ATO out of step with APRA on pension treatment
The major accounting groups have urged the Australian Taxation Office (ATO) to harmonise its regulatory approach to pensions with that of the Australian Prudential Regulation Authority (APRA).
The accounting groups have pointed to inconsistencies between the approach adopted by the ATO on the cessation of pensions due to a failure to make minimum pension payments.
In submission to an ATO feedback forum, the joint account groups comprising CPA Australia, Chartered Accountants ANZ, the Institute of Public Accountants (IPA) and the SMSF Association said large segments of the industry “respectfully disagree with the ATO’s view that an underpayment of the minimum pension amount causes a pension to cease and cannot be rectified”.
It went on to cite an ATO letter to the industry associations earlier this year which states: “it is not possible for a pension to comply with the standards in one year, not comply the next, and then comply again in subsequent years” pointing out that this was at odds with how APRA operates under the Superannuation Industry (Supervision) Act (SIS Act).
“…we are aware of non-ABPs being treated differently for SIS purposes, despite having the same fundamental pension principles and tax outcome,” it said.
“We have also been told that APRA has waived certain pension requirements, ensuring continued compliance under SIS and avoiding unintended tax consequences. This includes scenarios where trustees have miscalculated pension amounts or failed to make a final payment in a given financial year.
“APRA’s actions in regulating large funds have direct income tax consequences, making it critical that both regulators maintain an aligned and consistent approach to the interpretation and application of SIS regulations. No segment of the superannuation sector should be unfairly disadvantaged when addressing annual pension underpayments,” the joint bodies said.
Of course Industry Funds can do whatever they want.
Regulatory Capture Corrupted APRA, ATO and ASIC prove yet again how biased they are to Industry Super.
How is this story about Industry funds vs everyone else. Seriously need to look at yourself. Your constant whining really is just beyond anyone normal. Industry funds are not the problem here. There are different regulatory bodies managing different regulations. The problem here is that one regulatory body interprets rules different from another. It has nothing to do with Industry funds vs everyone else. APRA are actually taking a reasonable approach – for ALL APRA regulated bodies, retail or Industry. ATO are taking a different approach on SMSFs.
Try to actually read an article before just blurting out the same comment EVERY SINGLE TIME
I’ll bet ya it’s Industry Funds getting the favorable treatment from APRA.
I believe you’re wrong on this issue because we constantly see double standards being applied to Industry Super Funds. I’m sure those individuals investing in Australian Super Social Aware Option, or in cases where it took 4 years to transfer monies to the spouse would agree. As for APRA being some type of regulator, and using the words “reasonable approach” I”m sorry but you lost me there too.
What a load of Poppycock !
Rules for Thee but not for ME !
If csnnot see the legal conflict ,you are enther blind or partisan ! Which is it ?
This is the equivalent of saying that no Fund should be disadvantaged by the NALI/NALE legislation… oh wait that legislation doesn’t apply to APRA Funds. SMSFs are disadvantaged there too.