An amendment to the Exposure Draft Superannuation Legislation was released by the government in December 2011. Known as the Exposure Draft Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012, this amendment added a number of covenants to the existing legislation document and increased the scope of obligations for trustees and licensees of superannuation entities with regard to offering insurance products. As part of the new legislation, licensees of registered superannuation entities (RSEs) which offer a MySuper product are required to follow a number of governing rules when advising clients on insurance matters.
These include taking into consideration the financial effects of obtaining a specific insurance policy on all its potential beneficiaries, making sure the cost of the insurance they offer doesn’t negatively impact retirement savings and taking all possible steps to pursue a claim if it is believed the claimant has a reasonable chance of success. Under these amendments, trustees are also expected to regularly devise and implement insurance strategies with the aim of benefiting the beneficiaries.
These more customer focused amendments are expected to take effect from July 2013 with more alterations likely to follow. Some of the anticipated future amendments include expected changes to the definitions of types of insurance and self insurance and additional requirements to be added to the scope of trustees’ and licensees’ duties and standards.
A draft taxation ruling was also released in December 2011, designed to clarify recent amendments to tax laws surrounding disability superannuation benefits. If these changes are approved, they are expected to take place from July 2011 and in future income tax years.