 (except to the extent that it relates to section 68A);

2 After subparagraph 6(1 )( c )( iii)

Insert:

and (iv) Part 21, to the extent that it relates to section 68A;

3 Section 68A (heading)

Repeal the heading, substitute:

68A Trustees must not use goods or services to influence employers

4 Subsection 68A(1)

Repeal the subsection, substitute:

(1) A trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, must not:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

if that action could reasonably be expected to:

(d) influence the choice of the fund into which the person pays superannuation contributions for employees of the person who have no chosen fund; or

(e) influence the person to encourage one or more of the person's employees to remain, or apply or agree to be, a member of the fund.

Note: Under the Superannuation Guarantee (Administration) Act 1992, employers will need to pay contributions for an employee who has no chosen fund into a fund chosen by the employer, in order to meet the choice of fund requirement and so avoid an increased individual superannuation guarantee shortfall for the employee. There are other limits on the fund that may be chosen by the employer (see Part 3A of that Act).

5 Subsection 68A(3)

Repeal the subsection, substitute:

(3) A trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, must not refuse to:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

if it is reasonable to conclude that the refusal is given because:

(d) the person has not chosen the fund as the fund into which the person pays superannuation contributions for employees of the person who have no chosen fund; or

(e) the person has not encouraged one or more of the person's employees to remain, or apply or agree to be, a member of the fund.

Note: Under the Superannuation Guarantee (Administration) Act 1992, employers will need to pay contributions for an employee who has no chosen fund into a fund chosen by the employer, in order to meet the choice of fund requirement and so avoid an increased individual superannuation guarantee shortfall for the employee. There are other limits on the fund that may be chosen by the employer (see Part 3A of that Act).

6 After subsection 68A(4)

Insert:

Civil penalty provisions

(4A) Subsections (1) and (3) are civil penalty provisions as defined in section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or being involved in a contravention of, those subsections.

7 After paragraph 193(c)

Insert:

(caa) subsection 68A(1);

(cab) subsection 68A(3);

8 Changes to ban on incentives for choosing a default fund

(1) The amendments made by item 4 of this Schedule, and items 6 and 7 of this Schedule to the extent that the amendments relate to subsection 68A(1) of the Superannuation Industry (Supervision) Act 1993, apply where a trustee of a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund:

(a) supplies, or offers to supply, goods or services to a person, or a relative or associate of a person; or

(b) supplies, or offers to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

on or after the day on which this Schedule commences.

(2) The amendments made by item 5 of this Schedule, and items 6 and 7 of this Schedule to the extent that the amendments relate to subsection 68A(3) of the Superannuation Industry (Supervision) Act 1993, apply where a regulated superannuation fund, or an associate of a trustee of a regulated superannuation fund, refuses to:

(a) supply, or offer to supply, goods or services to a person, or a relative or associate of a person; or

(b) supply, or offer to supply, goods or services to a person, or a relative or associate of a person, at a particular price; or

(c) give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply, or the proposed supply, of goods or services to a person, or a relative or associate of a person;

on or after the day on which this Schedule commences.

[no incentivising employers]

Question agreed to.

I now move to the Australian Greens amendments and separate them as requested by Senator Whish-Wilson. The question now is that the amendments on sheet 8500, circulated by the Australian Greens, be agreed to.

Australian Greens' circulated amendments—

(1) Clause 2, page 2 (at the end of the table), add:

[retail funds]

(2) Page 52 (after line 3), at the end of the Bill, add:

Schedule 9—Amendments commencing on 1 July 2020

Superannuation Guarantee (Administration) Act 1992

1 At the end of subsection 32C(2)

Add:

; and (f) the trustee of the fund is not any of the following:

  (i) an ADI within the meaning of the Banking Act 1959;

  (ii) a related body corporate (within the meaning of that Act) of such an ADI;

  (iii) a subsidiary (within the meaning of that Act) of such an ADI;

  (iv) an associate (within the meaning of the Superannuation Industry (Supervision) Act 1993) of such an ADI.

Superannuation Industry (Supervision) Act 1993

2 Subsection 29S(1)

After "RSE licensee", insert "(other than an ineligible licensee)".

3 At the end of section 29S

Add:

Ineligible licensee

(8) In this section:

ineligible licensee means an RSE licensee that is:

(a) an ADI within the meaning of the Banking Act 1959; or

(b) a related body corporate (within the meaning of that Act) of such an ADI; or

(c) a subsidiary (within the meaning of that Act) of such an ADI; or

(d) an associate of such an ADI.

[retail funds]

Scott Ryan (President) Share this | Link to this | Hansard source

I will now turn to the amendments on sheet 8639, circulated by the Australian Greens. The question is that those amendments be agreed to.

Australian Greens' circulated amendments—

(1) Schedule 8, page 50 (before line 11), before item 3, insert:

2A After paragraph 13(4A ) ( a)

Insert:

(aa) the extent to which the profits of the investor is attributable to deductions made by the investor;

(ab) if the return on the investment made by the investor is passed on (in whole or in part) to members of a regulated superannuation entity of the RSE licensee—the effect of any deduction by the investor on the amount passed on to the members;

(ac) if the investor is a person connected with the RSE licensee—the relationship between the RSE licensee and the investor;

(2) Schedule 8, item 3, page 50 (line 11) to page 51 (line 18), omit the item, substitute:

3 After subsection 13(4C)

Insert:

(4D) A reporting standard may require an RSE licensee to provide information in relation to any money, consideration or other benefit given to an entity (the receiving entity) by the RSE licensee or a person connected with the RSE licensee (the paying entity) out of the assets, or assets derived from assets, of a registrable superannuation entity of the RSE licensee, including information about the following:

(a) details of the receiving entity;

(b) details of how the money, consideration or benefit is given to the receiving entity;

(c) if the receiving entity is not the RSE licensee—the relationship between the receiving entity and the paying entity;

(d) the purpose for which the money, consideration or other benefit is given;

(e) the way in which the money, consideration or other benefit is used by the receiving entity, and any entity with which that entity deals, including the extent to which the receiving entity's profit is attributable to that money, consideration or other benefit.

(4E) If:

(a) a reporting standard requires an RSE licensee to provide information (the required information) in relation to any money, consideration or other benefit given to a receiving entity by a paying entity out of the assets, or assets derived from assets, of a registrable superannuation entity of the RSE licensee; and

(b) the money, consideration or other benefit is given under a contract or other arrangement between the paying entity and the receiving entity;

the contract or arrangement is taken to include:

(c) a term requiring the paying entity, at the time the money, consideration or benefit is given or as soon as reasonably practicable after that time, to notify the receiving entity that the money, consideration or benefit is given out of assets, or assets derived from, a registrable superannuation entity; and

(d) a term requiring the receiving entity, if notified by the paying entity in accordance with paragraph (c), to, as soon as reasonably practicable after being notified, provide the paying entity with the required information of which the receiving party is aware.

(4F) A person is connected with an RSE licensee for the purposes of subsection (4D) if the person is:

(a) a related body corporate of the RSE licensee; or

(b) a custodian in relation to assets, or assets derived from assets, of the RSE licensee's registrable superannuation entities, and in relation to the RSE licensee or a related body corporate of the RSE licensee; or

(c) a person who, under a contract or other arrangement with the RSE licensee or a person mentioned in paragraphs (a) or (b):

(i) invests assets, or assets derived from assets, of the RSE licensee's registrable superannuation entities; or

(ii) provides a financial service (within the meaning of section 766A of the Corporations Act 2001) in relation to assets, or assets derived from assets, of the RSE licensee's registrable superannuation entities.

(4G) Subsections (4D) and (4E) do not apply in relation to any money, consideration or other benefit given to another entity by the RSE licensee if it is an investment of assets, or assets derived from assets, of the RSE licensee's registrable superannuation entities by the RSE licensee.

(3) Schedule 8, item 4, page 51 (line 35) to page 52 (line 3), omit all the words from and including "another entity" to the end of the item, substitute "an entity by the RSE licensee, or a person connected with the RSE licensee, out of the assets, or assets derived from assets, of a registrable superannuation entity of the RSE licensee, then the RSE licensee is not required to comply with the reporting standard to the extent that it requires the RSE licensee to provide that particular information."