Chartered Accountants Superannuation Bulletin Edition 23/08

Welcome to the final edition of the Chartered Accountants Superannuation Bulletin for 2008. This edition calls for submissions to the federal government’s review of the retirement income system and announces some Institute staff movements in the area of wealth management. (Ed: Special thanks to Susan Orchard for all her work for the Institute.)

The next edition of the superannuation bulletin will be published on Friday 16 January 2009. The Institute will be closed over the Christmas period from 3pm on Wednesday, 24 December 2008 until Monday 5 January 2009.

The technical consultants who respond to member queries on financial services and superannuation matters will be unavailable from Monday, 22 December 2008 through to Monday, 12 January 2009.

Please send through any queries prior to Friday, 19 December 2008 or after Monday, 12 January 2009.

On behalf of the Institute, we wish members a safe and happy festive season.

Issue No 23 /2008 December 12 2008 1. ATO updates 2. News & Media Releases 3. Retirement Income System Review Consultation Paper 4. Super Clearing House 5. Institute Movements 6. Knowledge Centre 7. Training & Development

SMSF News - 7th Edition

In the 7th edition of 'SMSF News' on the ATO website you can find information on:

• SMSFs largest sector of super industry
• New Superannuation audit tool (eSAT)
• Completing the SMSF Annual Return
• Extra challenges in the current financial environment
• Annual returns must be lodged
• Review your Investment Strategy Regularly
• New draft ruling on interest deductions for certain uncommercial trust arrangements
• New draft ruling on in-house assets
• Not all contributions can be accepted
• Illegal Managed Investment Schemes

Super Publications and Forms Summary

This overview provides a summary of super publications, online resources and forms provided as part of the ATO's role in administering Australia’s superannuation system.

Recent changes to super have meant changes to most publications, online resources and forms, with many having been revised and new products created.

These publications, online resources and forms are for:

• Individuals
• Employers
• Super funds
• Self-managed super funds (SMSFs), and
• Professionals and auditors.

Historic Same-sex Reforms Pass Parliament

On Wednesday, 10 December 2008, Attorney-General Robert McClelland welcomed the passage through Parliament of historic legislation that will remove same-sex discrimination from a wide range of Commonwealth laws. The legislation removes discrimination in areas including superannuation, social security, taxation, Medicare, veteran’s affairs, workers’ compensation, and educational assistance.

ASIC Media Release - Review of 30 June 2008 Reports

ASIC has today issued guidance to entities preparing their end of calendar year financial and audit reports.The guidance incorporates specific issues identified through ASIC’s review of 30 June 2008 financial reports. ASIC is moving to publish the results of its regular reviews half-yearly so that entities are better informed about ASIC’s key areas of focus and the specific issues that should be addressed to comply with the relevant accounting standards.

FIDO News Issue 111, 8 December 2008

Advice on:

• Avoiding a financial 'hangover' in the New Year
• Tempting offers to change your credit card
• Travelling over the summer holidays?
• Casual work and super
• Offers out of the blue
• Storm and flood insurance

Releases from Hon. Nick Sherry - Minister of Superannuation & Corporate Law

Temporary Residents Bill Passed

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has welcomed the successful passage through Parliament of the Temporary Residents Superannuation Legislation Amendment Bill 2008.

The temporary residents' legislation provides that the superannuation of a temporary resident will become unclaimed and payable to the Australian Tax Office after the individual has departed Australia permanently and at least six months have passed and they have not claimed their savings.

Short Selling Bill Passes the Parliament

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has welcomed the successful passage through Parliament - unamended - of critical legislation to ban naked short selling, expand the corporate watchdog's powers and require the disclosure of short selling.

The federal government has called for submissions on the specific issues facing Australia’s retirement income system. The submissions will be presented to Australia’s Future Tax System Review panel who have been charged with reviewing and making recommendations on the adequacy of retirement income arrangements and the appropriateness of the current taxation arrangements. The panel is examining three specific issues or ‘pillars’ including, the age pension, the compulsory superannuation guarantee system and voluntary savings.

Submissions are due Friday, 27 February 2009. Interested members are therefore invited to provide their views and opinions for consideration in the Institute’s submission, by Friday, 13 February 2009, to financial services.

Questions being asked by the consultation paper include:

1. The Retirement Income System

Q1.1 In considering the future of Australia’s retirement income system, which objectives are relevant in setting retirement income policy? Does the current system of the Age Pension and compulsory and voluntary savings meet these objectives? If not, how should the system be changed to meet these objectives?

2. A broad and adequate Retirement Income System

Q2.1 As the SG system matures, it will become a greater part of an employee’s retirement income. What are the implications for individuals partially or fully excluded from the mature SG system (the self-employed, individuals with broken work patterns such as carers, women and migrants), and how can the retirement income system best accommodate these groups?

Q2.2 Noting that the adequacy of the Age Pension is being considered by the Pension Review, what is an appropriate concept of adequacy for the retirement income system? Should it be to ensure there is a minimum level of income in retirement, to replace a proportion of income earned prior to retirement, or some other alternative?

Q2.3 What should the role of the government be in assisting individuals to meet their retirement income expectations in relation to the support provided by the Age Pension, the level of compulsory savings and incentives to make additional savings? Should the role of government change as an individual’s income increases over their working life?

3. An acceptable Retirement Income System

Q3.1 Do the settings of the retirement income system, such as the level of SG and access to concessions, adequately consider the needs and preferences of individuals both before and after retirement?

Q3.2 Is the current level of superannuation income tax concessions appropriate and sustainable into the future? Are the current concessions properly targeted, and if not, how should they be reformed?

4. A robust Retirement Income System

Q4.1 At what age should an individual be able to access their superannuation and at what age should they become eligible for the Age Pension?

Q4.2 What is the role of individuals in dealing with investment and longevity risk in accumulating and drawing down their retirement income? Do financial markets provide the means to deal with these risks? If not, is there a role for government to address these shortcomings?

5. A simple and approachable Retirement Income System

Q5.1 In what ways does the retirement income system impose undue complexity and cost on retirees and workers? How could this complexity be reduced?

6. A sustainable Retirement Income System

Q6.1 The Age Pension serves two roles, as a safety-net for individuals who are unable to sufficiently save for their retirement and as an income supplement for many individuals who do save. What should be the role for the Age Pension and means testing in a future retirement income system and what impact does this have on its sustainability into the future?

Q6.2 In what ways does retirement income policy affect workforce participation decisions and what, if any, changes might reduce disincentives to work? Does the sustainability and cost of the retirement income system affect the workforce decisions of younger generations of workers?

Q6.3 What impact could financial intermediation have on the effectiveness of retirement income policy?

This is a final reminder for feedback on the two part discussion paper issued by the Hon. Nick Sherry. The purpose of this discussion paper is to invite feedback on:

• The issues associated with the implementation of the government's 2008-09 budget measure to establish an optional superannuation clearing house facility (discussed in Part A of the paper); and
• Possible initiatives aimed at improving the lost members framework (discussed in Part B of the paper).

Please email your feedback to superannuation@charteredaccountants.com.au

After 10 years, Susan Orchard, Superannuation Consultant is leaving the Institute to devote more time to her accounting and audit practice. During her time with the Institute Susan has represented members interests on various ATO discussion groups and panels where Susan is highly regarded by the ATO for her expertise and has built the Institute’s reputation in this area. Susan has also been involved in all of the Institute’s lobbying efforts and policy development relating to superannuation, particularly SMSFs. Susan has worked with Governments on behalf of the Institute in all regulatory and legislative policy development relating to superannuation over the last 10 years. In addition she has provided a valuable resource answering member queries.

While Susan is leaving, she will continue to assist the Institute providing member feedback on policy development and sit on the ATO’s Superannuation Approved Auditor Committee on behalf of the Institute and its members. Finally an enormous thank to Susan for her assistance, dedication and expertise over the years.

The Institute would also like to welcome Maria Siu, who will be Susan’s replacement as Superannuation Technical Consultant Maria has had extensive financial services experience particularly in the area of superannuation having previously worked as a technical manager for a number of consultancy groups, along with a host of financial services companies, including, BT Portfolio Services, Deutsche Bank, Godfrey Pembroke, Colonial Financial Planning, and held a team leader position at APRA. The Institute would like to formally welcome Maria who will begin her role on Wednesday, 14 January 2009.

Superannuation and financial planning resources

Christmas is fast approaching and so we thought it timely to provide you with an overview of the Knowledge Centre’s resources in the areas of superannuation and financial planning.

• The Retirement and Estate Planning Bulletin (LexisNexis): the Bulletin directs professionals to relevant commentary, key rulings and legislative developments impacting the retirement and estate planning environment.
• The Australian Superannuation Law Bulletin (LexisNexis): the publication contains articles written by leading practitioners in the area and covers key developments, legislation, rulings and case law.
• Business Source® Corporate database (EBSCO): the database contains international journals and magazines which you can search by topic or keyword, as well as industry profiles, country reports, company profiles, images and company SWOT analyses.
• Australia/NZ Reference Centre™ database (EBSCO): The database contains national and regional Australian newspapers, searchable by topic, keyword or company name.

The EBSCO databases can both be accessed from home or work via the Institute’s member website. Both databases have built in functionality that allows members and candidates to set up search alerts and table of content journal alerts. Simple and advanced training on these databases is available from the Knowledge Centre team.

• Sound Education in Superannuation: the Television Education Network’s (TEN) Sound Education in Superannuation CD series directs professionals to major issues impacting superannuation and self-managed superannuation funds (SMSFs). Each CD explores different topics and includes analysis of legislative developments, pertinent cases, and rulings.
• Popular self-managed superannuation funds (SMSF), superannuation, and financial planning print materials by leading publishers such as CCH and Thomson Reuters are available for loan or can be searched on your behalf by the Knowledge Centre team. Follow this link to view the Subject Gateway covering Superannuation

Christmas hours

The Knowledge Centre will close at 3pm on Wednesday, 24 December 2008 and reopen at 8.30am Monday, 5 January 2009.

Contact details

If you would like more information about these resources or training, please contact the Knowledge Centre team. We can be reached on 1800 809 828 or email us

Chartered Accountants SMSF Conference

Senator the Hon Nick Sherry will open the second annual SMSF Sydney Conference on Friday, 27 February 2009.

The conference will bring together industry experts from across Australia including state and government representatives from the Australian Securities and Investment Commission (ASIC), the Australian Taxation Office (ATO), including the Minister for Superannuation and Corporate Law, Senator the Hon Nick Sherry.

For the first time the conference will be held in both Melbourne and Sydney, (February 20th and 27th 2009 respectively).

Be sure to take advantage of the early bird offer - a 20% discount if you book before 25 January 2009

Disclaimer

This is an initiative of, and has been prepared by the Technical Standards Team of the Institute of Chartered Accountants in Australia. While every effort has been made to ensure the accuracy of the information contained therein, neither the Institute nor its employees shall be liable on any grounds whatsoever in respect of decisions or actions taken as a result of using this publication. The information provided is a general guide only and should not be used, relied on or treated as a substitute for specific professional advice or referral to the relevant specific standard.

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