ISSUE 20– 19 MARCH 2012
AON HEWITT LEGAL NEWS In this issue:
SUPERANNUATION
SUPERANNUATION
Superannuation Industry (Supervision) Amendment Regulation 2012 (No.
Ì Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 1) passed
1) passed
Ì QROPS reporting requirements – proposed changes
announced measure to extend the temporary relief previously provided to
Ì Stronger Super second tranche of legislation Ì Data and payment standards legislation released for consultation Ì Limited recourse borrowings Ì Payslip reporting Ì Disclosure of superannuation information Ì The Tax and Superannuation Laws Amendment (2012 Measures No.1) Bill
The above Regulations have been passed to give effect to the Government’s
account-based pensions so that it applies to the 2012/2013 year, with a 25% reduction in the minimum payment amounts for these products.
The Government halved the amounts in the 2008/2009, 2009/2010 and 2010/2011 years and provided a 25% reduction in the 2011/2012 year.
The Government had not intended to continue the relief for the 2012/2013 year however has done so due to the continued volatility of equity markets and prices being significantly lower than prior to the global financial crisis. This measure will assist pensioners in recouping capital losses on their pension portfolios.
The Retirement Savings Accounts Amendment Regulation 2012 (No. 1) has also been released and contains parallel provisions in relation to pensions payable from Retirement Savings Accounts.
Ì Foreign Account Tax Compliance Act (FATCA) update
Source:
Ì ASFA research papers
and explanatory statement
Superannuation Industry (Supervision) Amendment Regulation 2012 (No. 1)
BUZZ – Issue 20 – 19MARCH 2012 In this issue:
QROPS reporting requirements – proposed changes
SUPERANNUATION
By way of background, from 6 April 2006 in order to avoid significant taxation of
Ì ASFA Stronger Super preparedness survey
transfers from UK pension schemes to other jurisdictions, receiving
Ì APRA releases quarterly superannuation statistics
as a Qualifying Recognised Overseas Pension Scheme (QROPS).
superannuation funds had to be certified by HM Revenue and Customs (HMRC)
HMRC has recently released draft regulations containing considerable changes to the QROPS system which will make obligations much more onerous for
FINANCIAL PLANNING
superannuation funds. The regulations have been released with an 8 week
Ì ASIC releases guidance on advertising of financial products
consultation period however it appears that this is a formality and that the
Ì FOFA – PJC report released Ì ASIC updates Regulatory Guide 204
regulations will come into effect on 6 April 2012.
The key changes relevant to Australian superannuation funds are as follows: •
The QROPS reporting period, within which the fund trustees are required to report to HMRC any payments to members, will be increased to 10 years after the member transfers out of a UK pension scheme (currently it
Ì New AML/CTF Rules
is a period of five years from when the member became UK non-resident) INSURANCE Ì APRA releases quarterly life and general insurance statistics for December 2011
•
Any distribution from a QROPS, within 10 years of the member becoming non-UK resident, must be reported to HMRC within 60 days of the payment or transfer (currently it is an annual requirement for payments made in a UK financial year)
•
Updated forms are to be used which expand the information to be provided to HMRC
HUMAN CAPITAL Ì Further reforms re executive remuneration Ì ASIC issues advisory re greater disclosure in remuneration reports
•
Introduction of a new obligation to report material changes to previously reported information
•
Introduction of a new reporting requirement where a fund ceases to be, or qualifies to be, a QROPS
The paper can be accessed in full at: SEMINARS
http://www.hmrc.gov.uk/pensionschemes/draft-guidance-qrops.pdf
Ì April – May 2012 Source: ASFA Home, ‘Proposed changes to QROPS reporting requirements’, Issue 450, 8 February 2012
Stronger Super second tranche of legislation
The Government has introduced the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 which contains the second tranche of legislation for the Government’s Stronger Super reforms.
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BUZZ – Issue 20 – 19MARCH 2012 The aspects of the reforms contained in the Bill include: •
Expansion of the covenants for RSE licensees
•
Applying new trustee duties to trustees of an RSE that offers a MySuper product
•
Applying personal duties to the directors of corporate trustees in their own right
•
APRA’s power to issue prudential standards in relation to superannuation
The provisions introducing the prudential standards-making power will apply from the day after Royal Assent whereas the other provisions will apply from 1 July 2013.
Further Stronger Super changes will be released in subsequent tranches of legislation.
To access the Bill and explanatory memorandum in full please go to: http://strongersuper.treasury.gov.au/content/Content.aspx?doc=bills/trustee.htm
Source: Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 and explanatory memorandum
Data and payment standards legislation released for consultation
The Government has recently released the Superannuation Legislation Amendment (Stronger Super and Other Measures) (No.2) Bill 2012, which was available for comment until 23 February 2012.
The object of the Bill is to give effect to the SuperStream reforms which aim to improve the administration and management of superannuation accounts to make the processing of transactions easier, cheaper and quicker for employers and members.
Specifically, the Bill introduces a framework to support the implementation of superannuation data and payment standards that will apply to particular superannuation transactions undertaken by superannuation entities and employers.
The Bill allows the Commissioner of Taxation to issue mandatory superannuation data and payment standards for superannuation entities and employers and introduces a penalty regime to ensure compliance with such standards.
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BUZZ – Issue 20 – 19MARCH 2012 The Bill also enables superannuation data and payment regulations to deal with payments and information related to superannuation transactions and reports. Whilst regulators will support the introduction of the new data and payment standards through help and education activities the explanatory memorandum indicates that this will need to be supported by a new compliance framework which will address breaches of the data and payment standards.
The draft legislation and explanatory memorandum are available at: http://strongersuper.treasury.gov.au/content/Content.aspx?doc=exposure_draft s/superstream_reforms/default.htm
Source: Superannuation Legislation Amendment (Stronger Super and Other Measures) (No.2) Bill 2012 and explanatory memorandum
Limited recourse borrowings
The Government has released an exposure draft amending the Corporations Regulations 2001 to provide that certain borrowing arrangements by superannuation fund trustees permitted by the SIS Act are financial products under the Corporations Act 2001. The Regulations bring limited recourse borrowing arrangements by superannuation funds into the Government’s financial consumer protection framework.
Generally, superannuation funds are not permitted to borrow funds except in limited circumstances, and limited recourse borrowing arrangements, such as instalment warrants, are one of the exceptions permitted in subsections 67A and 67B of the SIS Act.
The exposure draft of the Regulations provides that: •
Limited recourse borrowing arrangements are financial products under the Corporations Act when acquired by superannuation funds
•
Limited recourse borrowing arrangements are not a credit facility under the Corporations Act when acquired by superannuation funds
•
An Australian Financial Services Licence covering securities or derivatives is taken to also cover limited recourse borrowing arrangements
An earlier draft of these Regulations was released for public consultation in June 2010 and the current draft constitutes a substantially revised version in light of submissions received and other developments.
Submissions on the exposure draft were accepted until 12 March 2012. 4
BUZZ – Issue 20 – 19MARCH 2012 The exposure draft and explanatory memorandum can be accessed in full at: http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=2293
Source: Corporations Amendment Regulations 2012 (No. ) - Limited Recourse Borrowings by Superannuation Funds (Instalment Warrants) exposure draft and explanatory memorandum
Payslip reporting
Draft legislation was released in February to amend the Superannuation Industry (Supervision) Act 1993 to require employers to report, on payslips, any information prescribed in the regulations about superannuation contributions.
In turn, the regulations will require employers to report the amount of superannuation contributions, as well as the date on which the employer expects to pay them.
The Government accepted submissions on this until 20 February.
If enacted, the amendments will apply in relation to salary or wages paid on or after 1 July 2012.
The draft legislation and explanatory memorandum can be accessed in full at: http://www.treasury.gov.au/contentitem.asp?NavId=002&ContentID=2310
Source: Exposure draft ‘Superannuation Legislation Amendment 2 (Stronger Super and Other Measures 3 Bill) (No. 2) Bill 2012: giving information 4 about superannuation contributions’ and explanatory memorandum
Disclosure of superannuation information
A draft piece of legislation has been released which, if enacted, would permit the Australian Taxation Office to disclose details of an individual’s superannuation interests and benefits to superannuation providers in the interests of enabling funds to assist members finding and consolidating their superannuation.
This measure forms part of the Stronger Super reforms and the Government accepted submissions on this until 20 February.
The draft legislation and explanatory memorandum can be accessed in full at: http://www.treasury.gov.au/contentitem.asp?NavId=002&ContentID=2311 5
BUZZ – Issue 20 – 19MARCH 2012 Source: Superannuation Legislation Amendment (Stronger Super and Other Measures) Bill 2012: Disclosure of superannuation information and explanatory memorandum
The Tax and Superannuation Laws Amendment (2012 Measures No.1) Bill
This newly introduced Bill aims to make superannuation fairer and simpler, by introducing the following key measures: •
Giving eligible individuals the option to effectively have excess concessional contributions of up to $10,000 refunded and assessed at their marginal tax rates, rather than incurring the potentially higher effective rate of excess contributions tax
•
Setting up the framework for payslip reporting of superannuation benefits (this measure has been discussed in an earlier article of this edition of Buzz)
•
Pausing the indexation of the superannuation concessional contributions cap for one year. As a result, the general concessional cap is not expected to increase from $25,000 to $30,000 until 2014-15
•
Amending the GST and tax administration law following recent court decisions. The measures relate to the GST treatment of health supplies paid for by third parties, payments made under a government appropriation, and the Commissioner of Taxation's ability to retain refunds pending integrity checks
Source: Minister for Financial Services and Superannuation, media release ‘New super measure to make system fairer and simpler’, 1 March 2012
Foreign Account Tax Compliance Act (FATCA) update
The US Treasury Department and Internal Revenue Service have released their latest draft regulations for implementing the FATCA the intention of which is to prevent US taxpayers avoiding their tax liabilities by holding their assets in nonUS financial institutions.
The key changes from the previous drafts are as follows: •
A 12 month deferral of the commencement of the regime
•
Closer linking of account identification requirements with the work required for AML/CTF compliance
•
Simplified account-ownership identification requirements
•
Simplified reporting requirements
•
Exemptions for certain entities 6
BUZZ – Issue 20 – 19MARCH 2012 The key points for Australian super funds are: •
The exemption provided to retirement funds will not apply to the majority of Australian regulated funds
•
The withholding regime won’t commence until 1 July 2014
•
Foreign financial institutions need to be registered with the US Treasury Department and Internal Revenue Service by 1 July 2013 in order to avoid the withholding regime
ASFA is preparing a submission to the US Treasury Department and Internal Revenue Service and is preparing a paper containing a summary of FATCA compliance obligations for Australian superannuation funds.
Source: ASFA Home, Issue 452, ‘FATCA – latest news’, 7 March 2012
ASFA research papers
1.
MySuper
ASFA has recently released a research paper providing a high level overview of the range of strategic and operational considerations for superannuation industry participants in relation to the proposed MySuper reforms.
The paper is intended for trustees, senior management of funds, and advisers to funds on strategy and implementation of changes.
Key strategic and operational questions addressed in the paper include: •
The impact on fund members and superannuation funds of the MySuper provisions
•
Identification of MySuper members
•
Implications for investment and fund choice for MySuper and Choice members
•
The potential market for customised MySuper offerings, including new data on the number of firms with more than 500 employees
•
Whitelabelling standard MySuper offerings
•
Insurance and MySuper offerings
•
Industrial relations arrangements and implications
•
The Productivity Commission review of criteria for default funds in awards
•
Strategic and operational issues for particular fund types
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BUZZ – Issue 20 – 19MARCH 2012 The paper can be accessed in full by ASFA members on the ASFA website: www.superannuation.asn.au
Source: ASFA, research paper ‘MySuper – strategic and operational considerations for superannuation funds, February 2012 ASFA Home, ‘ASFA Research Paper: MySuper - strategic and operational considerations for superannuation funds’, 3 February 2012
2.
Equity of government assistance for retirement income
ASFA has released a research paper on the equity of government assistance for retirement income in Australia, the main use of which is in ASFA’s advocacy around tax concessions and the increase in the SG contribution to 12%.
The paper considers the following: •
The various dimensions of equity relating to government assistance for retirement income provision
•
What the impact on equity between individuals has been from the caps on concessional superannuation contributions, changes in marginal personal income tax rates and changes in the level of the Age Pension
•
The impact of the proposed increase in the SG and the low-income earners contribution tax rebate
•
The reasons why the Henry Review recommendations in regard to the taxation of superannuation contributions and fund investment earnings should not be adopted
The key conclusions of the paper are as follows: •
Tax concessions for superannuation are predominantly equitable
•
The proposed increase in the SG and the low-income earners contribution tax rebate, combined with the contribution caps, make the application of the tax concessions even more equitable
•
Tax expenditure estimates for superannuation are grossly overestimated
After release of the paper, ASFA introduced it to key political groups in Canberra and advise it was very well received.
The paper can be accessed in full at: http://www.superannuation.asn.au/policy/reports
Source: ASFA, Research paper ‘The equity of government assistance for retirement income in Australia, February 2012 8
BUZZ – Issue 20 – 19MARCH 2012 ASFA Stronger Super preparedness survey
ASFA has released preliminary findings from their second Stronger Super preparedness survey which they undertook in collaboration with Ernst and Young in late 2011. The purpose of the survey was to assess industry progress in preparing to implement the Stronger Super changes.
The survey was completed by 34 industry executives comprising representatives from industry, retail and corporate funds, self-managed super funds, public sector, service providers as well as fund administrators.
The key findings in the report include: •
38% of industry executives surveyed plan to take advantage of the Stronger Super reform compared to 26% taking a pure compliance position to the reform
•
More than two thirds of executives expect to lose less than 10% of their members due to account consolidation
•
ASFA’s previous survey saw SuperStream accounting for most of the cost incurred however this survey saw it level with MySuper, with each attracting almost 40% of respondent’s estimated cost. This shows a shift in thinking from earlier this year when the industry saw MySuper as “just another product”
•
Executives estimate technology and infrastructure to make up 35% of all cost incurred, followed by 26% for business processes and people changes
The report can be accessed in full at: http://www.superannuation.asn.au/policy/reports
Source: ASFA Home, ‘Stronger Super preparedness survey II – preliminary findings’’, Issue 450, 8 February 2012
APRA releases quarterly superannuation statistics
APRA has released their superannuation statistical report for Quarter 4 2011.
The report contains data on the earnings performance, fees, expenses and taxes across all classes of superannuation funds required to report to APRA.
The report comprises information sourced from returns submitted to APRA and data provided by the ATO.
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BUZZ – Issue 20 – 19MARCH 2012 The report can be accessed in full at: http://www.apra.gov.au/Super/Publications/Documents/Super%20Quarterly%20 Performance%2020111231.pdf
Source: Australian Prudential Regulation Authority, Quarterly Superannuation Performance Statistics December 2011 (issued 8 March 2012)
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BUZZ – Issue 20 – 19MARCH 2012 FINANCIAL PLANNING
ASIC releases guidance on advertising of financial products
ASIC has recently released guidance to help promoters comply with their obligations in relation to the advertising of financial products. Primarily these obligations relate to not making false or misleading statements or being involved in deceptive or misleading conduct.
The guidance applies to: •
promoters of financial products and financial advice services. The promoter will sometimes be the product issuer, but can also be a third party such as a financial adviser, distributor or agent
•
publishers of promotions about financial products and financial advice services
The guidance builds on ASIC’s focus of promoting confident and informed investors and consumers and applies to any communication where the purpose is to inform consumers about or promote financial products or financial advice services. Importantly it applies to advertising communicated through any medium and in any form.
ASIC provides guidance at both a media-specific level and at a product-specific level and discusses the differing responsibilities of promoters and publishers.
The guide can be accessed in full at: http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg234-published-14February-2012.pdf/$file/rg234-published-14-February-2012.pdf
Source: ASIC, Regulatory Guide 234 ‘Advertising financial products and advice services: Good practice guidance’, February 2012
FOFA – PJC report released
The Parliamentary Joint Committee on Corporations and Financial Services (PJC) has released their report into the legislation relating to the FOFA reforms (the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011).
The PJC made 15 recommendations in their report, as follows: 1.
That subsection 962F(3) of the Corporations Amendment (Future of 11
BUZZ – Issue 20 – 19MARCH 2012 Financial Advice) Bill 2011 be reviewed with a view to providing access to recourse for consumers who have had fees wrongfully deducted 2.
That 'minimum disclosure' guidelines be included in the regulations of the Corporations Amendment (Future of Financial Advice) Bill 2011 for fee disclosure and opt-in notices, stipulating a standard for communication between financial advisers and their retail clients
3.
That the Explanatory Memorandum to the Corporations Amendment (Future of Financial Advice) Bill 2011 be amended to better explain the annual fee disclosure obligations for existing retail clients
4.
The committee recommends a revised Explanatory Memorandum to the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 be issued such that the final sentence in paragraph 1.33 of the Explanatory Memorandum reads: 'In identifying the advice that has in effect been sought by the client (including advice implicitly sought by the client), the provider must take into account the client's relevant circumstances.'
5.
The committee recommends that regulations pertaining to paragraph 964A(3) of the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 be drafted to include a materiality threshold to determine when a benefit is not presumed to be a volume-based shelfspace fee. The regulations should specify that full disclosure is required for the payment and receipt of these benefits
6.
The committee recommends that the Australian Securities and Investments Commission (ASIC) issue guidance material for platform operators who seek to substantiate a claim that a volume-based payment demonstrates a reasonable fee for service or a genuine value of scale efficiencies
7.
The committee recommends that the Australian Securities and Investments Commission (ASIC) conduct shadow shopping exercises on advice pertaining to life risk insurance outside superannuation post implementation of the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. ASIC should report its findings back to this committee within two years of the date the Bill commences
8.
That post-implementation, Treasury work with the Australian Securities and Investments Commission (ASIC) to monitor closely the quality of advice on the sale of risk insurance inside and outside superannuation and any market distortions that may occur
9.
That further material is provided in the Explanatory Memorandum to the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 to outline examples of legitimate training, such as practice management or client relationship skills. Legitimate forms of training should also be provided in the regulations
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BUZZ – Issue 20 – 19MARCH 2012 10.
That the Explanatory Memorandum for the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 be amended to provide clarity on the application of the $300 limit for soft-dollar benefits. Further, the committee recommends that examples of what is and is not deemed to be 'frequent or regular' should be stated in the Explanatory Memorandum and the regulations
11.
That the proposed consultations on the regulations for the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 include consideration of the potential impact of restricting soft-dollar benefits of professional development to within Australia and New Zealand and that no geographical restriction be placed on professional development where it is professional development focussed on education and training
12.
That ASIC provide regulatory guidance material on how Australian Authorised Deposit-taking Institutions (ADIs) can prove that remuneration does not 'reasonably influence' advice
13.
That the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 be amended so that the Timeshare industry is precluded from the bans on conflicted remuneration
14.
That the government should amend the footnote references to Rice Warner estimates in the regulation impact statements of the Explanatory Memorandums to both bills. The new footnote should be updated to reflect Rice Warner's revised estimate of the employment impact of the Future of Financial Advice reforms
15.
That there should be an independent review of the application of the Future of Financial Advice (FOFA) legislation. The review should be timed to comment constructively on how stakeholders have complied with, and interpreted the FOFA provisions. To this end, the committee recommends that an initial report should be given to government by the end of 2013 and a further report by the end of 2014
The report can be accessed in full at: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committee s?url=reports.htm
It is also worth noting that opposition members of the PJC issued a dissenting report on the legislation.
Source: Parliamentary Joint Committee on Corporations and Financial Services Corporations Amendment (Future of Financial Advice) Bill 2011 and Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011, February 2012 13
BUZZ – Issue 20 – 19MARCH 2012 ASIC updates Regulatory Guide 204
ASIC has updated RG 204 which relates to applying for and varying a credit licence. RG 204 was first issued in December 2009 and was most recently updated in June 2010.
The guide has been updated to reflect amendments to the application form, due to the following: •
The end of the transition period between credit registration and licensing
•
Minor legislative changes that have occurred since June 2010
•
Changes to ASIC’s policy on organisational competence and representative training for credit licensees that provide home loans (set out in RG 206)
•
Alterations to ASIC’s assessment process for credit licence applications to require bankruptcy checks for fit and proper people of the applicant (rather than credit history reports as is currently the case)
The guide can be accessed in full at: http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rg204-published-9March-2012.pdf/$file/rg204-published-9-March-2012.pdf
Source: ASIC, Regulatory Guide ‘Applying for and varying a credit licence’, March 2012
New AML/CTF Rules
The Government has released updated AML/CTF Rules, which amend several chapters of the rules and add a new chapter.
The amendments of particular substance are as follows: •
Chapters 8 and 9 – these chapters have been amended to require reporting entities to expressly state in their AML/CTF programs what obligations they have under the AML/CTF Act, and specify the appropriate systems and controls which they have implemented in regard to those obligations. Reporting entities have discretion in how they detail the description of the systems and controls which they have put in place, however, they must be an ‘appropriate’ response to the moneylaundering/terrorism-financing risk which the reporting entity has identified
•
Chapter 21 – this chapter provides an exemption from the AML/CTF Act in regard to the item 35 designated service (issuing or selling a security or derivative), where such transactions take place on domestic financial markets such as the Australian Stock Exchange. The amended rules extend this exemption to foreign financial markets when the foreign
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BUZZ – Issue 20 – 19MARCH 2012 financial market uses a proprietary system to undertake the transaction, and it is not reasonably practicable for the reporting entity to identify the customer through the use of that system. If it is reasonably possible to identify the customer on the foreign market using the applicable customer identification procedure as is required under the AML/CTF Act, then the reporting entity cannot use the exemption •
Chapter 28 – this chapter provides an exemption from conducting the applicable customer identification procedure in regard to the assignment, conveyance, sale or transfer of business. The amendments to this chapter remove uncertainty as to whether the chapter applies to voluntary transfers of business under the Financial Sector (Business Transfer and Group Restructure) Act 1999 by making it clear that such voluntary transfers are covered
•
Chapter 67 – this new chapter provides an exemption from the applicable customer identification procedure in regard to ‘warrants’
The Rules came into effect on 1 February 2012. To access them and the explanatory memorandum in full, please go to: http://www.comlaw.gov.au/Details/F2012L00111/Download
Source: Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 1) and explanatory memorandum
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BUZZ – Issue 20 – 19MARCH 2012 INSURANCE
APRA releases quarterly life and general insurance statistics for December 2011
1.
Life insurance
APRA has released their quarterly statistical report on life insurance which provides details of financial performance, financial position, solvency, capital adequacy and management capital across the industry.
It also contains details of the performance of individual product groups.
The information contained in the report is comprised mainly from information reported to APRA in compliance with prudential requirements and is based on the following four key considerations: •
adequate disclosure to assist in the protection of Australian life insurance policy holders;
•
the importance of commercial considerations for individual companies;
•
life insurance data which are already publicly available; and
•
the disclosure regime in existence prior to January 2008
The report is available in full on the APRA website and at the following link: http://www.apra.gov.au/lifs/Publications/Documents/LI%20Quarterly%20Perfor mance%2020111231.pdf
2.
General insurance
APRA has released their quarterly report on general insurance which includes detail of financial performance, financial position, key performance ratios, premiums and claims and capital adequacy across the industry. This information is provided in relation to both direct insurers and reinsurers.
This document has been enhanced from previous periods following APRA’s consultation on its general insurance statistical publications. The publication now includes additional statistics such as operating income and expenses, solvency, and more class of business statistics.
The report is available in full on the APRA website and at the following link: http://www.apra.gov.au/GI/Publications/Documents/GI%20Quarterly%20Perfor mance%2020111231.pdf
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BUZZ – Issue 20 – 19MARCH 2012 Source: Australian Prudential Regulation Authority, Quarterly Life Insurance Performance Statistics December 2011 (issued 6 March 2012) Australian Prudential Regulation Authority, Quarterly General Insurance Performance Statistics December 2011 (issued 1 March 2012)
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BUZZ – Issue 20 – 19MARCH 2012 HUMAN CAPITAL
Further reforms re executive remuneration
The Government has indicated they intend to implement further reforms in relation to executive remuneration including regarding clawback provisions. In addition, they are expected to include several recommendations made by the Corporations and Markets Advisory Committee (CAMAC) to improve disclosure in remuneration reports. The findings of the CAMAC report were set out in Issue 14 of Buzz.
The intention of the clawback reforms is to shift the onus onto listed companies to ensure they have provisions to clawback bonuses from executives if there has been a material misstatement of a company’s financial statements.
In this regard, it is proposed that the Corporations Act 2001 will be amended to require listed companies to disclose to shareholders through the remuneration report the steps they have taken to clawback bonuses and other remuneration where a material misstatement has occurred in relation to the company’s financial statements.
Draft legislation is expected to be released in the second half of 2012.
Source: David Bradbury MP, Parliamentary Secretary to the Treasurer, Media Release ‘Reforms to further enhance Australia’s executive remuneration framework’, 21 February 2012
ASIC issues advisory re greater disclosure in remuneration reports
Following a review of 50 remuneration reports of ASX300 companies, ASIC has issued a statement calling on companies to improve the disclosure of their remuneration arrangements for directors and executives.
ASIC has indicated that companies can still improve on the their disclosure in order to provide shareholders with a better understanding of why directors have adopted the remuneration arrangements they have and that they must provide sufficient detail on the remuneration arrangements to enable shareholders to assess their appropriateness in the company’s circumstances.
As an attachment to their advisory ASIC have included examples of best practice to assist companies.
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BUZZ – Issue 20 – 19MARCH 2012 Another aspect of the review was ways in which listed companies have managed the new voting exclusions that prohibit KMP and their closely related parties voting on the resolution to adopt the remuneration report. Some examples of these are also detailed in the advisory.
Source: ASIC, Advisory ‘ASIC calls for better executive remuneration disclosure’, Wednesday 29 February 2012
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BUZZ – Issue 20 – 19MARCH 2012 SEMINARS
April – May 2012 Please find below a selection of upcoming industry seminars which may be of interest to you. If you have any queries about these, please do not hesitate to contact us.
April 3 ANZIIF NSW, Introduction to General Insurance Workshop Sydney Go to http://www.theinstitute.com.au
April 10 ANZIIF VIC, Industrial Special risk Insurance Masterclass Melbourne Go to http://www.theinstitute.com.au
April 11 ASFA NSW, National Defined Benefits Discussion Group Sydney Go to http://www.superannuation.asn.au/
April 12 ASFA VIC, Super Reforms Series – SuperStream: Practical Guidance on the Data Standards Framwork Melbourne Go to http://www.superannuation.asn.au/
April 17 ANZIIF WA, Industrial Special risk Insurance Masterclass Perth Go to http://www.theinstitute.com.au
April 18 ASFA NSW, Super Reforms Series – SuperStream: Practical Guidance on the Data Standards Framwork Sydney Go to http://www.superannuation.asn.au/
April 23 ASFA QLD, Super Reforms Series – SuperStream: Practical Guidance on the Data Standards Framwork Brisbane Go to http://www.superannuation.asn.au/
April 27 FPA, Live Webinar, FOFA in Practice – Your Implementation Guide Go to https://members.fpa.asn.au/
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BUZZ – Issue 20 – 19MARCH 2012 May 3 ANZIIF NSW, TurksLegal Group Life Insurance Seminar Sydney Go to http://www.theinstitute.com.au
May 10 ANZIIF VIC, TurksLegal Group Life Insurance Seminar Melbourne Go to http://www.theinstitute.com.au
Aon Hewitt Limited ABN 48 002 288 646 AFS Licence 236667 While care has been taken in the production of this document and the information contained in it, Aon Hewitt does not make any representation as to the accuracy of this report and accepts no liability for any loss incurred by any person who may rely on it. In all cases, any recipient shall be entirely responsible for their use of this document. © 2012 Aon Hewitt
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