ASFA contends that the current 30-day proposal does not adequately accommodate the time required to address and rectify breaches, especially when it comes to ensuring fair compensation for members. They highlighted that even minor issues could result in tax implications for the members, necessitating a thoughtful and fair approach.
ASFA has recommended amendments that would extend the relief period to 60 days. This adjustment, they argue, would provide a more realistic timeframe for dealing with complex situations. Alternatively, ASFA suggests aligning the breach reporting timeline with ASIC's RG 271 guidelines for internal dispute resolution (IDR), which allow for a 45-day response period for certain superannuation trustee complaints, excluding those related to death benefit distributions.
ASFA believes that adopting a 45-day period could offer more substantial relief and help synchronise regulatory timeframes across different instruments, ultimately reducing compliance costs. If neither option is accepted, ASFA advises that ASIC consider differentiating between financial and non-financial breaches, allowing more time for the former due to their complexity.
