Part 1 Preliminary
1.01 Name of Regulations [see Note 1]
These Regulations are the Superannuation Industry (Supervision) Regulations 1994.
1.02 Commencement [see Note 1]
The following provisions of these Regulations commence on 1 July 1994:
(a) Division 2.2;
(b) Subdivision 2.8.2;
(c) Regulations 3.10, 3.11 and 3.12;
(d) Division 6.5;
(e) Parts 9 and 10;
(f) Regulation 11.08;
(g) Part 12.
1.03 Interpretation
(1) In these regulations, unless the contrary intention appears:
1997 Tax Act means the Income Tax Assessment Act 1997.
account‑based pension means a pension that is provided in accordance with the rules of a fund that:
(a) are described in paragraph 1.06 (9A) (a); and
(b) meet the standards of subregulation 1.06 (9A).
accumulation fund means a regulated superannuation fund that is not a defined benefit fund.
accumulation interest means a superannuation interest that is not a defined benefit interest.
Act means the Superannuation Industry (Supervision) Act 1993.
adjusted base amount, in relation to a non‑member spouse at a particular date, means the adjusted base amount applicable to the non‑member spouse at that date worked out under Division 6.1A of the Family Law (Superannuation) Regulations 2001.
advance instalment of surcharge means the advance instalment payable under section 11 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997.
allocated pension means a pension that is provided under
rules of a superannuation fund that meet the standards of subregulation 1.06 (4).
allot, for Division 6.7, means to credit an amount from a member’s account to another account in the regulated superannuation fund held by, or created for, the receiving spouse otherwise than by transfer or roll‑over.
base amount payment split, in relation to a superannuation interest, means a payment split under which a base amount is allocated to the non‑member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.
benefit certificate has the meaning given by section 10 of the SG(A) Act.
capital gains tax exempt component has the same meaning as CGT exempt component in subsection 27A (1) of the Tax Act as in force immediately before 1 July 2007.
child contributions means contributions that are made to a regulated superannuation fund in respect of a child, other than:
(a) contributions made in respect of the child by, or on behalf of, an employer of the child; and
(b) contributions made by a child in respect of himself or herself.
Co‑contribution Act means the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003.
commencement day, in relation to a pension or an annuity, means the first day of the period to which the first payment of the pension or annuity relates.
contributions, in relation to a fund, includes:
(a) payments of shortfall components to the fund; and
(b) payments to the fund from the Superannuation Holding Accounts Special Account;
but does not include benefits that have been rolled over or transferred to the fund.
defined benefit fund means:
(a) a public sector superannuation scheme that:
(i) is a regulated superannuation fund; and
(ii) has at least 1 defined benefit member; or
(b) a regulated superannuation fund (other than a public sector superannuation scheme):
(i) that has at least 1 defined benefit member; and
(ii) some or all of the contributions to which (out
of which, together with earnings on those contributions, the benefits are to be paid) are not paid into a fund, or accumulated in a fund, in respect of any individual member but are paid into and accumulated in a fund in the form of an aggregate amount.
defined benefit interest has the meaning given by regulation 1.03AA.
defined benefit member means a member entitled, on retirement or termination of his or her employment, to be paid a benefit defined, wholly or in part, by reference to either or both of the following:
(a) the amount of:
(i) the member’s salary at a particular date, being the date of the termination of the member’s employment or of the member’s retirement or an earlier date; or
(ii) the member’s salary averaged over a period before retirement; or
(b) a specified amount.
eligible rollover fund has the same meaning as in Part 24 of the Act.
Note As to what is an eligible rollover fund for Part 24 of the Act, see section 242 of the Act and regulation 10.01.
eligible spouse contribution means a contribution made by an individual to a superannuation fund:
(a) to provide superannuation benefits for the individual’s spouse, whether or not the benefits would be payable to the dependants of the individual’s spouse if the spouse dies before or after becoming entitled to receive the benefits; and
(b) in circumstances in which the individual:
(i) could not have deducted the contribution under section 82AAC of the Tax Act in the 2006–07 income year or a previous year; and
(ii) cannot deduct the contribution under Subdivision 290‑B of the 1997 Tax Act in the 2007–08 income year or a later year.
eligible termination payment has the same meaning as in Subdivision AA of Division 2 of Part III of the Tax Act.
employer contribution, in relation to a regulated superannuation fund, means a contribution by, or on behalf of, an employer‑sponsor of the fund.
EPSSS means an exempt public sector superannuation scheme.
excluded member means:
(a) a member of a regulated superannuation fund that is a self managed superannuation fund; or
(b) a defined benefit member of a defined benefit fund.
FHSA Act means the First Home Saver Accounts Act 2008.
flag lifting agreement means a flag lifting agreement under Part VIIIB of the Family Law Act 1975.
FSR commencement has the same meaning as in section 1410 of the Corporations Act 2001.
Note The FSR commencement is the commencement of item 1 of Schedule 1 to the Financial Services Reform Act 2001.
full‑time, in relation to being gainfully employed, means gainfully employed for at least 30 hours each week.
gainfully employed means employed or self‑employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
growth phase has the meaning given by regulation 1.03AB.
industrial authority means:
(a) a court, or a tribunal or other body or person, constituted under a law of the Commonwealth, a State or a Territory with power of conciliation or arbitration in relation to industrial disputes; or
(b) a special board constituted under the law of a State relating to factories.
life expectancy has the same meaning as life expectation factor in section 27H of the Tax Act.
lost member has the meaning given by regulation 1.03A.
lost RSA holder has the meaning given by regulation 1.06 of the RSA Regulations.
market linked annuity means an annuity provided under a contract that meets the standards of subregulation 1.05 (10).
market linked income stream means an annuity provided under a contract that meets the standards of subregulation 1.05 (10), or a pension paid under rules that meet the standards of subregulation 1.06 (8).
market linked pension means a pension paid under rules that meet the standards of subregulation 1.06 (8).
member, except in Part 2, means:
(a) in relation to an approved deposit fund — a depositor in the fund; and
(b) in relation to a regulated superannuation fund — a member of the fund; and
(c) in relation to a PST — a unit‑holder in the PST.
Note The meaning of the term ‘member’ in Part 2 is defined in subregulation 2.01 (2).
member‑protection standards means the standards set out in subregulation 5.17 (2) and regulation 5.18.
member spouse, in relation to a superannuation interest that is subject to a payment split, means the person who is the member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.
minimum requisite benefit, in relation to a member, means the benefit certified by an actuary in a relevant benefit certificate as the minimum benefit in respect of the member.
non‑member spouse, in relation to a superannuation interest that is subject to a payment split, means the person who is the non‑member spouse in relation to the interest under Part VIIIB of the Family Law Act 1975.
old Regulations means these Regulations as in force immediately before the FSR commencement.
operative time, for a payment split, means the operative time under Part VIIIB of the Family Law Act 1975 for the payment split.
part‑time, in relation to being gainfully employed, means gainfully employed for at least 10 hours, and less than 30 hours, each week
payment split means a payment split under Part VIIIB of the Family Law Act 1975.
payment split notice means a notice given by a trustee under regulation 7A.03.
pension age:
(a) in relation to a person other than a person mentioned in paragraph (b) — has the meaning given by subsections 23 (5A), (5B), (5C) or (5D) of the Social Security Act 1991; and
(b) in relation to a person who is a veteran within the meaning of the Veterans’ Entitlement Act 1986 — has the meaning that it has in section 5QA of that Act.
percentage‑only interest has the meaning given by Part VIIIB of the Family Law Act 1975.
percentage payment split, in relation to a superannuation interest, means a payment split under a superannuation agreement, flag lifting agreement or splitting order that specifies a percentage that is to apply to all splittable payments in respect of the interest.
protected member has the meaning given by regulation 1.03B.
PST means a pooled superannuation trust.
receiving spouse has the meaning given by regulation 6.46.
relevant benefit certificate, in relation to a regulated superannuation fund, means a benefit certificate that relates to a defined benefit superannuation scheme (within the meaning of the SG(A) Act) of which the fund forms part.
relevant entity means:
(a) a public offer entity; or
(b) an approved deposit fund.
Note The expression relevant entity is defined in the same terms as in section 22 of the Act.
reserves, in relation to a superannuation entity, means reserves maintained under section 115 of the Act.
reviewable decision means:
(a) a decision of APRA under paragraph 1.05 (2) (c) refusing to approve a sum payable as benefit; or
(b) a decision of the Regulator under paragraph 1.06 (2) (c) refusing to approve a sum payable as benefit; or
(c) a decision of the Regulator refusing to approve the use of a factor under subregulation 1.08 (2); or
(d) a decision of APRA under paragraph 4.08A (2) (e) refusing to approve an arrangement for management and control of a fund; or
(e) a decision of the Regulator under paragraph 4.12 (2) (b), 6.27B (b) or 7A.16 (8) (b) to not determine the form of consent; or
(f) a decision of APRA to refuse to suspend or vary an obligation of a trustee under subregulation 6.37 (6); or
(g) a decision of the Regulator under subparagraph 7A.03J (2) (a) (ii) refusing to allow a longer period for a rollover or transfer of a non-member spouse’s interest; or
(h) a decision of the Regulator under paragraph 7A.03K (2) (b) or 7A.13 (7) (b) refusing to allow a longer period to pay a lump sum; or
(i) a decision of the Regulator under subparagraph 7A.12 (4) (a) (ii) refusing to allow a longer period for rolling over or transferring transferable benefits; or
(j) a decision of the Regulator under paragraph 7A.16 (3) (b) refusing to allow a longer period to allocate, rollover or transfer non-member spouse entitlements; or
(k) a decision of the Regulator to give a direction to a trustee to obtain a new or a replacement funding and solvency certificate under subregulation 9.09 (1A); or
(l) a decision of the Regulator under subregulation 9.24 (2) refusing to approve an actuary’s recommendation for a defined benefit fund; or
(m) a decision of the Regulator under subregulation 9.44 (2) refusing to approve an actuary’s recommendation for an accumulation fund; or
(n) a decision of APRA refusing to approve a proposed element of an actuarial basis for calculation of value A under subregulation 12.05 (5) or (6); or
(o) a decision of APRA refusing to approve a proposed assumption or element of an actuarial basis for calculation of value B under subregulation 12.06 (5); or
(p) a decision of APRA under regulation 12.08 to specify a day on or before which an application is to be made; or
(q) a decision of APRA refusing to approve an application to transfer a PJFC under subregulation 12.12 (2) or 12.13 (2); or
(r) a decision of APRA under regulation 12.14 to revoke an approval of an application to transfer a PJFC; or
(s) a decision of the Regulator refusing to consent to an alteration of accrued benefits under subparagraph 13.16 (2) (a) (ii) or (d) (ii); or
(t) a decision of the Regulator to confirm or vary a reviewable decision under regulation 13.25.
RSA Act means the Retirement Savings Accounts Act 1997.
RSA holder has the same meaning given to the term holder in section 9 of the RSA Act.
RSA institution has the meaning given by section 11 of the RSA Act.
RSA Regulations means the Retirement Savings Accounts Regulations.
SG(A) Act means the Superannuation Guarantee (Administration) Act 1992.
shortfall component has the same meaning as in the SG(A) Act.
splittable payment means a splittable payment under Part VIIIB of the Family Law Act 1975.
splitting order means a splitting order under Part VIIIB of the Family Law Act 1975.
successor fund, in relation to a transfer of benefits of a member from a fund (called the original fund), means a fund which satisfies the following conditions:
(a) the fund confers on the member equivalent rights to the rights that the member had under the original fund in respect of the benefits;
(b) before the transfer, the trustee of the fund has agreed with the trustee of the original fund that the fund will confer on the member equivalent rights to the rights that the member had under the original fund in respect of the benefits.
superannuation agreement means a superannuation agreement under Part VIIIB of the Family Law Act 1975.
superannuation contributions surcharge means the superannuation contributions surcharge imposed by the Superannuation Contributions Tax Imposition Act 1997.
Superannuation Holding Accounts Special Account means the Special Account established by section 8 of the Small Superannuation Accounts Act 1995.
superannuation lump sum has the meaning given by subsection 995‑1 (1) of the 1997 Tax Act.
Tax Act means the Income Tax Assessment Act 1936.
transferable benefits, in relation to a superannuation interest that is subject to a payment split and in relation to the non‑member spouse in relation to that interest, means benefits that are equal to:
(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non‑member spouse when the benefits are transferred — the adjusted base amount less the amount of any fees payable by the non‑member spouse in respect of the payment split; or
(b) if the payment split is a base amount payment split and
an adjusted base amount does not apply to the non‑ member spouse when the benefits are transferred —
the base amount allocated to the non‑member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees payable by the non‑member spouse in respect of the payment split; or
(c) if the payment split is a percentage payment split:
(i) for an entitlement, in respect of an accumulation interest in the growth phase that is not a partially vested accumulation interest, to which subparagraph (ii) does not apply — the amount in relation to the interest at the time when the benefits are transferred, determined in the way in which a court would determine an amount in accordance with regulation 28 and subregulation 31 (2A) of the Family Law (Superannuation) Regulations 2001, multiplied by the specified percentage, less the amount of any fees payable by the non‑member spouse in respect of the payment split; or
(ii) for an entitlement in respect of an interest in a self‑managed superannuation fund — the amount
in relation to the interest at the time when the benefits are transferred, determined by a method that a court might use if the court were acting under paragraph 90MT (2) (b) of the Family Law Act 1975, multiplied by the specified percentage, less the amount of any fees payable by the non‑member spouse in respect of the payment split; or
(iii) for an entitlement in respect of any other interest — the amount in relation to the interest at the time when the benefits are transferred, determined in the way in which a court would determine an amount in accordance with the relevant method in Part 5 of the Family Law (Superannuation) Regulations 2001, multiplied by the specified percentage, less the amount of any fees payable by the non‑member spouse in respect of the payment split.
unfunded public sector superannuation scheme means
a regulated superannuation fund that is declared to be
an unfunded defined benefits superannuation scheme
under regulation 2A of the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997.
withdrawal benefit, in relation to a member of a superannuation entity, means the total amount of the benefits that would be payable to:
(a) the member; and
(b) the trustee of another superannuation entity or an EPSSS in respect of the member; and
(c) an RSA in respect of the member; and
(d) another person or entity because of a payment split in respect of the member’s interest in the superannuation entity;
if the member voluntarily ceased to be a member.
(2) In these Regulations, other than Part 2:
fund means:
(a) an approved deposit fund; or
(b) a regulated superannuation fund.
Note For the meaning of fund in Part 2, see subregulation 2.01 (3).
1.03A Lost member
(1) A member of a fund is taken to be a lost member at a particular time if:
(a) the member is uncontactable, that is, if and only if:
(i) the fund has never had an address for him or her; or
(ii) 2 written communications or, if the trustee so chooses, 1 written communication have been sent by the fund to the member’s last known address and returned unclaimed; or
(b) the member is an inactive member, that is, if and only if:
(i) he or she has been a member of the fund for longer than 2 years; and
(ia) he or she was, at the time he or she joined the fund, a person in respect of whom there was in effect a contribution arrangement of the kind referred to in subsection 16 (5) of the Act (which deals with
the definition of standard employer‑sponsored member); and
(ii) the fund has not received a contribution or rollover in respect of him or her within the last 5 years of his or her membership of the fund; or
(c) the member joined the fund from another fund or an EPSSS as a lost member; or
(ca) the member joined the fund from an RSA provider as a lost RSA holder;
unless:
(d) within the last 2 years of the member’s membership, the trustee of the fund has verified that the member’s address is correct and has no reason to believe that that address is now incorrect; or
(e) the member is permanently excluded from being a lost member.
(2) For the purposes of subregulation (1), and subject to subregulation (3), a member of a fund is permanently excluded from being a lost member if:
(a) the member is an inactive member who has indicated by a positive act (for example, deferring a benefit in the fund) that he or she wishes to continue to be a member of the fund; or
(b) the member has contacted the fund at any time after the time at which he or she joined the fund and indicated that he or she wishes to continue being a member of the fund; or
(c) the member is a member of a self managed superannuation fund.
(3) The trustee of a fund may decide that:
(a) a member, a class of members, or all members of the fund cannot be permanently excluded from becoming lost members; or
(b) a member who is, a class of members who are, or all members of the fund who are permanently excluded from being lost is or are not to continue being permanently excluded from being lost.
Note The consequences of a member becoming a lost member are:
(a) that the trustee of the fund must report certain details to the Commissioner (see regulation 5 of the Superannuation (Unclaimed Money and Lost Members) Regulations 1999); and
(b) that, if the member is transferred to another fund or an EPSSS (the transferee fund), the trustee of the transferring fund must supply certain information about the member to the trustee of the transferee fund (see regulation 7.9.81 of the Corporations Regulations 2001).
There may also be consequences regarding the information to be supplied to the member (see regulation 7.9.61 of, and Part 14 of Schedule 10A to, the Corporations Regulations 2001).
1.03AA Defined benefit interest
(1) A superannuation interest is a defined benefit interest if it is:
(a) an interest in an unfunded public sector superannuation scheme that has at least 1 defined benefit member; or
(b) an interest that entitles the member who holds the interest, when benefits in respect of the interest become payable, to be paid a benefit defined, wholly or in part, by reference to one or more of the following:
(i) the amount of:
(A) the member’s salary at the date of the termination of the member’s employment, the date of the member’s retirement, or another date; or
(B) the member’s salary averaged over a period; or
(C) salary, or allowance in the nature of salary, payable to another person (for example, a judicial officer, a member of the Commonwealth or a State Parliament, a member of the Legislative Assembly of a Territory);
(ii) a specified amount;
(iii) specified conversion factors.
(2) However, a superannuation interest is not a defined benefit interest if the only benefits defined by reference to any of the amounts or factors mentioned in subparagraphs (1) (b) (i) to (iii) are benefits payable on death or invalidity.
1.03AB Meaning of growth phase
(1) A superannuation interest is taken to be in the growth phase at a particular date if the member satisfies 1 of the following requirements at that date:
(a) the member has not satisfied a relevant condition of release;
(b) the member has satisfied a relevant condition of release but no benefit has been paid in respect of the superannuation interest, and no action has been taken by or for the member under the governing rules of the fund to cash any benefit that the member is entitled to be paid as a result of satisfying the condition of release;
(c) the member has satisfied a relevant condition of release and a benefit (other than a benefit that is paid as a pension) has been paid to or for the benefit of the member or, if the member has died, to his or her legal personal representative, but no action has been taken by or for the member, or his or her legal personal representative, under the governing rules of the fund to receive any other benefit that the member, or his or her estate, is entitled to be paid as a result of satisfying the condition of release.
(2) In this regulation:
relevant condition of release means a condition of release mentioned in item 101, 102, 103, 106, 108, 201, 202, 203 or 206 of Schedule 1.
1.03B Meaning of protected member
(1) A protected member is a member of a regulated superannuation fund who has a withdrawal benefit, or a benefit of any other type that is payable on leaving the fund otherwise than voluntarily (not including any applicable exit fee), that:
(a) is less than $1 000; and
(b) contains, or contained, benefits that are mandated employer‑financed benefits (within the meaning of subregulation 5.01 (1)).
(2) An excluded member is not a protected member.
(3) If the trustee of a regulated superannuation fund has rolled
over or transferred an amount that is the whole or part
of a member’s withdrawal benefit to another regulated superannuation fund or to an approved deposit fund, RSA or EPSSS in accordance with Division 6.5, the member is not a protected member of the fund from which the amount was rolled over or transferred.
(4) For subregulation (1), a benefit in a fund is taken to contain or to have contained mandated employer‑financed benefits unless:
(a) if the benefits arose in relation to contributions made before 1 July 1995 — the trustee of the fund reasonably believes otherwise; or
(b) if the benefits arose in relation to contributions made on or after 1 July 1995 — the trustee of the fund knows otherwise.
1.04 Prescribed matters (Act, s 10)
(1) The purpose of this regulation is to prescribe matters for the purposes of various definitions in section 10 of the Act.
Approved auditor
(2) For the purposes of the definition of approved auditor in section 10 of the Act, the following class of persons is specified, namely, individuals each of whom:
(a) in the case of an auditor of a self managed superannuation fund:
(i) is, under Division 2 of Part 9.2 of the Corporations Act 2001, registered, or taken to be registered, as an auditor; or
(ii) is associated with a professional organisation specified in Schedule 1AAA in the manner specified, in respect of that organisation, in that Schedule; or
(iii) is the Auditor‑General of the Commonwealth, a State or Territory, or is a delegate of the Auditor‑ General; and
(b) in the case of an auditor of a superannuation entity other than a self managed superannuation fund:
(i) is, under Division 2 of Part 9.2 of the Corporations Act 2001, registered, or taken to be registered, as an auditor; or
(ii) is the Auditor‑General of the Commonwealth, a State or Territory, or is a delegate of the Auditor‑ General.
Excluded approved deposit fund
(4) For the purposes of paragraph (b) of the definition of excluded approved deposit fund in section 10 of the Act, the following condition is specified, namely, that the fund must be:
(a) a fund established before 1 July 1994; or
(b) a fund that was established on or after 1 July 1994 using eligible termination payments (within the meaning of the Tax Act as in force when the fund was established) of the fund’s beneficiary that had an initial value of at least $400 000; or
(c) a fund that is established after 1 July 2007 using a superannuation lump sum or an employment termination payment (within the meaning of the 1997 Tax Act) of the fund’s beneficiary that had an initial value of at least $400 000.
Exempt public sector superannuation scheme
(4A) For the purposes of the definition of exempt public sector superannuation scheme in section 10 of the Act the schemes listed in Schedule 1AA are specified.
(4AA) A scheme that is listed, or established by or operated under legislation that is listed, in Schedule 1AA ceases to be an exempt public sector superannuation scheme at the time it is registered as a registrable superannuation entity under Division 2 of Part 2B of the Act.
(4B) If a scheme listed in Schedule 1AA is re‑named, the reference to that scheme includes the scheme as so re‑named.
(4C) Subregulation (4A) has effect in relation to a scheme specified in Part 1 of Schedule 1AA in respect of the 1994‑95 and 1995‑96 years of income of that scheme.
(4D) Subregulation (4A) applies in relation to a scheme specified in Part 2 of Schedule 1AA during the 1996‑97 year of income of that scheme.
(4E) Subregulation (4A) applies in relation to a scheme specified in Part 3 of Schedule 1AA during the 1997‑1998 year of income, and subsequent years of income, of that scheme.
Pooled superannuation trust
(5) For the purposes of paragraph (b) of the definition of pooled superannuation trust in section 10 of the Act, the definition applies to a unit trust that is:
(a) used only for investing the following kinds of assets:
(i) assets of a regulated superannuation fund;
(ii) assets of an approved deposit fund;
(iii) assets of a PST;
(iv) virtual PST assets of a life insurance company within the meaning of the 1997 Tax Act;
(v) segregated exempt assets of a life insurance company within the meaning of the 1997 Tax Act; and
Note 1 PST is defined in regulation 1.03 to mean a pooled superannuation trust.
Note 2 Life insurance company, segregated exempt assets and virtual PST asset, are defined in subsection 995‑1 (1) of the 1997 Tax Act.
(b) a resident unit trust within the meaning of section 102H of the Tax Act; and
(c) a trust in relation to which each of the following circumstances applies:
(i) the trustee has confirmed in writing an intention to have the trust treated as a PST;
(ii) the confirmation was given to APRA, in the approved form, and signed and dated by the trustee;
(iii) the confirmation was given not later than:
(A) the time of lodgment, in accordance with subsection 36 (1) of the Act, of the first return in relation to the trust after 12 July 2000 (the time of lodgment); or
(B) such later time as allowed, in writing, by APRA, either generally or in a particular case and whether allowed before or after the time of lodgment;
(iv) the confirmation has not been withdrawn.
(6) The trustee of a unit trust may confirm an intention under paragraph (5) (c) despite anything in the governing rules of the unit trust.
(7) The trustee of a unit trust mentioned in subregulation (6) must inform APRA in writing as soon as practicable after the unit trust ceases to be a PST because paragraph (5) (a) or (b) ceases to apply to the trust.
(8) The trustee may withdraw the confirmation of an intention under paragraph (5) (c) by giving to APRA a notice of the withdrawal that is signed and dated by the trustee.
1.04AAAA Interdependency relationships (Act s 10A)
(1) For paragraph 10A (3) (a) of the Act, the following matters are to be taken into account in determining whether 2 persons have an interdependency relationship, or had an interdependency relationship immediately before the death of 1 of the persons:
(a) all of the circumstances of the relationship between the persons, including (where relevant):
(i) the duration of the relationship; and
(ii) whether or not a sexual relationship exists; and
(iii) the ownership, use and acquisition of property; and
(iv) the degree of mutual commitment to a shared life; and
(v) the care and support of children; and
(vi) the reputation and public aspects of the relationship; and
(vii) the degree of emotional support; and
(viii) the extent to which the relationship is one of mere convenience; and
(ix) any evidence suggesting that the parties intend the relationship to be permanent;
(b) the existence of a statutory declaration signed by one of the persons to the effect that the person is, or (in the case of a statutory declaration made after the end of the relationship) was, in an interdependency relationship with the other person.
(2) For paragraph 10A (3) (b) of the Act, 2 persons have an interdependency relationship if:
(a) they satisfy the requirements of paragraphs 10A (1) (a) to (c) of the Act; and
(b) one or each of them provides the other with support and care of a type and quality normally provided in a close personal relationship, rather than by a mere friend or flatmate.
Examples of care normally provided in a close personal relationship rather than by a friend or flatmate
1. Significant care provided for the other person when he or she is unwell.
2. Significant care provided for the other person when he or she is suffering emotionally.
(3) For paragraph 10A (3) (b) of the Act, 2 persons have an interdependency relationship if:
(a) they have a close personal relationship; and
(b) they do not satisfy the other requirements set out in subsection 10A (1) of the Act; and
(c) the reason they do not satisfy the other requirements is that they are temporarily living apart.
Example for paragraph (3) (c)
One of the persons is temporarily working overseas or is in gaol.
(4) For paragraph 10A (3) (b) of the Act, 2 persons have an interdependency relationship if:
(a) they have a close personal relationship; and
(b) they do not satisfy the other requirements set out in subsection 10A (1) of the Act; and
(c) the reason they do not satisfy the other requirements is that either or both of them suffer from a disability.
(5) For paragraph 10A (3) (b) of the Act, 2 persons do not have an interdependency relationship if 1 of them provides domestic support and personal care to the other:
(a) under an employment contract or a contract for services; or
(b) on behalf of another person or organisation such as a government agency, a body corporate or a benevolent or charitable organisation.
1.04AAA Modified meaning of member (Act s 15B)
(1) This regulation applies if:
(a) a superannuation interest in a fund is subject to a payment split, or a non‑member spouse interest has been created under regulation 7A.03B; and
(b) the non‑member spouse in relation to the interest was not a member of the fund immediately before the operative time for the payment split.
(2) For the purposes of the provisions of the Act set out in Table 1, the non‑member spouse is to be treated as being a member of the fund in which the interest is held from the later of:
(a) the operative time for the payment split; and
(b) the time that the trustee receives the agreement or order under which the payment split is effected.
Table 1
| Item | Provision |
| 1 | subsection 17A, except subsection (5) (definition of self managed superannuation fund) |
| 2 | section 65 (lending to members of regulated superannuation fund prohibited) |
| 3 | Part 8 (in‑house asset rules applying to regulated superannuation funds) |
(3) For subsection 17A (5) of the Act, the non‑member spouse is to be treated as being a member of the fund in which the interest is held from the later of:
(a) the end of 6 months after the operative time for the payment split; and
(b) the end of 6 months after the time that the trustee receives the agreement or order under which the payment split is effected.
(4) For regulation 1.03A, the non‑member spouse is to be treated as being a member of the fund in which the interest is held from the operative time for the payment split.
(5) For subsection 17A (5) of the Act, a non‑member spouse who became a member of a fund as a result of the creation of a non‑member spouse interest under Division 7A.1A is not treated as a member of the fund until the earlier of:
(a) 6 months after the operative time for the payment split; and
(b) the time that the non‑member spouse’s interest in the fund is confirmed under regulation 7A.03H or 7A.03I.
1.04A Specified body or person (Act s 19)
For subsection 19 (4) of the Act, the Commissioner of Taxation is specified.
1.04AA Self managed superannuation funds — persons not taken to be employees (Act s 17A (8))
(1) For the purposes of paragraph 17A (8) (b) of the Act, a class of persons is a specified class if it comprises persons each of whom is, in relation to a member of a superannuation fund, an exempt person mentioned in subregulation (2).
(2) A person is an exempt person in relation to a member of a superannuation fund if:
(a) the person is an employer‑sponsor of the fund; and
(b) the member is a director of the employer‑sponsor.
(3) For the purposes of paragraph 17A (8) (b) of the Act, a class of persons is a specified class if it comprises persons each of whom is a member of a superannuation fund in relation to which the following circumstances exist:
(a) the person is the employer, but not a relative, of a member of the fund (the employee);
(b) another member is the employer, and a relative, of that employee.
Part 1A Annuities and pensions
Division 1A.1
1.05A Interpretation
In this Division, unless a contrary intention appears:
rolled over means paid as a superannuation lump sum within the superannuation system.
1.05 Meaning of annuity (Act, s 10)
(1) A benefit that is provided by a life insurance company or a registered organisation is taken to be an annuity for the purposes of the Act if:
(a) it arises under a contract that:
(i) meets the standards of subregulation (11A); and
(ii) does not permit the capital supporting the annuity to be added to by way of contribution or rollover after the annuity has commenced; and
(b) for a benefit purchased on or after 3 August 1993 and before 1 July 2007 — it is purchased with the whole or part of a rolled over amount within the meaning given to that term by section 27A of the Tax Act; and
(c) for a benefit purchased on or after 1 July 2007 — it is purchased with the whole or part of:
(i) a roll‑over superannuation benefit within the meaning of the 1997 Tax Act; or
(ii) a directed termination payment within the meaning of the Income Tax (Transitional Provisions) Act 1997; and
(d) in the case of a contract to which paragraph (11A) (a) applies — the contract also meets the standards of regulation 1.07D; and
(e) in the case of a contract to which paragraph (11A) (b) applies — the contract also meets the standards of regulation 1.07B.
(1A) A benefit that is provided by a life insurance company or a registered organisation that commenced to be paid before 20 September 2007 is taken to be an annuity for the purposes of the Act if:
(a) it arises under a contract that meets the standards of subregulation (2), (4), (6), (7), (8), (9) or (10); and
(b) for a benefit purchased on or after 3 August 1993 and before 1 July 2007 — it is purchased with the whole or part of a rolled over amount within the meaning given to that term by section 27A of the Tax Act; and
(c) for a benefit purchased on or after 1 July 2007 and before 20 September 2007 — it is purchased with the whole or part of:
(i) a roll‑over superannuation benefit within the meaning of the 1997 Tax Act; or
(ii) a directed termination payment within the meaning of the Income Tax (Transitional Provisions) Act 1997; and
(d) for a benefit that arises under a contract that meets the standards of subregulation (9) and is purchased by the primary beneficiary on or after 20 September 1998 — the commencement day under the contract is the day when the benefit was purchased; and
(e) for a benefit that arises under a contract that meets the standards of subregulation (4) — the contract also meets the standards of regulation 1.07A; and
(f) for a benefit that arises under a contract that meets the standards of subregulation (2), (6), (7) or (9) — the contract also meets the standards of regulation 1.07B; and
(g) for a benefit that arises under a contract that meets the standards of subregulation (8):
(i) the benefit can be taken to consist of two benefits:
(A) an annuity that arises from that part of the contract that provides for payments whose size is not fixed; and
(B) an annuity that arises from that part of the contract that provides for payments whose size in a year is fixed; and
(ii) the contract meets the standards of regulation
1.07A in relation to the annuity mentioned in sub‑subparagraph (i) (A); and
(iii) the contract meets the standards of regulation 1.07B in relation to the annuity mentioned in sub‑ subparagraph (i) (B); and
(h) for a benefit that arises under a contract that meets the standards of subregulation (10), and has a commencement day on or after 20 September 2004 — the contract also meets the standards of regulation 1.07C.
(1B) A benefit provided by a life insurance company or registered organisation that commenced to be paid on or after
20 September 2007 is taken to be an annuity for the purposes of the Act if:
(a) the benefit arises under a contract that meets the standards of:
(i) subregulation 1.05 (9) or (10); and
(ii) subregulation 1.05 (11A); and
(b) the benefit was purchased with a rollover superannuation benefit that resulted from the commutation of:
(i) an annuity provided under a contract that meets the standards of subregulation 1.05 (2), (9) or (10); or
(ii) a pension provided under rules that meet the standards of subregulation 1.06 (2), (7) or (8); or
(iii) a pension provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations; and
(c) for a benefit that arises under a contract that meets the standards of subregulation (9) — the contract also meets the standards of regulation 1.07B; and
(d) for a benefit that arises under a contract that meets the standards of subregulation (10) — the contract also meets the standards of regulation 1.07C.
(2) A contract for the provision of a benefit (in this subregulation called the annuity) meets the standards of this subregulation if it ensures that:
(a) the annuity is paid at least annually throughout the life of the primary beneficiary in accordance with paragraphs (b) and (c) and, if there is a reversionary beneficiary:
(i) throughout the reversionary beneficiary’s life; or
(ii) if he or she is a child of the primary beneficiary or
of a former reversionary beneficiary under the annuity — at least until his or her 16th birthday; or
(iii) if the person referred to in subparagraph (ii) is a full‑time student at age 16 — at least until the end of his or her full‑time studies or until his or her 25th birthday (whichever occurs sooner); and
(b) the size of payments of benefit in a year is fixed, allowing for variation only:
(i) as specified in the contract; or
(ii) to allow commutation to pay a superannuation contributions surcharge; or
(iii) to allow an amount to be paid under a payment split and reasonable fees in respect of the payment split to be charged; and
(c) unless APRA otherwise approves, the sum payable as benefit in each year to the primary beneficiary or to the reversionary beneficiary, as the case may be, is:
(i) if CPIc is not less than CPIp — not less than SPp; or
(ii) if CPIc is less than CPIp — not less than:
where:
CPIc means the quarterly CPI first published by the Australian Statistician for the second‑last quarter before the day on which payment is to be made.
CPIp means the quarterly CPI first published by the Australian Statistician for the same quarter in the immediately preceding year.
SPp means the sum payable in the immediately preceding year;
and
(d) the amount paid as the purchase price is wholly converted into annuity income; and
(e) the annuity does not have a residual capital value; and
(f) the annuity cannot be commuted except in any of the following circumstances:
(i) the annuity is not funded from the commutation of:
(A) an annuity that meets the standards of this subregulation or subregulation (3), (9) or (10); or
(B) a pension that meets the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) a pension that meets the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the annuity;
(ii) the commutation is made to the benefit of a reversionary beneficiary on the death of the primary beneficiary and within one of the following periods after the commencement day of the annuity:
(A) if the primary beneficiary’s life expectancy on the commencement day, rounded up to the next whole number, is a period less than 20 years — that period;
(B) in any other case — 20 years;
(iii) the superannuation lump sum resulting from the commutation is transferred directly for the purpose of purchasing another benefit provided under:
(A) a contract that meets the standards of this subregulation or subregulation (3), (9) or (10); or
(B) rules that meet the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(iv) to pay a superannuation contributions surcharge;
(v) to give effect to an entitlement of a non‑member spouse under a payment split;
(vi) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(vii) the annuity was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(g) if the annuity reverts or is commuted, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion or the commutation; and
(h) the annuity cannot be transferred to a person other than a reversionary beneficiary on the death of the primary beneficiary or of another reversionary beneficiary; and
(i) the capital value of the annuity, and the income from it, cannot be used as security for a borrowing.
(3) For the purpose of determining whether an annuity meets the standards in subregulation (2), it is immaterial that:
(a) if the primary beneficiary dies within the period used
for subparagraph (2) (f) (ii), a surviving reversionary beneficiary may obtain a payment equal to the total payments that the primary beneficiary would have received, if the primary beneficiary had not died, from the day of the death until the end of the period; and
(b) if the primary beneficiary dies within the period used for subparagraph (2) (f) (ii) and there is no surviving reversionary beneficiary, an amount, not exceeding the difference between the sum of the amounts paid to the primary beneficiary and the sum of the amounts that would have been so payable in the period, is payable to the primary beneficiary’s estate; and
(c) if the primary beneficiary dies within the period used for subparagraph (2) (f) (ii) and there is a surviving reversionary beneficiary who also dies within that period, there is payable to the reversionary beneficiary’s estate an amount determined as described in paragraph (b) as if that paragraph applied to the reversionary beneficiary.
(4) A contract for the provision of a benefit (in this subregulation called the annuity):
(a) that does not meet the standards in subregulation (2); and
(b) that does not fix the size of payments of benefit in a year; and
(c) under which the commencement day is on or after 22 December 1992;
meets the standards of this subregulation if the contract at least ensures that:
(d) the standards in paragraphs (2) (h) and (i) are met; and
(e) payments are made at least annually; and
(f) for an annuity that has a commencement day on or after
22 December 1992 and before 1 January 2006 — the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than, respectively, the maximum and minimum limits calculated in accordance with Schedule 1A; and
(g) for an annuity that has a commencement day on or after 1 January 2006 — the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than the following:
(i) for payments made during the period starting on 1 January 2006 and ending on 30 June 2006 — the respective maximum and minimum limits for the year calculated in accordance with 1 of the following Schedules:
(A) Schedule 1A;
(B) Schedule 1AAB;
(ii) for payments made on or after 1 July 2006 — the respective maximum and minimum limits for the year calculated in accordance with Schedule 1AAB.
Note 22 December 1992 was the date of Royal Assent to the Taxation Laws Amendment (Superannuation) Act 1992.
(5) For the purpose of determining whether an annuity meets the standards in subregulation (4), it is immaterial:
(a) that:
(i) the commencement day of the annuity occurs on or after 1 June in a financial year; and
(ii) the contract does not ensure that payments in that financial year meet the standard in that subregulation for the minimum amount; or
(b) that the contract does not ensure that the payments in the year in which the annuity is to end meet the standard in that subregulation for the minimum amount.
(6) A contract for the provision of a benefit (in this subregulation called the annuity):
(a) that does not meet the standards of subregulation (2); and
(b) that fixes the size of the payments of benefit in a year, allowing for variation only as specified in the contract or to allow payments to be made under a payment split; and
(c) under which the commencement day is on or after 1 July 1994;
meets the standards of this subregulation if the contract at least ensures that:
(d) the standards in paragraphs (2) (g), (h) and (i) are met; and
(e) except in relation to payments, by way of commutation, for superannuation contributions surcharge, variation in payments from year to year does not exceed, in any year, the average rate of increase of the CPI in the preceding 3 years; and
(f) payments in accordance with paragraph (b) are made at least annually; and
(g) the amount paid as the purchase price is wholly converted into annuity income.
(7) A contract for the provision of a benefit (in this subregulation called the annuity) that:
(a) does not meet the standards of subregulation (2); and
(b) provides for payments whose size in a year is fixed, allowing for variation only as specified in the contract; and
(c) provides for additional payments (in this subregulation called bonus payments);
(d) the commencement day of which is on or after 1 July 1994;
meets the standards of this subregulation if it at least ensures that:
(e) in respect of the fixed‑size payments — the standards in subregulation (6) are met; and
(f) the fixed‑size payments amount to at least 50% of:
(i) if the provider provides annuities of the kind specified in subregulation (6) — the amount that would be payable if the annuity were wholly of that kind; or
(ii) if the provider does not provide annuities of the kind specified in subregulation (6) — the fixed‑size payments are at least equal in amount to 50% of the interest payable on Commonwealth bonds that have the same value as the purchase price of the annuity and that most closely correspond in term to the term of the annuity; and
(g) the amounts of the bonus payments (if any) are reasonably proportional to the investment income from which the payments purport to be derived; and
(h) the amount of a bonus payment (if any) is notified in writing by the provider each year and is paid to the beneficiary in the year next following (except when deferral of the payment would not result, in any future year, in the rate of increase in size of the total payments for the year exceeding the average rate of increase of the CPI in the preceding 3 years).
(8) A contract for the provision of a benefit (in this subregulation called the annuity):
(a) that does not meet all the standards in any other provision of this regulation; and
(b) under which the commencement day is on or after 22 December 1992; and
(c) that provides for:
(i) payments whose size in a year is fixed, allowing for variation only as specified in the contract; and
(ii) additional payments whose size is not fixed, derived from the application of part of the purchase price to investments by allocation of the annuity provider;
meets the standards of this subregulation if it at least ensures that:
(d) in respect of fixed‑size payments — if the commencement day is on or after 1 July 1994, the standards in subregulation (6) are met; and
(e) in respect of payments whose size is not fixed — the standards in subregulation (4) are met.
Note 22 December 1992 was the date of Royal Assent to the Taxation Laws Amendment (Superannuation) Act 1992.
(9) A contract for the provision of a benefit (in this subregulation called the annuity) meets the standards of this subregulation if the contract ensures that:
(a) for an annuity that has a commencement day before 20 September 2004:
(i) if the life expectancy of the primary beneficiary on the commencement day is less than 15 years — the annuity is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day, rounded up, at the primary beneficiary’s option, to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) if the life expectancy of the primary beneficiary
on the commencement day is 15 years or more — the annuity is paid at least annually to the
primary beneficiary or to a reversionary beneficiary throughout a period that is not less than 15 years but not more than the primary beneficiary’s life expectancy on the commencement day, rounded up, at the primary beneficiary’s option, to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; and
(b) for an annuity that has a commencement day on or after 20 September 2004:
(i) the annuity is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day, rounded up to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) the annuity is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy mentioned in subparagraph (i) calculated, at the option of the primary beneficiary, as if the primary beneficiary were up to 5 years younger on the commencement day; or
(iia) if the annuity has a commencement day on or after 1 January 2006 — the annuity is paid at least annually to the primary beneficiary or reversionary beneficiary throughout a period that is not less than the period available under subparagraph 1.05 (9) (b) (i), and not more than the greater of the following periods:
(A) the maximum period available under subparagraph 1.05 (9) (b) (ii);
(B) the period of years equal to the number that is the difference between the age attained by the primary beneficiary at his or her most recent birthday before the commencement day, and 100; or
(iii) if:
(A) the annuity is an annuity that reverts to a surviving spouse on the death of the primary beneficiary; and
(B) the life expectancy of the primary beneficiary’s spouse is greater than the life expectancy of the primary beneficiary; and
(C) the primary beneficiary has not chosen
to make an arrangement mentioned in subparagraph (i), (ii) or (iia) for the annuity;
the annuity is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to:
(D) the life expectancy of the spouse on the commencement day; or
(E) the life expectancy of the spouse calculated, at the option of the primary beneficiary, as if the spouse were up to 5 years younger on the commencement day; or
(F) if the annuity has a commencement day on
or after 1 January 2006 — a period that
is not less than the period available under sub‑subparagraph 1.05 (9) (b) (iii) (D), and not more than the greater of the following periods:
(I) the maximum period available under sub‑subparagraph 1.05 (9) (b) (iii) (E);
(II) the period of years equal to the number that is the difference between the age attained by the spouse at his or her most recent birthday before the commencement day, and 100;
at the option of the primary beneficiary, and rounded up to the next whole number if the life expectancy of the spouse, or the period, does not consist of a whole number of years; and
(c) the total amount of the payment, or payments, to be made in the first year after the commencement day (not taking commuted amounts into account) is fixed and that payment, or the first of those payments, relates to the period commencing on the day the benefit was purchased; and
(d) the total amount of the payments to be made in a year other than the first year after the commencement day (not taking commuted amounts into account) does not fall below the total amount of the payments made in the immediately preceding year (the previous total), and does not exceed the previous total:
(i) if CPIc is less than or equal to 4% — by more than 5% of the previous total; or
(ii) if CPIc is more than 4% — by more than CPIc + 1%;
where:
CPIc is the change (if any), expressed as a percentage, determined by comparing the quarterly CPI first published by the Australian Statistician for the second‑last quarter before the day on which the first of those payments is to be made and the quarterly CPI first published by the Australian Statistician for the same quarter in the immediately preceding year;
and
(e) the total amount of the payments to be made in a year in accordance with paragraph (c) or (d) may be varied only:
(i) to allow commutation to pay a superannuation contributions surcharge; or
(ii) to allow an amount to be paid under a payment split and reasonable fees to be charged in respect of the payment split; and
(f) the amount paid as the purchase price is wholly converted into annuity income; and
(g) the annuity does not have a residual capital value; and
(h) the annuity cannot be commuted except in any of the following circumstances:
(i) the annuity is not funded from the commutation of:
(A) an annuity that meets the standards of this subregulation or subregulation (2), (3) or (10); or
(B) a pension that meets the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) a pension that meets the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the annuity;
(ii) subject to subparagraph (iv), by payment, on the death of the primary beneficiary, to the benefit of a reversionary beneficiary or, if there is no reversionary beneficiary, to the estate of the primary beneficiary;
(iii) subject to subparagraph (iv), by payment, on the death of a reversionary beneficiary, to the benefit of another reversionary beneficiary or, if there is no other reversionary beneficiary, to the estate of the reversionary beneficiary;
(iv) for subparagraphs (ii) and (iii), if the primary beneficiary has opted, under subparagraph (b) (iii), for a period worked out in relation to the life expectancy or age of the primary beneficiary’s spouse — the annuity cannot be commuted until the death of both the primary beneficiary and the spouse;
(v) the superannuation lump sum resulting from the commutation is transferred directly to the purchase of another benefit that is:
(A) an annuity provided under a contract that meets the standards of subregulation (2), (3) or (10) or this subregulation; or
(B) a pension that is provided under rules that meet the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(vi) to pay a superannuation contributions surcharge;
(vii) to give effect to an entitlement of a non‑member spouse under a payment split;
(viii) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(ix) the annuity was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(i) if the annuity reverts, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion; and
(j) if the annuity is commuted, the commuted amount cannot exceed the benefit that was payable immediately before the commutation; and
(k) the annuity cannot be transferred to a person except:
(i) on the death of the primary beneficiary, to a reversionary beneficiary or, if there is no reversionary beneficiary, to the estate of the primary beneficiary; or
(ii) on the death of a reversionary beneficiary, to another reversionary beneficiary or, if there is no other reversionary beneficiary, to the estate of the reversionary beneficiary; and
(l) the capital value of the annuity, and the income from it, cannot be used as security for a borrowing.
(10) A contract for the provision of a benefit (market linked annuity) meets the standards of this subregulation if the contract ensures that:
(a) the market linked annuity:
(i) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day of the annuity, rounded up to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy mentioned in subparagraph (i) calculated, at the option of the primary beneficiary, as if the primary beneficiary were up to 5 years younger on the commencement day; or
(iia) if the annuity has a commencement day on or after 1 January 2006 — the annuity is paid at least annually to the primary beneficiary or reversionary beneficiary throughout a period that is not less than the period available under subparagraph 1.05 (10) (a) (i), and not more than the greater of the following periods:
(A) the maximum period available under subparagraph 1.05 (10) (a) (ii);
(B) the period of years equal to the number that is the difference between the age attained by the primary beneficiary at his or her most recent birthday before the commencement day, and 100; or
(iii) if:
(A) the annuity is an annuity that reverts to a surviving spouse on the death of the primary beneficiary; and
(B) the life expectancy of the primary beneficiary’s spouse is greater than the life expectancy of the primary beneficiary; and
(C) the primary beneficiary has not chosen
to make an arrangement mentioned in subparagraph (i), (ii) or (iia) for the annuity;
the annuity is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to:
(D) the life expectancy of the spouse on the commencement day; or
(E) the life expectancy of the spouse calculated, at the option of the primary beneficiary, as if the spouse were up to 5 years younger on the commencement day; or
(F) if the annuity has a commencement day on or after 1 January 2006 — a period that is not less than the period available under sub‑subparagraph 1.05 (10) (a) (iii) (D), and not more than the greater of the following periods:
(A) the maximum period available under sub‑subparagraph 1.05 (10) (a) (iii) (E);
(B) the period of years equal to the number that is the difference between the age attained by the spouse at his or her most recent birthday before the commencement day, and 100;
at the option of the primary beneficiary, and rounded up to the next whole number if the life expectancy of the spouse, or the period, does not consist of a whole number of years; and
(b) the total amount of the payments to be made in a year (excluding payments by way of commutation but including payments made under a payment split) is determined in accordance with Schedule 6; and
(c) the market linked annuity does not have a residual capital value; and
(d) the market linked annuity cannot be commuted except in any of the following circumstances:
(i) the annuity is not funded from the commutation of:
(A) another annuity that is provided under a contract that meets the standards of subregulation (2), (3) or (9) or this subregulation; or
(B) a pension that is provided under rules that meet the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the annuity;
(ii) subject to subparagraph (iii), on the death of the primary beneficiary or reversionary beneficiary, by payment of:
(A) a lump sum or a new annuity to one or more dependants of either the primary beneficiary or reversionary beneficiary; or
(B) a lump sum to the legal personal representative of either the primary beneficiary or reversionary beneficiary; or
(C) if, after making reasonable enquiries, the provider of the annuity is unable to find a person mentioned in sub‑subparagraph (A) or (B) — a lump sum to another individual;
(iii) for subparagraph (ii), if the primary beneficiary has opted, under subparagraph (a) (iii), for a period worked out in relation to the life expectancy or age of the primary beneficiary’s spouse — the market linked annuity cannot be commuted until the death of both the primary beneficiary and the spouse;
(iv) the superannuation lump sum resulting from the commutation is transferred directly to the purchase of another benefit that is:
(A) an annuity provided under a contract that meets the standards of subregulation 1.05 (2), (3) or (9) or this subregulation; or
(B) a pension that is provided under rules that meet the standards of subregulation 1.06 (2), (3), (7) or (8); or
(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(v) to pay a superannuation contributions surcharge;
(vi) to give effect to an entitlement of a non‑member spouse under a payment split;
(vii) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(viii) the annuity was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(e) if the market linked annuity reverts, it does not have a reversionary component greater than 100% of the account balance immediately before the reversion; and
(f) if the market linked annuity is commuted, the commutation amount cannot exceed the account balance immediately before the commutation; and
(g) the market linked annuity can be transferred only:
(i) on the death of the primary beneficiary:
(A) to 1 of the dependants of the primary beneficiary; or
(B) to the legal personal representative of the primary beneficiary; or
(ii) on the death of the reversionary beneficiary:
(A) to 1 of the dependants of the reversionary beneficiary; or
(B) to the legal personal representative of the reversionary beneficiary; and
(h) the capital value of the market linked annuity, and the income from it, cannot be used as security for a borrowing.
(11) A contract mentioned in subregulation (10) is not prevented from meeting the standards of that subregulation by reason only that the contract provides that, if the commencement day of the annuity is on or after 1 June in a financial year, no payment is required to be made for that financial year.
(11A) A contract for the provision of a benefit (the annuity) meets the standards of this subregulation if the contract ensures that payment of the annuity is made at least annually, and also ensures that:
(a) for an annuity in relation to which there is an account balance attributable to the annuitant — the total of payments in any year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 1 of Schedule 7; and
(b) for an annuity that is not described in paragraph (a):
(i) both of the following apply:
(A) the contract does not provide for a residual capital value, commutation value or withdrawal benefit greater than 100% of the purchase price of the annuity;
(B) the total of payments in any year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 2 of Schedule 7; or
(ii) each of the following applies:
(A) the annuity is payable throughout the life of the beneficiary (primary or reversionary), or for a fixed term of years that is no greater than the difference between the primary beneficiary’s age on the commencement day and age 100;
(B) the amount paid as the purchase price is wholly converted into annuity payments;
(C) there is no arrangement for an amount (or a percentage of the purchase price) prescribed by the contract to be returned to the recipient when the annuity ends;
(D) the total of payments from the annuity in the first year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 2 of Schedule 7;
(E) the total of payments from the annuity in a subsequent year cannot vary from the total of payments in the previous year unless the variation is as a result of an indexation arrangement or the transfer of the annuity to another person;
(F) if the annuity is commuted, the commutation amount cannot exceed the benefit that was payable immediately before the commutation; or
(iii) the standards of subregulation (2) are met; and
(c) the annuity is transferable to another person only on the death of the beneficiary (primary or reversionary, as the case may be); and
(d) the capital value of the annuity and the income from it cannot be used as a security for a borrowing.
(11B) A contract for the provision of a benefit does not meet the standards of any of subregulations (2) to (11A) if, in relation to the death of the annuity recipient on or after 1 July 2007, the annuity is transferred or paid to a person who would not be eligible to be paid a benefit in the form of an annuity under subregulation 6.21 (2A) or (2B).
(12) Despite regulation 9 of the Income Tax Regulations 1936, for an annuity that has a commencement day on or after 20 September 2004 and on or before 31 December 2004, one of the following life tables are to be used in ascertaining the life expectancy of a person under this regulation:
(a) the most recently published Australian Life Tables;
(b) the 1995‑97 Australian Life Tables.
(13) In this regulation:
indexation arrangement, in relation to an annuity, means an arrangement specified in the contract for the provision of the annuity that:
(a) results in the total amount of annuity payments in each year:
(i) increasing by the same percentage factor; or
(ii) being adjusted in line with movements in the Consumer Price Index; or
(iii) being adjusted in line with movements in an index of average weekly earnings published by the Australian Statistician; or
(iv) being adjusted in accordance with subparagraph (ii) or (iii) but with an increase capped at a maximum level; and
(b) ensures that, unless APRA otherwise approves, an adjustment is made at least annually to the amount of the annuity payments.
1.06 Meaning of pension (Act, s 10)
(1) A benefit is taken to be a pension for the purposes of the Act if:
(a) it is provided under rules of a superannuation fund that:
(i) meet the standards of subregulation (9A); and
(ii) do not permit the capital supporting the pension to be added to by way of contribution or rollover after the pension has commenced; and
(b) in the case of rules to which paragraph (9A) (a) applies — the rules also meet the standards of regulation 1.07D; and
(c) in the case of rules to which paragraph (9A) (b) applies — the rules also meet the standards of regulation 1.07B.
(1A) A benefit that commenced to be paid before 20 September 2007 is taken to be a pension for the purposes of the Act if:
(a) it is provided under rules of a superannuation fund that meet the standards of subregulation (2), (4), (6), (7) or (8); and
(b) where the primary beneficiary became entitled to the benefit on or after 20 September 1998 under rules of a superannuation fund that meet the standards of subregulation (7) — those rules provide that the commencement day is the day when the primary beneficiary became entitled to the pension; and
(c) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (4) — the rules also meet the standards of regulation 1.07A; and
(d) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (2), (6) or (7) — the rules also meet the standards of regulation 1.07B; and
(e) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (8), and has a commencement day on or after 20 September 2004 — the rules also meet the standards of regulation 1.07C.
(1B) A benefit that commenced to be paid on or after 20 September 2007 is taken to be a pension for the purposes of the Act if:
(a) the benefit arises under rules of a superannuation fund that meet the standards of:
(i) subregulation 1.06 (7) or (8); and
(ii) subregulation 1.06 (9A); and
(b) the benefit was purchased with a rollover superannuation benefit that resulted from the commutation of:
(i) an annuity provided under a contract that meets the standards of subregulation 1.05 (2), (9) or (10); or
(ii) a pension provided under rules that meet the standards of subregulation 1.06 (2), (7) or (8); or
(iii) a pension provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations; and
(c) for a benefit that arises under rules that meet the standards of subregulation (7) — the rules also meet the standards of regulation 1.07B; and
(d) for a benefit that arises under rules that meet the standards of subregulation (8) — the rules also meet the standards of regulation 1.07C.
(2) Rules meet the standards of this subregulation if they ensure that:
(a) the pension is paid at least annually throughout the life of the primary beneficiary in accordance with paragraphs (b) and (c) and, if there is a reversionary beneficiary:
(i) throughout the reversionary beneficiary’s life; or
(ii) if he or she is a child of the primary beneficiary or of a former reversionary beneficiary under the pension — at least until his or her 16th birthday; or
(iii) if the person referred to in subparagraph (ii) is a full‑time student at age 16 — at least until the end of his or her full‑time studies or until his or her 25th birthday (whichever occurs sooner); and
(b) the size of payments of benefit in a year is fixed, allowing for variation only:
(i) as specified in the governing rules; or
(ii) to allow commutation to pay a superannuation contributions surcharge; or
(iii) to allow an amount to be paid under a payment split and reasonable fees in respect of the payment split to be charged; and
(c) unless the Regulator otherwise approves, the sum payable as benefit in each year to the primary beneficiary or to the reversionary beneficiary, as the case may be, is:
(i) if CPIc is not less than CPIp — not less than SPp; or
(ii) if CPIc is less than CPIp — not less than:
where:
CPIc means the quarterly CPI first published by the Australian Statistician for the second‑last quarter before the day on which payment is to be made.
CPIp means the quarterly CPI first published by the Australian Statistician for the same quarter in the immediately preceding year.
SPp means the sum payable in the immediately preceding year;
and
(d) the pension does not have a residual capital value; and
(e) the pension cannot be commuted except in any of the following circumstances:
(i) the pension is not funded from the commutation of:
(A) an annuity that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or
(B) a pension that meets the standards of this subregulation or subregulation (3), (7) or (8); or
(C) a pension that meets the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the pension;
(ii) the commutation is made to the benefit of a reversionary beneficiary on the death of the primary beneficiary and within one of the following periods after the commencement day of the pension:
(A) if the primary beneficiary’s life expectancy on the commencement day, rounded up to the next whole number, is a period less than 20 years — that period;
(B) in any other case — 20 years;
(iii) the superannuation lump sum resulting from the commutation is transferred directly for the purpose of purchasing another benefit provided under:
(A) rules that meet the standards of this subregulation or subregulation (3), (7) or (8); or
(B) a contract that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or
(C) terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(iv) to pay a superannuation contributions surcharge;
(v) to give effect to an entitlement of a non‑member spouse under a payment split;
(vi) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(vii) the pension was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(f) if the pension reverts or is commuted, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion or the commutation; and
(g) the pension is not able to be transferred to a person other than a reversionary beneficiary on the death of the primary beneficiary or of another reversionary beneficiary; and
(h) the capital value of the pension and the income from it, cannot be used as security for a borrowing.
(3) For the purpose of determining whether rules meet the standards in subregulation (2), it is immaterial that:
(a) if the primary beneficiary dies within the period used
for subparagraph (2) (e) (ii), a surviving reversionary beneficiary may obtain a payment equal to the total payments that the primary beneficiary would have received, if the primary beneficiary had not died, from the day of the death until the end of the period; and
(b) if the primary beneficiary dies within the period used
for subparagraph (2) (e) (ii) and there is no surviving reversionary beneficiary, an amount, not exceeding the difference between the sum of the amounts paid to the primary beneficiary and the sum of the amounts that would have been so payable in the period, is payable to the primary beneficiary’s estate; and
(c) if the primary beneficiary dies within the period used
for subparagraph (2) (e) (ii) and there is a surviving reversionary beneficiary who also dies within that period, there is payable to the reversionary beneficiary’s estate an amount determined as described in paragraph (b) as if that paragraph applied to the reversionary beneficiary.
(4) Rules:
(a) that do not meet the standards in subregulation (2); and
(b) that do not fix the size of payments of benefit in a year; and
meet the standards of this subregulation if they at least ensure that:
(c) the standards in paragraphs (2) (g) and (h) are met; and
(d) payments are made at least annually; and
(e) for a pension that has a commencement day on or after
22 December 1992 and before 1 January 2006 — the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than, respectively, the maximum and minimum limits calculated in accordance with Schedule 1A; and
(f) for a pension that has a commencement day on or after 1 January 2006 — the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than the following:
(i) for payments made during the period starting on 1 January 2006 and ending on 30 June 2006 — the respective maximum and minimum limits for the year calculated in accordance with 1 of the following Schedules:
(A) Schedule 1A;
(B) Schedule 1AAB;
(ii) for payments made on or after 1 July 2006 — the respective maximum and minimum limits for the year calculated in accordance with Schedule 1AAB.
Note 22 December 1992 was the date of Royal Assent to the Taxation Laws Amendment (Superannuation) Act 1992.
(5) For the purpose of determining whether rules meet the standards in subregulation (4), it is immaterial:
(a) that:
(i) the commencement day of the pension occurs on or after 1 June in a financial year; and
(ii) the rules do not provide for the payment of an amount in that financial year that meets the standard for the minimum amount in that subregulation; or
(b) that the rules do not ensure that the payments in the year in which the pension is to end meet the standard for the minimum amount in that subregulation.
(6) Rules:
(a) that do not meet the standards in subregulation (2); and
(b) that provide that the size of the payments of benefit in a year is fixed, allowing for variation only as specified in the rules or to allow payments to be made under a payment split; and
(c) under which the commencement day is on or after 1 July 1994;
meet the standards in this subregulation if they at least ensure that:
(d) the standards in paragraphs (2) (f), (g) and (h) are met; and
(e) except in relation to payments, by way of commutation, for superannuation contributions surcharge, variation in payments from year to year does not exceed, in any year, the average rate of increase of the CPI in the preceding 3 years; and
(f) payments in accordance with the contracted size are made at least annually; and
(g) if, under the rules, the pension can be commuted — except if conversion is in relation to a commutation to pay a superannuation contributions surcharge, the conversion to a lump sum is limited to a sum that is not greater than the sum determined by applying the appropriate pension valuation factor under Schedule 1B to the pension as if the commencement day were the day on which the commutation occurs.
(7) Rules meet the standards of this subregulation if the rules ensure that:
(a) for a pension that has a commencement day before 20 September 2004:
(i) if the life expectancy of the primary beneficiary on the commencement day is less than 15 years — the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day, rounded up, at the primary beneficiary’s option, to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) if the life expectancy of the primary beneficiary on the commencement day is 15 years or more — the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period that is not less than 15 years but not more than the primary beneficiary’s life expectancy on the commencement day, rounded up, at the primary beneficiary’s option, to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; and
(b) for a pension that has a commencement day on or after 20 September 2004:
(i) the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day, rounded up to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy mentioned in subparagraph (i) calculated, at the option of the primary beneficiary, as if the primary beneficiary were up to 5 years younger on the commencement day; or
(iia) if the pension has a commencement day on or after 1 January 2006 — the pension is paid at least annually to the primary beneficiary or reversionary beneficiary throughout a period that is not less than the period available under subparagraph 1.06 (7) (b) (i), and not more than the greater of the following periods:
(A) the maximum period available under subparagraph 1.06 (7) (b) (ii);
(B) the period of years equal to the number that is the difference between the age attained by the primary beneficiary at his or her most recent birthday before the commencement day, and 100; or
(iii) if:
(A) the pension is a pension that reverts to a surviving spouse on the death of the primary beneficiary; and
(B) the life expectancy of the primary beneficiary’s spouse is greater than the life expectancy of the primary beneficiary; and
(C) the primary beneficiary has not chosen to make an arrangement mentioned in subparagraph (i), (ii) or (iia) for the pension;
the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to:
(D) the life expectancy of the spouse on the commencement day; or
(E) the life expectancy of the spouse calculated, at the option of the primary beneficiary, as if the spouse were up to 5 years younger on the commencement day; or
(F) if the pension has a commencement day on or after 1 January 2006 — a period that is not less than the period available under sub‑subparagraph 1.06 (7) (b) (iii) (D), and not more than the greater of the following periods:
(I) the maximum period available under sub‑subparagraph 1.06 (7) (b) (iii) (E);
(II) the period of years equal to the number that is the difference between the age attained by the spouse at his or her most recent birthday before the commencement day, and 100;
at the option of the primary beneficiary, and rounded up to the next whole number if the life expectancy of the spouse, or the period, does not consist of a whole number of years; and
(c) the total amount of the payment, or payments, to be made in the first year after the commencement day (not taking commuted amounts into account) is fixed and that payment, or the first of those payments, relates to the period commencing on the day the primary beneficiary became entitled to the pension; and
(d) the total amount of the payments to be made in a year other than the first year after the commencement day (not taking commuted amounts into account) does not fall below the total amount of the payments made in the immediately preceding year (the previous total), and does not exceed the previous total:
(i) if CPIc is less than or equal to 4% — by more than 5% of the previous total; or
(ii) if CPIc is more than 4% — by more than CPIc + 1%;
where:
CPIc is the change (if any), expressed as a percentage, determined by comparing the quarterly CPI first published by the Australian Statistician for the second‑last quarter before the day on which the first of those payments is to be made and the quarterly CPI first published by the Australian Statistician for the same quarter in the immediately preceding year;
and
(e) the total amount of the payments to be made in a year in accordance with paragraph (c) or (d) may be varied only:
(i) to allow commutation to pay a superannuation contributions surcharge; or
(ii) to allow an amount to be paid under a payment split and reasonable fees in respect of the payment split to be charged; and
(f) the pension does not have a residual capital value; and
(g) the pension cannot be commuted except in any of the following circumstances:
(i) the pension is not funded from the commutation of:
(A) an annuity that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or
(B) a pension that meets the standards of this subregulation or subregulation (2), (3) or (8); or
(C) a pension that meets the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the pension;
(ii) subject to subparagraph (iv), by payment, on the death of the primary beneficiary, to the benefit of a reversionary beneficiary or, if there is no reversionary beneficiary, to the estate of the primary beneficiary;
(iii) subject to subparagraph (iv), by payment, on the death of a reversionary beneficiary, to the benefit of another reversionary beneficiary, or, if there is no other reversionary beneficiary, to the estate of the reversionary beneficiary;
(iv) for subparagraphs (ii) and (iii), if the primary beneficiary has opted, under subparagraph (b) (iii), for a period worked out in relation to the life expectancy or age of the primary beneficiary’s spouse — the pension cannot be commuted until the death of both the primary beneficiary and the spouse;
(v) the superannuation lump sum resulting from the commutation is transferred directly to the purchase of another benefit that is:
(A) an annuity provided under a contract that meets the standards of subregulation (2), (3) (9) or (10); or
(B) a pension that is provided under rules that meet the standards of subregulation 1.06 (2), (3) or (8) or this subregulation; or
(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(vi) to pay a superannuation contributions surcharge;
(vii) to give effect to an entitlement of a non‑member spouse under a payment split;
(viii) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(ix) the pension was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(h) if the pension reverts, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion; and
(i) if the pension is commuted, the commuted amount cannot exceed the benefit that was payable immediately before the commutation; and
(j) the pension cannot be transferred to a person except:
(i) on the death of the primary beneficiary, to a reversionary beneficiary or, if there is no reversionary beneficiary, to the estate of the primary beneficiary; or
(ii) on the death of a reversionary beneficiary, to another reversionary beneficiary or, if there is no other reversionary beneficiary, to the estate of the reversionary beneficiary; and
(k) the capital value of the pension, and the income from it, cannot be used as security for a borrowing.
(8) Rules that provide a benefit (the market linked pension) meet the standards of this subregulation if the rules ensure that:
(a) the market linked pension:
(i) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day of the pension, rounded up to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or
(ii) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy mentioned in subparagraph (i) calculated, at the option of the primary beneficiary, as if the primary beneficiary were up to 5 years younger on the commencement day; or
(iia) if the pension has a commencement day on or after 1 January 2006 — the pension is paid at least annually to the primary beneficiary or reversionary beneficiary throughout a period that is not less than the period available under subparagraph 1.06 (8) (a) (i), and not more than the greater of the following periods:
(A) the maximum period available under subparagraph 1.06 (8) (a) (ii);
(B) the period of years equal to the number that is the difference between the age attained by the primary beneficiary at his or her most recent birthday before the commencement day, and 100; or
(iii) if:
(A) the pension is a pension that reverts to a surviving spouse on the death of the primary beneficiary; and
(B) the life expectancy of the primary beneficiary’s spouse is greater than the life expectancy of the primary beneficiary; and
(C) the primary beneficiary has not chosen to make an arrangement mentioned in subparagraph (i), (ii) or (iia) for the pension;
the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to:
(D) the life expectancy of the spouse on the commencement day; or
(E) the life expectancy of the spouse calculated, at the option of the primary beneficiary, as if the spouse were up to 5 years younger on the commencement day; or
(F) if the pension has a commencement day on or after 1 January 2006 — a period that is not less than the period available under sub‑subparagraph 1.06 (8) (a) (iii) (D), and not more than the greater of the following periods:
(I) the maximum period available under sub‑subparagraph 1.06 (8) (a) (iii) (E);
(II) the period of years equal to the number that is the difference between the age attained by the spouse at his or her most recent birthday before the commencement day, and 100;
at the option of the primary beneficiary, and rounded up to the next whole number if the life expectancy of the spouse, or the period, does not consist of a whole number of years; and
(b) the total amount of the payments to be made in a year (excluding payments by way of commutation but including payments made under a payment split) is determined in accordance with Schedule 6; and
(c) the market linked pension does not have a residual capital value; and
(d) the market linked pension cannot be commuted except in any of the following circumstances:
(i) the pension is not funded from the commutation of:
(A) an annuity that is provided under a contract that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or
(B) another pension that is provided under rules that meet the standards of subregulation (2), (3) or (7) or this subregulation; or
(C) another pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the pension;
(ii) subject to subparagraph (iii), on the death of the primary beneficiary or reversionary beneficiary, by payment of:
(A) a lump sum or a new pension to one or more dependants of either the primary beneficiary or reversionary beneficiary; or
(B) a lump sum to the legal personal representative of either the primary beneficiary or reversionary beneficiary; or
(C) if, after making reasonable enquiries, the provider of the pension is unable to find a person mentioned in sub‑subparagraph (A) or (B) — a lump sum to another individual;
(iii) for subparagraph (ii), if the primary beneficiary has opted, under subparagraph (a) (iii), for a period worked out in relation to the life expectancy or age of the primary beneficiary’s spouse — the market linked pension cannot be commuted until the death of both the primary beneficiary and the spouse;
(iv) the superannuation lump sum resulting from the commutation is transferred directly to the purchase of another benefit that is:
(A) an annuity provided under a contract that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or
(B) a pension that is provided under rules that meet the standards of this subregulation, or subregulation 1.06 (2), (3) or (7); or
(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations;
(v) to pay a superannuation contributions surcharge;
(vi) to give effect to an entitlement of a non‑member spouse under a payment split;
(vii) for the purpose of paying an amount to give effect to a release authority under:
(A) section 292‑415 of the Income Tax Assessment Act 1997; or
(B) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997;
in respect of the primary beneficiary;
(viii) the pension was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(e) if the market linked pension reverts — it does not have a reversionary component greater than 100% of the account balance immediately before the reversion; and
(f) if the market linked pension is commuted — the commutation amount cannot exceed the account balance immediately before the commutation; and
(g) the market linked pension can be transferred only:
(i) on the death of the primary beneficiary:
(A) to 1 of the dependants of the primary beneficiary; or
(B) to the legal personal representative of the primary beneficiary; or
(ii) on the death of the reversionary beneficiary:
(A) to 1 of the dependants of the reversionary beneficiary; or
(B) to the legal personal representative of the reversionary beneficiary; and
(h) the capital value of the market linked pension, and the income from it, cannot be used as security for a borrowing.
(9) Rules mentioned in subregulation (8) are not prevented from meeting the standards of that subregulation by reason only that the rules provide that, if the commencement day of the pension is on or after 1 June in a financial year, no payment is required to be made for that financial year.
(9A) Rules for the provision of a benefit (the pension) meet the standards of this subregulation if the rules ensure that payment of the pension is made at least annually, and also ensure that:
(a) for a pension in relation to which there is an account balance attributable to the beneficiary — the total of payments in any year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 1 of Schedule 7; and
(b) for a pension that is not described in paragraph (a):
(i) both of the following apply:
(A) the rules do not provide for a residual capital value, commutation value or withdrawal benefit greater than 100% of the purchase price of the pension;
(B) the total of payments in any year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 2 of Schedule 7; or
(ii) each of the following applies:
(A) the pension is payable throughout the life of the beneficiary (primary or reversionary), or for a fixed term of years that is no greater than the difference between the primary beneficiary’s age on the commencement day and age 100;
(B) there is no arrangement for an amount (or a percentage of the purchase price) prescribed by the rules to be returned to the recipient when the pension ends;
(C) the total of payments from the pension in the first year (including under a payment split but excluding amounts rolled over) is at least the amount calculated under clause 2 of Schedule 7;
(D) the total of payments from the pension in a subsequent year cannot vary from the total of payments in the previous year unless the variation is as a result of an indexation arrangement or the transfer of the pension to another person;
(E) if the pension is commuted, the commutation amount cannot exceed the benefit that
was payable immediately before the commutation; or
(iii) the standards of subregulation (2) are met; or
(iv) for rules in existence at the date of registration
of the Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 3), the standards of subregulation (2) would be met, except for the circumstances in which those rules allow for either or both of the following:
(A) the pension to be commuted;
(B) the variation or cessation of pension payments in respect of a child of the deceased; and
(c) the pension is transferable to another person only on the death of the beneficiary (primary or reversionary, as the case may be); and
(d) the capital value of the pension and the income from it cannot be used as a security for a borrowing.
(9B) Rules for the provision of a benefit do not meet the standards of any of subregulations (2) to (9A) if, in relation to the death of the beneficiary on or after 1 July 2007, the pension is transferred or paid to a person who would not be eligible to be paid a benefit in the form of a pension under subregulation 6.21 (2A) or (2B).
(9C) If a pension is paid from a successor fund in accordance with rules to which subparagraph (9A) (b) (iv) applied in the original fund, the pension meets the standards of subregulation (9A).
(10) Despite regulation 9 of the Income Tax Regulations 1936, for a pension that has a commencement day on or after 20 September 2004 and on or before 31 December 2004, one of the following life tables are to be used in ascertaining the life expectancy of a person under this regulation:
(a) the most recently published Australian Life Tables;
(b) the 1995‑97 Australian Life Tables.
(11) In this regulation:
indexation arrangement, in relation to a pension, means an arrangement specified in the rules for the provision of the pension that:
(a) results in the total amount of pension payments in each year:
(i) increasing by the same percentage factor; or
(ii) being adjusted in line with movements in the Consumer Price Index; or
(iii) being adjusted in line with movements in an index of average weekly earnings published by the Australian Statistician; or
(iv) being adjusted in accordance with subparagraph (ii) or (iii) but with an increase capped at a maximum level; and
(b) ensures that, unless APRA otherwise approves, an adjustment is made at least annually to the amount of the pension payments.
1.07 Periods when beneficiary may not receive benefits
A benefit is not taken not to meet the standards in regulation 1.05 or 1.06 by reason only that payments of benefit to the beneficiary have been properly suspended during a period when the beneficiary is the holder of a paid public office.
1.07A Commutation of allocated annuities and pensions
(1) This regulation applies in relation to the following:
(a) a contract mentioned in paragraph 1.05 (1A) (e) for a benefit (in this regulation called the annuity);
(b) a contract mentioned in paragraph 1.05 (1A) (g) for a benefit that is an annuity under sub‑subparagraph 1.05 (1A) (g) (i) (A) (in this regulation called the annuity);
(c) rules of a superannuation fund mentioned in paragraph 1.06 (1A) (c) for a benefit (in this regulation called the pension).
(2) The contract or rules, meet the standards of this regulation if the contract or rules ensure that the annuity or pension cannot be commuted, in whole or in part, unless:
(a) the commutation results from the death of an annuitant or pensioner or a reversionary annuitant or reversionary pensioner; or
(b) the sole purpose of the commutation is:
(i) to pay a superannuation contributions surcharge; or
(ii) to give effect to an entitlement of a non‑member spouse under a payment split; or
(iii) to meet the rights of a client to return a financial product under Division 5 of Part 7.9 of the Corporations Act 2001; or
(ba) for a commutation in part — the account balance of the annuity or pension, immediately after the commutation in part, would be equal to or would exceed the minimum limit under Schedule 1A or Schedule 1AAB, whichever is applicable to the annuity or pension under subregulation 1.05 (4) or 1.06 (4) as the case may be, as reduced by the amount of payments (excluding amounts rolled over) to the annuitant or pensioner already made in the financial year in which the commutation in part would occur; or
(c) the annuity or pension has paid, in the financial year in which the commutation is to take place, at least the minimum amount under subregulation (3).
(3) For paragraph (2) (c), the minimum amount is calculated using the formula:
where:
Days in payment period means the number of days in the period that:
(a) begins on:
(i) if the annuity or pension commenced in the financial year in which the commutation is to take place — the commencement day; or
(ii) otherwise — 1 July in that financial year; and
(b) ends on the day on which the commutation is to take place.
Days in financial year means the number of days in the financial year in which the commutation is to take place (365 or 366).
Minimum annual amount for the financial year means:
(a) for an annuity mentioned in paragraph (1) (b) — the minimum limit worked out in accordance with clause 2 of Schedule 1A or 1AAB as the case may be, as if the annuity account balance was the amount of the annuity account that is allocated by the annuity provider to make payments whose size is not fixed, in accordance with subparagraph 1.05 (8) (c) (ii); and
(b) otherwise — the minimum limit worked out in accordance with clause 2 of Schedule 1A or 1AAB as the case may be;
rounded to the nearest 10 whole dollars.
1.07B Commutation of other annuities and pensions
(1) This regulation applies in relation to the following:
(a) a contract mentioned in paragraph 1.05 (1) (e), (1A) (f) or (1B) (c) for a benefit (the annuity);
(b) a contract mentioned in paragraph 1.05 (1A) (g) for a benefit that is an annuity under sub‑subparagraph 1.05 (1A) (g) (i) (B) (the annuity);
(c) rules of a superannuation fund mentioned in paragraph 1.06 (1) (c), (1A) (d) or (1B) (c) for a benefit (the pension).
(2) For this regulation, other than for subregulation (5), the payment year for an annuity or pension means the period of 12 months that begins on the day after:
(a) the commencement day; or
(b) the anniversary of the commencement day.
(3) The contract or rules, meet the standards of this regulation if the contract or rules ensure that the annuity or pension cannot be commuted, in whole or in part, unless:
(a) the commutation results from the death of an annuitant or pensioner or a reversionary annuitant or reversionary pensioner; or
(b) the sole purpose of the commutation is:
(i) to pay a superannuation contributions surcharge; or
(ii) to give effect to an entitlement of a non‑member spouse under a payment split; or
(iii) to meet the rights of a client to return a financial product under Division 5 of Part 7.9 of the Corporations Act 2001; or
(c) the annuity or pension has paid, in the payment year in which the commutation is to take place, at least the minimum amount under subregulation (4).
(4) For paragraph (3) (c), the minimum amount is calculated using the formula:
where:
Days in payment period means:
(a) the number of days in the period that:
(i) begins on:
(A) the day after the anniversary of the commencement day that occurs before the day on which the commutation is to take place; or
(B) if the annuity or pension commenced on the day before the start of the payment year in which the commutation is to take place — the day after the commencement day; and
(ii) ends on the day on which the commutation is to take place; or
(b) if subregulation (5) applies — 1 day.
Days in payment year means the number of days in the payment year in which the commutation is to take place (365 or 366).
Minimum annual amount means:
(a) for an annuity mentioned in paragraph (1) (b) — the minimum amount that the annuity would pay as fixed‑size payments in the payment year if the annuity were not commuted; and
(b) otherwise — the minimum amount that the annuity or pension would pay in the payment year if the annuity or pension were not commuted.
(5) If the commencement day for an annuity or a pension is the day on which the commutation of the annuity or pension is to take place:
(a) the payment year is taken to commence on the commencement day and end on the day before the anniversary of the commencement day; and
(b) there is taken to be 1 day in the payment period.
(6) If, to calculate the minimum annual amount, it is necessary to use a future unknown value of the CPI, that value is taken to be equal to the CPI for the last known quarter.
1.07C Commutation of market linked income stream
(1) This regulation applies in relation to the following:
(a) a contract mentioned in paragraph 1.05 (1A) (h) or (1B) (d) for a market linked annuity;
(b) rules of a superannuation fund mentioned in paragraph 1.06 (1A) (e) or (1B) (d) for a market linked pension.
(2) The contract or rules meet the standards of this regulation if the contract or rules ensure that the annuity or pension cannot be commuted, in whole or in part, unless:
(a) the commutation results from the death of an annuitant or pensioner or a reversionary annuitant or reversionary pensioner; or
(b) the sole purpose of the commutation is:
(i) to pay a superannuation contributions surcharge; or
(ii) to give effect to an entitlement of a non‑member spouse under a payment split; or
(iii) to meet the rights of a client to return a financial product under Division 5 of Part 7.9 of the Corporations Act 2001; or
(ba) for a commutation in part — the account balance of the annuity or pension, immediately after the commutation in part, would be equal to or would exceed the total payment amount calculated in accordance with Schedule 6, as reduced by the amount of payments (excluding amounts rolled over) to the annuitant or pensioner already made in the financial year in which the commutation in part would occur; or
(c) the annuity or pension has paid, in the financial year in which the commutation is to take place, at least the minimum amount under subregulation (3).
(3) For paragraph (2) (c), the minimum amount is calculated using the formula:
where:
annual amount for the financial year means the amount worked out in accordance with Schedule 6 for the annuity or pension, rounded to the nearest 10 whole dollars.
days in payment period means the number of days in the period that:
(a) starts on:
(i) if the annuity or pension commenced in the financial year in which the commutation is to take place — the commencement day; or
(ii) in any other case — 1 July in that financial year; and
(b) ends at the end of the day on which the commutation is to take place.
days in financial year means the number of days in the financial year in which the commutation is to take place.
1.07D Commutation of superannuation income stream
(1) For paragraphs 1.05 (1) (d) and 1.06 (1) (b), a benefit meets the standards of this regulation if, under the applicable contract or rules, the annuity or pension cannot be commuted, in whole or in part, except in the following circumstances:
(a) the commutation results from the death of the annuitant or pensioner or a reversionary annuitant or reversionary pensioner; or
(b) the sole purpose of the commutation is:
(i) to pay a superannuation contributions surcharge; or
(ii) to give effect to an entitlement of a non‑member spouse under a payment split; or
(iii) to meet the rights of a client to return a financial product under Division 5 of Part 7.9 of the Corporations Act 2001; or
(c) for a commutation in part — the account balance of the annuity or pension, immediately after the commutation, is equal to or greater than the minimum payment amount calculated in accordance with Schedule 7, as reduced by the amount of payments (excluding amounts rolled over) to the annuitant or pensioner already made in the financial year in which the commutation occurs; or
(d) the annuity or pension has paid, in the financial year in which the commutation takes place, at least the minimum amount prescribed by subregulation (2).
(2) For paragraph (1) (d), the minimum amount is the amount calculated using the formula:
where:
days in financial year means the number of days in the financial year (365 or 366) in which the commutation takes place.
days in payment period means the number of days in the period that:
(a) begins on:
(i) if the annuity or pension commenced in the financial year in which the commutation is to take place — the commencement day; or
(ii) otherwise — 1 July in that financial year; and
(b) ends on the day on which the commutation is to take place.
minimum annual amount means the minimum amount payable under the annuity or pension, in the financial year, calculated in accordance with Schedule 7.
Division 1A.2 Operating standards
1.08 Restriction on factors for converting pensions
(1) For the purposes of subsection 31 (1) of the Act, it is a standard applicable to the operation of a regulated superannuation fund that the fund must not use a factor, for converting a prescribed pension to a lump sum, that is greater than the pension valuation factor that would apply under Schedule 1B if the commencement day of the pension were the day on which it was commuted.
(2) Subregulation (1) does not apply to the use of a factor that:
(a) the Regulator has approved in writing; or
(b) is for conversion in relation to a commutation to pay a superannuation contributions surcharge; or
(c) is for conversion in relation to a commutation to give effect to an entitlement of a non‑member spouse under a payment split.
(3) In this regulation, prescribed pension:
(a) means a pension (including a benefit that is taken, under these regulations, to be a pension for the purposes of the Act), other than a benefit that is taken, under subregulation 1.06 (1), to be a pension by reason only that it is provided under rules of a superannuation fund that meet the standards of subregulation 1.06 (2); but
(b) does not include any of the following:
(i) an account‑based pension;
(ii) an allocated pension;
(iii) a market linked pension.
Part 2 Information for certain parties
Division 2.1 Introductory
2.01 Interpretation
(1) In this Part:
amount includes a nil amount.
contact person, in relation to a superannuation entity, means a named individual, or a person holding a designated office or position, who is available to receive and deal with inquiries or complaints by members or unit‑holders (as the case may be).
(2) In this Part, where the context allows, a reference to a member is taken to mean:
(a) in relation to a superannuation entity — a person who:
(i) is a member of the entity; or
(ii) receives a pension from the entity; or
(iii) has deferred his or her entitlement to receive a benefit from the entity; and
(b) in relation to an approved deposit fund — a depositor in the fund; and
(c) in relation to a PST — a unit‑holder.
(3) In a Division of this Part, a reference to a fund is a reference to a fund of the kind to which the Division applies.
2.02 Scope and application of this Part
(1) The following Divisions of this Part deal with the duty of trustees to give information to members or other persons on specified occasions. Each of the Divisions has an application provision:
(a) stating the types of entity to which the Division applies; and
(b) referring to any particular provisions of the Division, or a Subdivision of the Division, that limit or restrict the application of the Division or Subdivision.
(2) The requirements to give information are expressed in 2 forms: general requirements (which set out broad principles), and specific requirements (which set out particular provisions, and may apply in all cases or only in particular circumstances). The specific requirements are not to be taken as limiting, by implication, the scope of the general requirements.
(3) This Division governs the other Divisions of this Part.
2.03 Duties and requirements arising under this Part
(1) A requirement to give information under a Division of this Part must be met within the time specified in the Division as the time for compliance.
Requirements concerning information
(2) Information given in accordance with this Part must:
(a) be in writing; and
(b) be worded and presented in a clear and effective manner.
(3) Information given in accordance with this Part may be given, where appropriate, in diagrammatical form.
Where information may mislead (if incomplete, outdated, etc)
(4) If the trustee of a superannuation entity has reason to think that information that the trustee is required to give will, or may, be materially misleading, the trustee must give with the information a statement containing further information to rectify any misleading, or potentially misleading, effect.
Example
If a change in a fund’s investment policy means that information about past earnings rates is not a reliable guide to future earnings, an appropriate explanation (including the change of policy and its likely effect on future earnings rates) must be given.
2.04 Reasonable efforts are sufficient
(1) For Division 2.4 or 2.5, the trustee of a superannuation entity is taken to have satisfied a duty or requirement to give information to a person if the trustee has taken reasonable steps to give the information to the person but has been unable to do so.
Information that is unknown and not reasonably obtainable
(2) Where information is unknown to the trustee, the trustee need not give the information under this Part if the trustee cannot obtain the information by making reasonable inquiries.
2.05 Charges for information requested
(1) Subject to this regulation, the obligation of the trustee of a superannuation entity under these Regulations to give information on request by a person arises only if the person pays the amount specified by the trustee as the charge for giving the information.
(2) The amount of the charge must not exceed the reasonable cost to the superannuation entity of giving the information (including all reasonably related costs — for example, costs of searching for, obtaining and collating the information).
(3) A policy committee is not liable to any charge for information given to it.
Division 2.4 Information to be given for each reporting period
Subdivision 2.4.1 Preliminary
2.17 Interpretation
In this Division:
fund information means information required to be given under Subdivision 5.6 of Part 7.9 of the Corporations Regulations 2001.
fund reporting period means a reporting period that applies under Subdivision 5.5 of Part 7.9 of the Corporations Regulations 2001.
member information means information required to be given under section 1017D of the Corporations Act 2001.
member reporting period means a reporting period that applies under section 1017D of the Corporations Act 2001.
2.18 Application
(1) This Division applies to:
(a) a regulated superannuation fund; and
(b) an approved deposit fund.
(2) This Division does not apply to a self managed superannuation fund.
(3) For the purposes of subsections 31 (1) and 32 (1) of the Act, a requirement of this Division is a standard applicable to the operation of a fund to which this Division applies.
Subdivision 2.4.3 Derivatives charge ratio
2.29 Specific requirements in particular cases
(1) For this Subdivision, the derivatives charge ratio of a fund is:
expressed as a percentage, where:
X is the market value of the assets of the fund (other than cash) that are subject to a charge in relation to a derivatives contract (as defined in subregulation 13.15A (2)).
Y is the market value of all the assets of the fund.
(2) If paragraph 7.9.37 (1) (i) of the Corporations Regulations 2001 applies, the trustee must give the information mentioned in that paragraph to APRA as soon as practicable, and in any event within 6 months, after the end of the reporting period to which the information relates.
Division 2.5 Information on request
2.30 Application
(1) This Division applies to a superannuation entity.
(2) For subsections 31 (1), 32 (1) and 33 (1) of the Act, a requirement of this Division is a standard applicable to the operation of a superannuation entity.
2.31 Documents may be made available for inspection
It is sufficient compliance with a requirement under this Division to give information, or to give a copy of a document, to a person if:
(a) a document containing the information; or
(b) a copy of the document;
as the case requires, is made available for inspection by the person:
(c) at a suitable place (having adequate facilities for the person to inspect and photocopy the document); and
(d) during normal business hours;
or as otherwise agreed between the trustee of a superannuation entity who is required to give the information to the person, and the person.
2.32 Time for compliance
The trustee of a superannuation entity must comply with a request to give information, or a copy of a document, as soon as practicable, and in any event the trustee must make reasonable efforts to comply with the request within 1 month after receiving the request.
2.33 Specific requirements
(1) In this regulation:
concerned person has the same meaning as in section 1017C of the Corporations Act 2001.
(2) The trustee of a superannuation entity (other than a self managed superannuation fund) must give to a person (other than a concerned person), on request in writing by the person, a copy of any of the following documents (to the extent the trustee has access to the documents) specified in the request:
(a) audited accounts of the superannuation entity, together with (whether or not specifically requested) the auditor’s report in relation to the accounts;
(b) for a regulated superannuation fund or approved deposit fund — a copy of the fund information that was most recently given to the members;
(c) for a PST — a copy of the information mentioned in Subdivision 5.7 of Part 7.9 of the Corporations Regulations 2001 that was most recently given to the members.
Division 2.5A Information about superannuation interest subject to payment split
2.36B Application
(1) This Division applies to:
(a) a regulated superannuation fund; and
(b) an approved deposit fund.
(2) For subsections 31 (1) and 32 (1) of the Act, a requirement of this Division is a standard applicable to the operation of the fund.
2.36C Information to be provided by trustee when interest becomes subject to payment split
(1) If an interest in a fund becomes subject to a payment split, the trustee of the fund must give to the non‑member spouse in relation to the interest a written notice stating the following information:
(a) the contact details for the fund;
(b) if the interest is not a percentage‑only interest and the payment split is a base amount split:
(i) the base amount allocated to the non‑member spouse under the relevant superannuation agreement, flag lifting agreement or splitting order; and
(ii) the method by which the base amount will be adjusted on an ongoing basis; and
(iii) whether the governing rules of the fund would allow the non‑member spouse to become a member of the fund, and information about the options available to the non‑member spouse in relation to the interest under Part 7A;
(c) if the interest is not a percentage‑only interest and the payment split is a percentage payment split:
(i) the percentage that is to apply to all splittable payments in respect of the interest; and
(ii) whether the governing rules of the fund would allow the non‑member spouse to become a member of the fund, and information about the options available to the non‑member spouse in relation to the interest under Part 7A;
(d) if the interest is a percentage‑only interest:
(i) the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order; and
(ii) if the payment split is under a superannuation agreement or flag lifting agreement, whether the percentage is to apply for the purposes of subparagraph 90MJ (1) (b) (i) of the Family Law Act 1975; and
(iii) if the payment split is under a splitting order, whether the order is made under paragraph 90MT (1) (c) of the Family Law Act 1975;
(e) the circumstances in which the entitlement of the non‑member spouse will become payable;
(g) if the governing rules of the fund would allow the
non‑member spouse to become a member of the fund, information that the non‑member spouse would reasonably need to understand the management and financial condition of the fund and of any relevant sub‑plan (for example, the fund’s product disclosure statement);
(h) details of the existence and (in outline terms) the functions of the Superannuation Complaints Tribunal;
(i) details (in summary form) of arrangements the fund has to deal with inquiries or complaints;
(j) details of any fee payable by the non‑member spouse in respect of the payment split, and arrangements for the payment of any such fee.
(2) The information must be given when the trustee gives the payment split notice to the non‑member spouse.
Note See regulation 7A.03 for the payment split notice requirements.
2.36D Other information to be provided by trustee
(1) This regulation applies to an interest in a fund to which a transition period (within the meaning of section 1410 of the Corporations Act 2001) applies, if:
(a) the interest is subject to a base amount payment split; and
(b) the interest is not a percentage‑only interest; and
(c) the interest is in the growth phase; and
(d) none of the following has occurred as a result of a payment split:
(i) a new interest was created for the non‑member spouse;
(ii) the transferable benefits of the non‑member spouse were transferred or rolled out of the fund;
(iii) the amount to which the non‑member spouse is entitled under the payment split was paid, as a lump sum, to the non‑member spouse.
(2) The trustee of the fund must give to the member spouse and the non‑member spouse the following information for each reporting period:
(a) the value of the adjusted base amount applicable to the non‑member spouse at the end of the reporting period;
(b) the amount of the adjustment in the reporting period;
(c) the method used to calculate the adjustment, including the rate of return over the reporting period.
(3) The information required under subregulation (2):
(a) must be given as soon as practicable after the end of the relevant reporting period; and
(b) in the case of information that is to be given to the member spouse, must be given with the information required to be given to the member spouse under Subdivision 2.4.2 of the old Regulations.
(4) In this regulation:
reporting period means a reporting period that applies under Subdivision 2.4.2 of the old Regulations.
Note A non‑member may also be entitled to information under section 1017C of the Corporations Act 2001 and Division 2.5.
2.36E Other information to be given by trustee — adverse effects on benefits
(1) This regulation applies if:
(a) an interest in a fund is subject to a base amount payment split or a percentage payment split; and
(b) the interest is not a percentage‑only interest; and
(c) the interest is in the growth phase; and
(d) none of the following has occurred in respect of a payment split:
(i) a new interest was created for the non‑member spouse;
(ii) the transferable benefits of the non‑member spouse were transferred or rolled out of the fund;
(iii) the amount to which the non‑member spouse is entitled under the payment split was paid, as a lump sum, to the non‑member spouse.
(2) The trustee of the fund must give to the non‑member spouse information about an event if the trustee reasonably believes that:
(a) the event is likely to have a material effect on the interest in the fund; and
(b) the effect may be adverse (whether the adverse effect would occur at the time of the event or a later time).
(2A) If:
(a) the member spouse lodges a notice, or makes a request of a trustee, which would bind the trustee to pay death benefits to a particular beneficiary or beneficiaries; and
(b) a payment made in accordance with the notice or request would not be a splittable payment because of the identity or characteristics of that beneficiary or those beneficiaries;
the trustee must inform the non‑member spouse that the member spouse has lodged the notice or made the request.
(3) The information required under subregulation (2) or (2A) must be given before, or as soon as practicable after, the occurrence of the event.
Part 3 Matters prescribed or specified in relation to public offer entities
3.01 Public offer superannuation fund — member of a prescribed class
For the purposes of sub‑subparagraph 18 (1) (a) (ii) (B) of the Act, a prescribed class is a class of persons, each of whom is:
(a) a former standard employer‑sponsored member of the fund concerned who, since ceasing to be a standard employer‑sponsored member of the fund, has remained a member of the fund at all times; or
(b) a spouse, or former spouse, of a standard employer‑sponsored member of the fund concerned in relation to whom the fund has accepted eligible spouse contributions from the standard employer‑sponsored member; or
(c) both:
(i) a spouse, or former spouse, of a person who is a former standard employer‑sponsored member (the other person) of the fund concerned; and
(ii) a person in relation to whom the fund concerned accepted eligible spouse contributions from the other person while the other person was a member of the fund; or
(d) both:
(i) a spouse, or former spouse, of a standard employer‑sponsored member (the other person) of a fund that has the same standard employer‑sponsor as the fund concerned; and
(ii) a person in relation to whom the fund concerned has accepted eligible spouse contributions from the other person; or
(e) both:
(i) a spouse, or former spouse, of a person who is a former standard employer‑sponsored member (the other person) of a fund (the other fund) that, at all times relevant to subparagraph (ii), had the same standard employer‑sponsor as the fund concerned; and
(ii) a person in relation to whom the fund concerned accepted eligible spouse contributions from the other person while the other person was a member of the other fund; or
(f) a non‑member spouse for whom an interest has been created in the fund, if the original interest of the member spouse was an interest in that fund; or
(g) a person in relation to whom the fund concerned has accepted child contributions:
(i) made by a standard employer‑sponsored member; or
(ii) made by a person who is a former standard‑employer sponsored member while the person was a member; or
(h) a person in relation to whom the fund concerned has accepted child contributions:
(i) made by a standard employer‑sponsored member of a fund that has the same standard employer‑sponsor as the fund concerned; or
(ii) made by a person who is a former standard‑employer sponsored member of a fund that has the same standard employer‑sponsor as the fund concerned:
(A) while the person was a member of the fund; and
(B) while the fund had the same standard employer‑sponsor as the fund concerned; or
(i) a spouse or former spouse of a current or former standard employer‑sponsored member for whom an interest has been created in the fund under Division 6.7.
3.04 Section 54 of the Act — prescribed percentages
For the purposes of section 54 of the Act (prerequisites to variation of repayment period), the following percentages are prescribed:
(a) in the case of paragraph (1) (c) of the section — 25%; and
(b) in the case of paragraph (1) (d) of the section — at least 75%.
3.04A Removal of trustee of public offer entity — s 60A (2) of the Act
For the purposes of subsection 60A (2) of the Act, the following kinds of removal are specified:
(a) a removal that will have the immediate effect that the fund complies with the basic equal representation rules set out in section 89 of the Act;
(b) a removal that satisfies all of the following conditions:
(i) the questions of whether the trustee should be removed, and who should replace the trustee if the removal is agreed to, have been voted on at a meeting of beneficiaries;
(ii) the beneficiaries who vote (in person or by proxy) on each question mentioned in subparagraph (i) at the meeting referred to in that subparagraph hold interests that are in total at least 25% of the total value of all beneficiaries’ interests in the fund;
(iii) at least 75% by number of the beneficiaries who vote (in person or by proxy) at the meeting on whether to remove the trustee vote in favour of removing the trustee;
(iv) at least 75% by number of the beneficiaries who vote (in person or by proxy) at the meeting on who the new trustee should be vote in favour of a particular person as trustee;
(v) that person will become the trustee immediately after the removal takes effect.
3.05 Policy committees — sections 91, 92 and 93 of the Act
Pre‑1 July 1995 — funds with 200 or more members (paragraph 91 (3) (b) of the Act)
(1) For the purposes of paragraph 91 (3) (b) of the Act, subject to subregulation (4), a public offer superannuation fund to which section 91 of the Act applies is subject to the following rule, namely, that the trustee of the fund must take all reasonable steps to ensure that, if there are at least 200 of its members (a group), each of whom:
(a) is a standard employer‑sponsored member; and
(b) has a standard employer‑sponsor who is the, or is an associate of a, standard employer‑sponsor of each other member of that group;
there is at least 1 policy committee established for that group.
Post‑30 June 1995 — funds with more than 4, but fewer than 50, members (paragraph 92 (3) (b) of the Act)
(2) For the purposes of paragraph 92 (3) (b) of the Act, subject to subregulation (4), a public offer superannuation fund to which section 92 of the Act applies is subject to the following rule, namely, that the trustee of the fund must take all reasonable steps to ensure that if:
(a) there are at least 5 of its members (a group) each of whom:
(i) is a standard employer‑sponsored member; and
(ii) has a standard employer‑sponsor who is the, or is an associate of a, standard employer‑sponsor of each other member of that group; and
(b) a written request is made to the trustee on behalf of at least 5 members of the group to establish a policy committee;
there is at least 1 policy committee established for that group.
Post‑30 June 1995 — funds with more than 49 members (paragraph 93 (3) (b) of the Act)
(3) For the purposes of paragraph 93 (3) (b) of the Act, subject to subregulation (4), a public offer superannuation fund to which section 93 of the Act applies is subject to the following rules, namely:
(a) the trustee of the fund must take all reasonable steps to ensure that, if there are more than 49 of its members (a group), each of whom:
(i) is a standard employer‑sponsored member; and
(ii) has a standard employer‑sponsor who is the, or is an associate of a, standard employer‑sponsor of each other member of that group;
there is at least 1 policy committee established for that group; and
(b) the trustee of the fund must take all reasonable steps to ensure that, if:
(i) there are at least 5 but fewer than 50 of its members (a group), each of whom:
(A) is a standard employer‑sponsored member; and
(B) has a standard employer‑sponsor who is the, or is an associate of a, standard employer‑sponsor of each other member of that group; and
(ii) a written request is made to the trustee on behalf of at least 5 members of that group to establish a policy committee;
there is at least 1 policy committee established for that group.
Rules do not apply to certain funds
(4) If a public offer superannuation fund complies with the basic equal representation rules stated in section 89 of the Act, the fund is not subject to the rules set out in subregulations (1), (2) and (3).
Equal representation of employers and members on policy committees — effect of vacancy
(5) If a vacancy occurs in the membership of a policy committee of a public offer superannuation fund the policy committee is taken to consist of equal numbers of employer representatives and member representatives during the period of the vacancy, in accordance with paragraph 91 (3) (c), 92 (3) (c) or 93 (3) (c) of the Act (whichever is applicable) if:
(a) immediately before the vacancy occurred, the policy committee consisted of equal numbers of employer representatives and member representatives; and
(b) the vacancy is filled within 90 days after it occurred; and
(c) immediately after the vacancy is filled, the policy committee consists of equal numbers of employer representatives and member representatives.
3.06 Policy committees — functions (paragraphs 91 (3) (b), 92 (3) (b) and 93 (3) (b) of the Act)
(1) For the purposes of paragraphs 91 (3) (b), 92 (3) (b) and 93 (3) (b) of the Act, a public offer superannuation fund to which section 91, 92 or 93 of the Act applies is subject to the following rule, namely, that the functions that a policy committee of a fund may undertake include the following:
(a) providing an avenue:
(i) for members of the fund to inquire about the investment strategy and performance of the fund; and
(ii) for the trustee of the fund to obtain the views of members of the fund concerning that strategy and performance;
(b) providing an avenue for members of the fund to inquire about the fund’s operation or performance;
(c) providing an avenue for the trustee of the fund to obtain the views of members of the fund concerning the fund’s operation or performance;
(d) providing an avenue for the trustee of the fund to obtain the views of members of the fund on their information needs;
(e) assisting the trustee of the fund in dealing with complaints or inquiries about the operation or management of the fund.
(2) Subregulation (1) is not to be taken as limiting by implication the functions and responsibilities of the trustee.
3.07 Definition of policy committee in section 10 of the Act — matters specified for purposes of paragraph (a)
Issues relating to the fund that a member of the fund, or the employer‑sponsor of a member of the fund, has raised with the committee as a matter of concern, are specified for the purposes of paragraph (a) of the definition of policy committee in section 10 of the Act.
3.08 Policy committees — duties of trustee
(1) In relation to each policy committee of a public offer superannuation fund, the trustee of the fund must:
(a) ensure, so far as practicable, that the committee meets at least once in any 12‑month period; and
(b) provide facilities that are reasonably necessary to enable the committee to meet and to function effectively.
(2) A meeting may be held wholly or in part by means of a telephone conference connection among the committee members and, if a representative of the trustee is to attend, the representative.
(3) The trustee must arrange for a representative of the trustee to attend each meeting of the committee that the committee requests the trustee to do so.
(4) The trustee may recoup from the fund:
(a) the costs of providing facilities for the committee to meet; and
(b) the costs incurred by the trustee in attending a meeting of the committee; and
(c) the costs incurred by the trustee in providing information to the committee.
Note The amount of costs recouped is determined in accordance with regulation 5.02
3.09 Dissolution of policy committees
(1) A policy committee of a public offer superannuation fund may dissolve itself, and if it does so the trustee of the fund is taken to have complied with the trustee’s duties under regulation 3.05.
(2) If a policy committee dissolves itself and at least 5 members of the fund, being members in respect of whom the committee functioned, request the trustee of the fund in writing to form a replacement committee, the trustee must take all reasonable steps to do so.
(3) The provisions of regulations 3.06, 3.07 and 3.08, and this regulation, apply to a replacement committee.
3.10 Commission and brokerage
(1) For the purposes of subsection 154 (1) of the Act, the requirements set out in this regulation apply in relation to a payment by the trustee of a public offer entity of commission or brokerage (including commission or brokerage in the form of remuneration or other benefits) of a kind mentioned in that subsection.
(2) The trustee of a public offer entity may make a payment of commission or brokerage to a person in consideration of the person:
(a) applying or agreeing to apply for the issue of an interest in the entity; or
(b) procuring or agreeing to procure applications for the issue of an interest in the entity;
if, and only if:
(c) the payment is not prohibited by the entity’s trust deed; and
(d) where an interest is issued, the applicant for the issue of the interest has, before the issue occurred, been notified in writing of the amount or rate of the proposed payment of commission or brokerage.
(3) The trustee of a public offer entity must not make a payment of commission or brokerage to a person (the provider) for the provision of a financial service by the provider in respect of issuing an interest in the entity unless the provider is:
(a) a financial services licensee that is authorised to deal in superannuation products; or
(b) an authorised representative of a financial services licensee that is authorised to deal in superannuation products; or
(c) exempt from the requirement to hold an Australian financial services licence; or
(d) the provider of the financial service on behalf of another person who is exempt.
(4) A reference in subregulation (3) to a solicitor or accountant includes a reference to a firm of solicitors or accountants, or to a partner in such a firm, as the case requires.
(5) The trustee of an entity must keep an account of amounts of commission and brokerage paid by the entity.
3.11 Payment by trustee of a public offer entity of commission or brokerage
(1) This regulation applies in relation to a person who, immediately before this regulation commences, was entitled to a payment of commission or brokerage in the circumstances mentioned in paragraph 3.10 (3) (a), (b), (d), (e) or (f) of the SIS Regulations.
(2) Regulation 3.10, as in force immediately before this regulation commences, continues to apply in relation to the person’s entitlement.
(3) Subregulation (2) ceases to apply in relation to the entitlement on the earlier of:
(a) the day on which the person becomes a financial services licensee in relation to the activity to which the payment relates; and
(b) the end of the transition period for the person mentioned in section 1438 of the Corporations Act 2001.
Part 3A Matters prescribed or specified in relation to licensing of trustees and of groups of individual trustees
Division 3A.1 Classes of RSE licences
3A.01 Public offer entity licences
For paragraph 29B (2) (b) of the Act, the following classes of registrable superannuation entities are specified:
(a) superannuation entities that are superannuation funds with fewer than 5 members (other than self managed superannuation funds);
(b) excluded approved deposit funds.
3A.02 Non‑public offer entity licences
(1) For subsection 29B (3) of the Act, all classes of registrable superannuation entities, other than the following classes, are specified:
(a) public offer entities;
(b) superannuation entities that are superannuation funds with fewer than 5 members (other than self managed superannuation funds);
(c) excluded approved deposit funds.
(2) The class of RSE licences provided for under subsection 29B (3) of the Act is called the class of non‑public offer entity licences.
3A.03 Extended public offer entity licences
(1) For subsection 29B (4) of the Act, extended public offer entity licences are a class of RSE licences.
(2) Subject to any condition imposed on an extended public offer entity licence under subsection 29EA (3) of the Act, the licence enables a trustee that holds a licence of that class to be a trustee of any registrable superannuation entity.
Note Under paragraphs 29D (1) (g) and 29E (3) (a) of the Act, an extended public offer entity licence may only be granted to, and held by, a trustee that is a constitutional corporation that meets the capital requirements under section 29DA of the Act.
3A.03A Acting trustee licences
(1) For subsection 29B (4) of the Act, acting trustee licences are a class of RSE licences.
(2) Subject to any condition imposed on an acting trustee licence under subsection 29EA (3) of the Act, the licence allows:
(a) a trustee that holds an acting trustee licence; or
(b) a trustee who is a member of a group of individual trustees that holds an acting trustee licence;
to be a trustee of a registrable superannuation entity or entities to which the trustee is appointed to act as trustee under section 134 of the Act by APRA.
(3) For subsection 29E (7) of the Act, for the period of the licence, a trustee must not, without APRA approval, carry on a business other than that of performing the functions and duties of a trustee of a registrable superannuation entity or entities to which the appointment relates (the trustee business).
(4) APRA may approve the trustee carrying on a business other than the trustee business if APRA is satisfied that the carrying on of the other business would not prejudice the proper and efficient performance of the trustee’s functions and duties.
Division 3A.2 Grant of RSE licences
3A.04 Capital requirements
(1) For subsection 29DA (2) and paragraphs 29DA (3) (a) and (4) (b) of the Act, the amount of $5 000 000 is prescribed.
(2) For subsection 29DA (6) of the Act:
net tangible assets means the total assets of a constitutional corporation:
(a) less total liabilities of the corporation; and
(b) less any intangible assets reported in the corporation’s books of account;
calculated on the basis of assets and liabilities as they would appear if, at the time of calculation, a balance sheet were made up for lodgement as part of a financial report under Chapter 2M of the Corporations Act 2001 (the Corporations Act) on the basis that the corporation is a reporting entity.
(3) For subregulation (2), at any time before 1 May 2007, an applicant or trustee must calculate its total assets by excluding:
(a) all receivables receivable from either:
(i) a related party as defined by AASB 1017 and Part E2.2 of Chapter 2E of the Corporations Act; or
(ii) a related party as defined by AASB 124 and Part 2E.2 of Chapter 2E of the Corporations Act; and
(b) any assets that are subject to any charge that secures the liability of a person other than the corporation, to the extent of the value of that charge; and
(c) any assets to which the corporation is not legally and beneficially entitled or that are not held in the name of the corporation; and
(d) any assets (illiquid assets) that are not capable of being converted into cash in the short term.
(4) For subregulation (2), an applicant or trustee must calculate its total liabilities at any time before 1 May 2007 by including all payables payable to:
(a) a related party as defined by AASB 1017 and Part 2E.2 of Chapter 2E of the Corporations Act; or
(b) a related party as defined by AASB 124 and Part 2E.2 of Chapter 2E of the Corporations Act.
(5) For subregulation (2), an applicant or trustee must:
(a) calculate its total assets on and after 1 May 2007 by excluding:
(i) all receivables receivable from a related party as defined by AASB 124 and Part 2E.2 of Chapter 2E of the Corporations Act; and
(ii) any assets that are subject to any charge that secures the liability of a person other than the corporation, to the extent of the value of that charge; and
(iii) any assets to which the corporation is not legally and beneficially entitled or that are not held in the name of the corporation; and
(iv) any assets (illiquid assets) that are not capable of being converted into cash in the short term; and
(b) include in its total liabilities on and after 1 May 2007 all payables payable to a related party as defined by AASB 124 and Part 2E.2 of Chapter 2E of the Corporations Act.
(6) In this regulation:
AASB 1017 means AASB 1017, Related Party Disclosures, published by the Australian Accounting Standards Board, as in force on 1 July 2004.
AASB 124 means AASB 124, Related Party Disclosures, published by the Australian Accounting Standards Board.
Division 3A.3 Applying for RSE licences
3A.05 Definitions
In this Division:
asset, for a registrable superannuation entity, means an item described as an asset in a statement of financial position prepared in respect of the entity.
asset value, for a registrable superannuation entity, means the value worked out by determining the net balance of the registrable superannuation entity based on the statement of financial position prepared in respect of the entity for the last year of income of the entity before the start of the licensing transition period.
extended public offer entity licence means an RSE licence of a class specified in regulation 3A.03.
non‑public offer entity licence means an RSE licence of a class provided for under subsection 29B (3) of the Act.
statement of financial position, for a registrable superannuation entity, means a statement of financial position prepared in respect of an entity, as a reporting document for the purpose of reporting standards referred to in section 13 of the Financial Sector (Collection of Data) Act 2001.
Note The definitions of licensing transition period and public offer entity licence are contained in subsection 10 (1) of the Act.
3A.06 Application fees
For paragraphs 29C (4) (c) and 29F (2) (c) of the Act, the following fees are prescribed:
| Item | Application | | Fees ($) | |
| | | Non‑public offer entity licence | Public offer entity licence | Extended public offer entity licence |
| 1 | Application for RSE licence, other than an application mentioned in items 2 to 7. | 5 500 | 20 000 | 20 000 |
| 2 | Application for non‑public offer entity licence by an applicant that is a body corporate if: (a) the body corporate was a trustee of a registrable superannuation entity at the start of the licensing transition period; and | 3 500 | n/a | n/a |
| | (b) APRA is satisfied that the asset value of all registrable superannuation entities for which the body corporate proposes to become the RSE licensee is less than $5 000 000; and | | | |
| | (c) item 5 does not apply. | | | |
| 3 | Application for non‑public offer entity licence by an applicant that is a group of individual trustees if: (a) any member of the group was a trustee of a registrable superannuation entity at the start of the licensing transition period; and | 3 500 | n/a | n/a |
| | (b) APRA is satisfied that the asset value of all registrable superannuation entities for which the group proposes to become the RSE licensee is less than $5 000 000; and | | | |
| | (c) item 5 does not apply. | | | |
| 4 | Application for non‑public offer entity licence if, in the 12 months before the application is made: | 2 750 | n/a | n/a |
| | (a) the applicant applied for a licence of that class, for a public offer entity licence, or for an extended public offer entity licence; and | | | |
| | (b) that application was refused or withdrawn; and | | | |
| | (c) item 5 does not apply. | | | |
| 5 | Application for non‑public offer entity licence by an applicant to whom item 2 or 3 applies if, in the 12 months before the application is made: | 1 750 | n/a | n/a |
| | (a) the applicant applied for a licence of that class, for a public offer entity licence, or for an extended public offer entity licence; and | | | |
| | (b) that application was refused or withdrawn. | | | |
| 6 | Application for public offer entity licence if, in the 12 months before the application is made: | n/a | 10 000 | n/a |
| | (a) the applicant applied for a licence of that class, or for an extended public offer entity licence; and | | | |
| | (b) that application was refused or withdrawn. | | | |
| 7 | Application for extended public offer entity licence if, in the 12 months before the application is made: | n/a | n/a | 10 000 |
| | (a) the applicant applied for a licence of that class, or for a public offer entity licence; and | | | |
| | (b) that application was refused or withdrawn. | | | |
| 8 | Application for variation under paragraph 29F (1) (a): | | | |
| | (a) if the applicant already holds a non‑public offer entity licence, and item 9 does not apply; or | n/a | 14 500 | 14 500 |
| | (b) if the applicant already holds a public offer entity licence; or | 500 | n/a | 500 |
| | (c) if the applicant already holds an extended public offer entity licence. | 500 | 500 | n/a |
| 9 | Application for variation under paragraph 29F (1) (a) if: | n/a | 16 500 | 16 500 |
| | (a) the applicant already holds a non‑public offer entity licence; and | | | |
| | (b) when the applicant applied for that licence, item 2 or 3 applied. | | | |
Division 3A.4 Conditions on RSE licences
3A.07 Conditions on RSE licences of FHSA providers
(1) For subsection 29E (7) of the Act, this regulation sets out conditions that apply to RSE licences of RSE licensees that hold authorisations as FHSA providers under Part 7 of the FHSA Act.
(2) An RSE licensee must not:
(a) appoint or engage a person to be; or
(b) allow a person to act as;
an investment manager or custodian of a superannuation entity if the person is a disqualified person under Part 15 of the Act as applied by Division 2 of Part 7 of the FHSA Act.
(3) An RSE licensee that becomes aware that it has breached the condition specified in subregulation (2) must, as soon as practicable after so becoming aware, remove the person from the position of investment manager or custodian of the trust.
Part 4 Management and trusteeship of superannuation entities
Division 4.1 Prescribed matters
4.01 Covenants in governing rules of a superannuation entity — prescribed information and documents
For the purposes of paragraph 52 (2) (h) of the Act, the information and documents that are available to a concerned person under section 1017C of the Corporations Act 2001 are prescribed.
4.02 Covenants in governing rules of a superannuation entity — beneficiary investment choice
(1) For the purposes of paragraph 52 (4) (b) of the Act, the circumstances in which a direction of the kind referred to in that paragraph (other than a subsequent direction of that kind) may be given are:
(a) in the case of a direction by a specified beneficiary who is, or a class of specified beneficiaries each of whom is, a standard employer‑sponsored member — the circumstances stated in subregulations (2) and (3); and
(b) in any other case — the circumstances stated in subregulation (2).
(2) For the purposes of paragraphs (1) (a) and (b), the following circumstances are stated, namely that:
(a) the trustee gives to the beneficiary, or to each member of the class of beneficiaries, a choice of 2 or more investment strategies from which the beneficiary, or class of beneficiaries, may choose a strategy or combination of strategies; and
(b) the beneficiary, or each member of the class of beneficiaries, is given:
(i) the investment objectives of each of the strategies mentioned in paragraph (a); and
(ii) all information the trustee reasonably believes a person would reasonably need for the purpose of understanding the effect of, and any risk involved in, each of those strategies; and
(c) the beneficiary, or each member of the class of beneficiaries, is fully informed of the range of directions that can be given and the circumstances in which they can be changed; and
(d) the direction is given after compliance with the above paragraphs, and the direction specifies:
(i) which of the strategies or which combination of strategies referred to in paragraph (a) is to be followed in relation to investments of the beneficiary’s, or class of beneficiaries’, interest in the fund; and
(ii) where applicable, matters related to the choice referred to in that paragraph.
Example
A strategy could allow the beneficiary, or class of beneficiaries, a choice in exposure to certain classes of asset. The beneficiary may choose 60% in fixed interest loans and 40% in shares and the choice of the level of exposure to the class of assets would be a ‘matter’ mentioned in subparagraph (ii).
Note Information regarding investment strategies is generally set out in a Product Disclosure Statement. However, a shorter Product Disclosure Statement may, in accordance with the modifications of the Corporations Act 2001 set out in Part 5B of Schedule 10A to the Corporations Regulations 2001:
(a) provide some of the information by applying, adopting or incorporating a matter in writing; or
(b) refer to information that is set out in another document.
(3) For the purposes of paragraph (1) (a), the following circumstance is stated, namely that the trustee clearly identifies to the beneficiary, or to each member of the class of beneficiaries, when giving to him, her or them a choice of 2 or more investment strategies in accordance with paragraph (2) (a), the strategy the trustee will adopt if no direction is given.
(4) Subregulation (3) does not apply in relation to a beneficiary or a member of a class of beneficiaries if it is a condition of membership for the beneficiary to choose a strategy or combination of strategies.
(5) For the purposes of paragraph 52 (4) (b) of the Act, the circumstances in which a direction of the kind referred to in that paragraph, if it is a subsequent direction of that kind, may be given are that:
(a) the beneficiary, or each member of the class of beneficiaries, is given all information the trustee reasonably believes a person would reasonably need for the purpose of understanding the effect of, and any risk involved in, the subsequent direction; and
(b) the subsequent direction is given after compliance with paragraph (a), and relates to the strategy to be followed in relation to the investment of the interest in the fund of the beneficiary or class of beneficiaries.
4.03 Trustee of employer‑sponsored fund — prescribed direction by employer‑sponsor or associate of employer sponsor
(1) For the purposes of paragraph 58 (2) (e) of the Act, the circumstances in which the governing rules of a superannuation entity (other than a superannuation fund with fewer than 5 members) may permit an employer‑sponsor or an associate of an employer‑sponsor to give a direction to the trustee of an employer‑sponsored fund are:
(a) where, after the implementation of the direction:
(i) the fund (if a defined benefit fund) would not become technically insolvent within the meaning of subregulation 9.06 (3); or
(ii) the fund (if an accumulation fund) would not become technically insolvent within the meaning of subregulation 9.35 (3); and
(b) where the direction would not require the trustee to contravene the Act (other than section 55) or these regulations; and
(c) where the direction qualifies under subregulation (2).
(2) A direction qualifies if:
(a) the contributions of the employer‑sponsor to the fund include contributions that are not mandated employer contributions (within the meaning of Part 5) and the direction relates solely to either or both of the following:
(i) those non‑mandated employer contributions; or
(ii) benefits related to those non‑mandated employer contributions; or
(b) whether or not paragraph (a) applies — the direction relates solely to one or more of the following:
(i) the admission of new members to the fund; or
(ii) the category of members into which a new member or existing member is to be placed; or
(iii) allowing a person to become an employer‑sponsor of the fund; or
(iv) the termination of the fund; or
(v) the appointment of a trustee to an entity that does not have a trustee.
4.04 Governing rules of a superannuation entity — prescribed exercise of discretion by non‑trustee
(1) For the purposes of subparagraph 59 (1) (b) (iii) of the Act, the circumstances in which a discretion under the governing rules of a superannuation entity other than a self managed superannuation fund may be exercised by a person other than the trustee are:
(a) where, after the exercise of the discretion:
(i) the fund (if a defined benefit fund) would not become technically insolvent within the meaning of subregulation 9.06 (3); or
(ii) the fund (if an accumulation fund) would not become technically insolvent within the meaning of subregulation 9.35 (3); and
(b) where the discretion could have been exercised by the trustee without contravening the Act (other than section 55) or these regulations; and
(c) where the discretion qualifies under subregulation (2).
(2) A discretion qualifies if:
(a) the contributions of the employer‑sponsor to the fund include contributions that are not mandated employer contributions (within the meaning of Part 5) and the discretion relates solely to either or both of the following:
(i) those non‑mandated employer contributions; or
(ii) benefits related to those non‑mandated employer contributions; or
(b) whether or not paragraph (a) applies — the discretion relates solely to one or more of the following:
(i) the admission of new members to the fund; or
(ii) the category of members into which a new member or existing member is to be placed; or
(iii) allowing a person to become an employer‑sponsor of the fund; or
(iv) the termination of the fund; or
(v) the appointment of a trustee to an entity that does not have a trustee.
4.05 Governing rules of a superannuation entity — prescribed circumstances of amendment
(1) For the purposes of subparagraph 60 (1) (b) (iii) of the Act, the circumstances in which the governing rules of a superannuation entity other than a self managed superannuation fund may be amended are:
(a) where, after the making of the amendment:
(i) the fund (if a defined benefit fund) would not become technically insolvent within the meaning of subregulation 9.06 (3); or
(ii) the fund (if an accumulation fund) would not become technically insolvent within the meaning of subregulation 9.35 (3); and
(b) where the amendment could have been made by the trustee without contravening the Act (other than section 55) or these regulations; and
(c) where the amendment qualifies under subregulation (2).
(2) An amendment qualifies if:
(a) the contributions of the employer‑sponsor to the fund include contributions that are not mandated employer contributions (within the meaning of Part 5) and the amendment relates solely to either or both of the following:
(i) those non‑mandated employer contributions; or
(ii) benefits related to those non‑mandated employer contributions; or
(b) whether or not paragraph (a) applies — the amendment relates solely to one or more of the following:
(i) the admission of new members to the fund; or
(ii) the category of members into which a new member or existing member is to be placed; or
(iii) allowing a person to become an employer‑sponsor of the fund; or
(iv) the termination of the fund; or
(v) the appointment of a trustee to an entity that does not have a trustee.
4.06 Removal of member representatives — prescribed circumstances
(1) For the purposes of sub‑subparagraph 107 (2) (a) (ii) (G) of the Act, the circumstances stated in subregulation (2) are prescribed as circumstances in which member representatives referred to in subparagraph 107 (2) (a) (ii) of the Act can be removed other than by the same procedure by which they were appointed.
(2) The circumstances referred to in subregulation (1) are:
(a) if the member representative resigns from the position of trustee, director of the trustee or representative on a policy committee; or
(b) if the member representative’s tenure of that position expires; or
(c) if the member representative ceases to be a member of the fund; or
(d) if the member representative ceases to satisfy a condition that the member representative was required to satisfy to be eligible for appointment.
4.07 Removal of independent trustee or independent member — prescribed circumstances
(1) For the purposes of subparagraph 108 (2) (a) (v) of the Act, the circumstances stated in subregulation (2) are prescribed as circumstances in which an additional independent trustee or additional independent director (the office‑holder) referred to in paragraph 108 (2) (a) of the Act can be removed other than by the same procedure by which they were appointed.
(2) The circumstances referred to in subregulation (1) are:
(a) if the office‑holder resigns from office; or
(b) if the office‑holder’s tenure of office expires; or
(c) if the office‑holder ceases to be:
(i) in the case of an additional independent trustee — an independent trustee; or
(ii) in the case of an additional independent director — an independent director; or
(d) if the office‑holder ceases to satisfy a condition that the office‑holder was required to satisfy to be eligible for appointment.
Division 4.1A Content of risk management strategies and risk management plans
4.07A Risk management strategies
(1) In this regulation:
material risk means a risk to a body corporate or group of individual trustees mentioned in subsection 29H (1) of the Act that has the potential, if realised, to:
(a) adversely affect the interests of members or beneficiaries of the registrable superannuation entity for which the body or group is the RSE licensee; or
(b) have a significant impact on the business operations, reputation, rate of return, profitability or net assets of the body or group.
(2) For paragraph 29H (2) (c) of the Act, the following matters are prescribed:
(a) any material risk (a relevant material risk) that is relevant to the body or group;
(b) an assessment of each relevant material risk, taking into account:
(i) the likelihood of the risk being realised; and
(ii) the consequences for the body or group if the risk is realised;
(c) the way in which the body or group proposes to treat each relevant material risk, including:
(i) the proposed risk response strategy or strategies for the risk; and
(ii) the measures and procedures that the body or group proposes to apply to address the risk;
(d) an assessment of the residual risk for each relevant material risk, having regard to:
(i) the assessment of the relevant material risk under paragraph (b); and
(ii) the likely effect of the proposed treatment of the relevant material risk under paragraph (c);
(e) the proposed arrangements for internal oversight, implementation and reporting in relation to the management of the relevant material risks by the body or group.
Note An RSE licence will not be granted unless APRA is satisfied that the risk management strategy for the body corporate or group of individual trustees meets the requirements of section 29H of the Act: see paragraph 29D (1) (e) of the Act.
4.07B Risk management plans
(1) In this regulation:
material risk means a risk to a registrable superannuation entity that has the potential, if realised, to:
(a) adversely affect the interests of members or beneficiaries of the entity; or
(b) have a significant impact on the business operations, reputation, rate of return, profitability or net assets of the entity.
(2) For paragraph 29P (2) (c) of the Act, the following matters are prescribed:
(a) any material risk (a relevant material risk) that is relevant to the registrable superannuation entity;
(b) an assessment of each relevant material risk, taking into account:
(i) the likelihood of the risk being realised; and
(ii) the consequences for the entity if the risk is realised;
(c) the way in which the RSE licensee proposes to treat each relevant material risk, including:
(i) the proposed risk response strategy or strategies for the risk; and
(ii) the measures and procedures that the RSE licensee proposes to apply to address the risk;
(d) an assessment of the residual risk for each relevant material risk, having regard to:
(i) the assessment of the relevant material risk under paragraph (b); and
(ii) the likely effect of the proposed treatment of the relevant material risk under paragraph (c);
(e) the proposed arrangements for internal oversight, implementation and reporting in relation to the management of the relevant material risks by the RSE licensee.
Note A registrable superannuation entity will not be registered unless APRA is satisfied that the risk management plan for the entity meets the requirements of section 29P of the Act: see paragraph 29M (1) (d) of the Act.
Division 4.2 Operating standards
4.08 Operating standard — voting rule where equal representation applies
(1) For the purposes of subsection 31 (1) of the Act, the standard stated in subregulation (3) is applicable to the operation of standard employer‑sponsored funds that must comply:
(a) under subsection 91 (4) or 93 (4) of the Act — with the basic equal representation rules; or
(b) under subsection 90 (3) of the Act — with either:
(i) the basic equal representation rules; or
(ii) the alternative agreed representation rule set out in subsection 90 (4) of the Act; or
(c) under subsection 92 (4) of the Act — with either:
(i) the basic equal representation rules; or
(ii) the alternative agreed representation rule set out in subsection 92 (5) of the Act.
(2) Despite subregulation (1), the standard stated in subregulation (3) is not applicable:
(a) to the operation of standard employer‑sponsored funds that comply with the alternative agreed representation rule set out in subsection 90 (4) or 92 (5) of the Act; or
(b) to a decision of a delegate of the individual trustees or of the board of directors of the corporate trustee of the fund if the delegation was approved by at least two‑thirds of the total number of the trustees or directors.
(3) A decision of:
(a) the individual trustees of a fund; or
(b) the board of directors of the corporate trustee of a fund;
must be taken not to have been made, or to be of no effect, if fewer than two‑thirds of the total number of the trustees or directors, as the case requires, voted for it.
4.08A Operating standard — member representation for certain regulated superannuation funds where a declaration under subsection 18 (7) of the Act applies
(1) For the purposes of subsection 31 (1) of the Act, the standard stated in subregulation (2) applies to the operation of regulated superannuation funds.
(2) A regulated superannuation fund:
(a) that is not a standard employer‑sponsored fund; and
(b) that has more than 4 members; and
(c) in relation to which a declaration under subsection 18 (7) of the Act is in force;
must have in place an arrangement in relation to the management and control of the fund that:
(d) has been agreed to by a majority of the members of the fund; and
(e) is approved by APRA in writing.
Note Subsection 18 (7) of the Act allows for funds to be declared not to be public offer funds.
(3) An approval for paragraph (2) (e):
(a) is subject to any conditions specified in the instrument of approval; and
(b) may be revoked by APRA by written notice given to the holder of the approval.
(4) APRA may vary the conditions of an approval for paragraph (2) (e) by written notice given to the holder of the approval.
(5) An approval that:
(a) was granted by the Commissioner or APRA under the regulation 4.08A that, under section 2 of Modification Declaration 10, had effect as if it had been inserted into these regulations; and
(b) was in force immediately before 1 March 2001;
continues in force as if granted by APRA for this regulation after that commencement.
Note Modification Declaration 10 was gazetted on 19 July 1995 under section 332 of the Act.
(6) When deciding whether or not to approve an arrangement for paragraph (2) (e), APRA must have regard to any written guidelines determined by APRA under this subregulation.
(7) This regulation does not apply to a fund if the fund has an acting trustee appointed under Part 17 of the Act.
4.09 Operating standard — investment strategy
(1) For the purposes of subsections 31 (1), 32 (1) and 33 (1) of the Act, the standard stated in subregulation (2) is applicable to the operation of superannuation entities.
(2) The trustee of the entity must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the entity including, but not limited to, the following:
(a) the risk involved in making, holding and realising, and the likely return from, the entity’s investments, having regard to its objectives and expected cash flow requirements;
(b) the composition of the entity’s investments as a whole, including the extent to which they are diverse or involve exposure of the entity to risks from inadequate diversification;
(c) the liquidity of the entity’s investments, having regard to its expected cash flow requirements;
(d) the ability of the entity to discharge its existing and prospective liabilities;
(e) for a self managed superannuation fund—whether the trustees of the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund.
(3) An investment strategy is taken to be in accordance with subregulation (2) even if it provides for a specified beneficiary or class of beneficiaries to give directions to the trustee where the directions:
(a) relate to the strategy to be followed by the trustee in relation to the investment of a particular asset or assets of the entity; and
(b) are given in the circumstances covered by regulation 4.02.
4.09A Operating standard—money and other assets to be kept separate (self managed superannuation funds)
(1) For subsection 31 (1) of the Act, the standard stated in subregulation (2) applies to the operation of regulated superannuation funds.
(2) A trustee of a regulated superannuation fund that is a self managed superannuation fund must keep the money and other assets of the fund separate from any money and assets, respectively:
(a) that are held by the trustee personally; or
(b) that are money or assets, as the case may be, of a
standard employer-sponsor, or an associate of a standard employer‑sponsor, of the fund.
4.10 Operating standard — investment by non‑complying superannuation funds
For the purposes of subsection 31 (1) of the Act, it is a standard applicable to the operation of regulated superannuation funds that, if the Regulator gives a notice to the trustee of an entity stating that the entity is not a complying superannuation fund, the trustee must take all reasonable steps to immediately dispose of any units held by the trustee in a PST, unless the Regulator otherwise directs.
4.10A Operating standard — ownership of units in a PST
(1) For paragraph 33 (2) (aa) of the Act, the standard stated in subregulation (2) is applicable to a registrable superannuation entity that is a PST.
(2) A trustee of the registrable superannuation entity must not offer ownership of units in the registrable superannuation entity unless the registrable superannuation entity is registered under Part 2B of the Act.
4.11 Operating standard — investment by non‑complying approved deposit funds
For the purposes of subsection 32 (1) of the Act, it is a standard applicable to the operation of approved deposit funds that, if APRA gives a notice to the trustee of an entity stating that the entity is not a complying approved deposit fund, the trustee must take all reasonable steps to immediately dispose of any units held by the trustee in a PST, unless APRA otherwise directs.
4.11A Operating standard — acceptance of deposits by an approved deposit fund
(1) For paragraph 32 (2) (aa) of the Act, the standard stated in subregulation (2) is applicable to a registrable superannuation entity that is an approved deposit fund.
(2) A trustee of the registrable superannuation entity must not accept deposits unless the registrable superannuation entity is registered under Part 2B of the Act.
4.12 Operating standard — acceptance by regulated superannuation and approved deposit funds of rollovers and transfers
(1) For the purposes of subsections 31 (1) and 32 (1) of the Act, it is a standard applicable to the operation of regulated superannuation funds and approved deposit funds that the trustee of a fund (the receiving trustee) must not accept the rollover or transfer of a benefit from another regulated superannuation fund or approved deposit fund, or from an EPSSS or RSA, (the transferring entity) if:
(a) the receiving trustee has reasonable grounds to believe that the benefit being rolled over or transferred is being rolled over or transferred on the basis of a belief held by the trustee or RSA provider of the transferring entity (as the case requires) that the receiving trustee has received the member’s or RSA holder’s consent to the rollover or transfer; and
(b) the receiving trustee has not received that consent.
(2) In this regulation:
consent means:
(a) written consent; or
(b) any other form of consent determined by the Regulator as sufficient in the circumstances.
4.13 Operating standard — lending to members of an approved deposit fund
(1) For the purposes of subsection 32 (1) of the Act, the standards stated in subregulations (2) and (3) are standards applicable to the operation of approved deposit funds.
(2) The trustee of a fund must not:
(a) lend money of the fund to:
(i) a member of the fund; or
(ii) a relative of a member of the fund; or
(b) give any other financial assistance using the resources of the fund to:
(i) a member of the fund; or
(ii) a relative of a member of the fund.
(3) The trustee of a fund must take all reasonable steps to ensure that the investment manager does not:
(a) lend money of the fund to:
(i) a member of the fund; or
(ii) a relative of a member of the fund; or
(b) give any other financial assistance using the resources of the fund to:
(i) a member of the fund; or
(ii) a relative of a member of the fund.
(4) In this regulation:
member, of a fund, includes the non‑member spouse in relation to a superannuation interest in the fund that is subject to a payment split.
relative has the same meaning as in the Income Tax Assessment Act.
4.14 Operating standard — fitness and propriety of RSE licensee
(1) In this regulation:
disqualified person means a disqualified person for Part 15 of the Act.
fit and proper standard means the standard mentioned in subregulation (3).
(2) For paragraphs 31 (2) (ma), 32 (2) (fa) and 33 (2) (ba) of the Act, the standard stated in this regulation is applicable to an RSE licensee.
Note An RSE licence will not be granted unless APRA is satisfied under paragraph 29D (1) (d) of the Act that the standard stated in this regulation is met.
(3) Subject to subregulations (5) and (6), an RSE licensee meets the fit and proper standard if the RSE licensee possesses relevant attributes that enable the RSE licensee to properly discharge the duties and responsibilities of an RSE licensee in a prudent manner.
(4) The attributes include, but are not limited to:
(a) character, competence, diligence, experience, honesty, integrity and judgement; and
(b) educational or technical qualifications, knowledge and skills relevant to the duties and responsibilities of an RSE licensee.
(5) An RSE licensee that is a body corporate does not meet the fit and proper standard if:
(a) the body corporate is a disqualified person; or
(b) a director of the body corporate is a disqualified person, and the body corporate does not, within 14 days after the body corporate becomes aware that the director is a disqualified person:
(i) notify APRA of that fact; and
(ii) remove the director.
(6) An RSE licensee that is a group of individual trustees does not meet the fit and proper standard if:
(a) an individual trustee who is a member of the group of individual trustees (the member) is a disqualified person; and
(b) the group of individual trustees does not, within 14 days after the group becomes aware that the member is a disqualified person:
(i) notify APRA of that fact; and
(ii) remove the member from the group.
(7) An RSE licensee must meet the fit and proper standard for all the period during which the RSE licence continues in force.
4.15 Operating standard — adequacy of resources of, or available to, trustees of registrable superannuation entities (RSE licensees)
(1) In this regulation:
adequate financial resources includes:
(a) adequate resources to ensure the ongoing solvency of the RSE licensee; and
(b) adequate liquidity to support the business operations of the RSE licensee.
adequate human resources includes adequate levels of personnel with the necessary knowledge, skills and expertise to enable the RSE licensee to effectively carry out its operations.
adequate technical resources includes:
(a) adequate technical systems, including adequate hardware and software; and
(b) adequate systems and resources to ensure protection, security and privacy of confidential, personal and sensitive material; and
(c) adequate technical resources to handle transaction processing and other operations; and
(d) adequate technical resources to handle any significant changes or increases in business size or capacity that are planned or forecast or that are likely to occur; and
(e) adequate disaster recovery and business continuity plans; and
(f) adequate records maintenance systems.
(2) For paragraphs 31 (2) (sb), 32 (2) (lb) and 33 (2) (jb) of the Act, the standard stated in this regulation is applicable to trustees of registrable superannuation entities as follows:
(a) if the trustee is a body corporate that holds an RSE licence — the body corporate;
(b) if the trustee is a member of a group of individual trustees that holds an RSE licence — the group.
Note An RSE licence will not be granted unless APRA has no reason to believe that the RSE licensee law would not be complied with. The RSE licensee law includes this regulation. See subsection 10 (1) and paragraph 29D (1) (a) of the Act.
(3) The body or group must, for all of the period during which the RSE licence continues in force, have adequate human, technical and financial resources available to it to enable it to undertake its activities as an RSE licensee.
(4) The body or group has adequate human, technical or financial resources available to it if:
(a) it has adequate resources of that kind in its own right; or
(b) it has available to it adequate resources of that kind under an enforceable agreement or undertaking.
4.16 Operating standard — outsourcing arrangements of RSE licensees
(1) In this regulation:
material business activity means a business activity of the RSE licensee of a registrable superannuation entity, a disruption to which, or the poor performance of which, has the potential to:
(a) affect the interests of members or beneficiaries of the entity; or
(b) have a significant impact on the business operations, reputation, rate of return, profitability or net assets of:
(i) the entity; or
(ii) the RSE licensee of the entity.
material outsourcing agreement means an agreement or arrangement:
(a) under which a person other than the RSE licensee (a service provider) is to perform a material business activity; and
(b) entered into with the service provider by:
(i) if the RSE licensee is a body corporate — the body corporate; or
(ii) if the RSE licensee is a group of individual trustees — the group as a whole, or any member of the group.
service provider does not include:
(a) if the RSE licensee is a body corporate — an employee of the body corporate acting in the capacity of an employee of the body corporate, or an officer of the body corporate acting in the capacity of an officer of the body corporate; or
(b) if the RSE licensee is a group of individual trustees — an employee of the group, or an employee of any member of the group, acting in the capacity of an employee of the group, or in the capacity of an employee of a member of the group.
(2) For paragraphs 31 (2) (sa), 32 (2) (la) and 33 (2) (ja) of the Act, the standard stated in this regulation is applicable to material outsourcing agreements.
Note An RSE licence will not be granted unless APRA has no reason to believe that the RSE licensee law would not be complied with. The RSE licensee law includes this regulation. See subsection 10 (1) and paragraph 29D (1) (a) of the Act.
(3) A material outsourcing agreement must comply with this regulation.
(4) A material outsourcing agreement must:
(a) be in writing; and
(b) state the commencement date of the agreement; and
(c) contain default arrangements and termination provisions; and
(d) provide for dispute resolution; and
(e) contain liability and indemnity provisions; and
(f) provide for confidentiality, privacy and security of information; and
(g) contain a pricing, fee and payments structure in relation to the performance of the material business activity; and
(h) contain audit, monitoring and assessment procedures in relation to the performance of the material business activity; and
(i) provide for business continuity planning, including transfer protocols relating to the handover of functions from the service provider to either a successor service provider or the RSE licensee on the cessation of the material outsourcing agreement.
(5) A material outsourcing agreement must provide that:
(a) the service provider must, on the written request of the RSE licensee or APRA, and within a time and at a place specified in the request that is reasonable in the circumstances, provide the RSE licensee or APRA, as requested, with any documents or information in the possession of the service provider relating to:
(i) the material outsourcing agreement; or
(ii) the material business activity performed under the agreement; and
(b) the service provider must, on the written request of the RSE licensee or APRA, and at a time that is reasonable in the circumstances, allow the RSE licensee or APRA, as requested, to:
(i) conduct on‑site visits to the service provider’s premises; and
(ii) access any documents or information relating to the registrable superannuation entity held at those premises; and
(c) the service provider must, on the written request of the RSE licensee or APRA, and within a time specified in the request that is reasonable in the circumstances, have an audit of its business activities under the material outsourcing agreement conducted by an independent auditor.
(6) A material outsourcing agreement must provide that any agreement or arrangement that a service provider enters into with another service provider for the performance of a material business activity under the material outsourcing agreement must comply with this subregulation and with subregulations (4) and (5), as if the agreement or arrangement were a material outsourcing agreement.
(7) An RSE licensee or a service provider must not charge APRA a fee for any of the following:
(a) the provision of, or provision of access to, any documents or information under subregulation (5);
(b) the provision of access to the service provider’s premises under subregulation (5);
(c) the conduct of an independent audit requested under subregulation (5).
(8) An RSE licensee must, if requested to do so by APRA, take all reasonable steps to enforce the material outsourcing agreement against a service provider in relation to:
(a) any matter mentioned in paragraph (5) (a), (b) or (c); and
(b) the matter mentioned in subregulation (6).
Note Part 15 of the Act also contains standards for trustees, custodians and investment managers of superannuation entities.
4.17 Outsourcing arrangements for licensing transition period
(1) In this regulation:
arrangements includes agreements or arrangements entered into at any time before the end of the licensing transition period.
business activity means a business activity that would be a material business activity if the business activity was a business activity of an RSE licensee.
(2) Any arrangements that are in place for the outsourcing of a business activity that were entered into by a person who:
(a) was a trustee of a registrable superannuation entity at the start of the licensing transition period; and
(b) was not an RSE licensee, or was not a member of a group that was an RSE licensee, at the time the arrangements were entered into;
must, at or before the end of the licensing transition period:
(c) comply with the standard stated in regulation 4.16; or
(d) be terminated by the person.
Note Licensing transition period is defined in subsection 10 (1) of the Act.
Part 5 Benefit protection standards
Division 5.1 Preliminary
5.01 Interpretation
(1) In this Part, unless the contrary intention appears:
accumulated deposit, in relation to a member of an approved deposit fund as at a particular time, means the total of the following amounts:
(a) amounts deposited in the fund for the member down to that time; and
(b) investment earnings on those amounts down to that time; less:
(c) the costs applicable to those amounts down to that time.
administration costs includes all fees and charges charged against a member’s benefits (whether or not charged against the contributions by or in respect of the member), other than:
(a) in the case of a member who was a member of the fund on 30 June 1995, the exit fee (if any) applicable to the member’s benefits at that date; and
(b) the cost (if any) of providing to the member:
(i) an insured death benefit; or
(ii) an insured permanent or temporary incapacity benefit; and
(c) taxation costs.
Note Examples of ‘taxation costs’: contributions tax, superannuation contributions surcharge.
cashed means cashed in accordance with Division 6.3.
costs, in relation to a member’s benefits in a regulated superannuation fund or an approved deposit fund as at any time, means the total costs determined under regulation 5.02 in relation to those benefits and charged to those benefits in accordance with that regulation down to that time.
deferred annuity means an annuity that is not payable on purchase, and the terms of which ensure:
(a) that payment of benefits under the annuity:
(i) is not commenced earlier than the time at which Part 6 permits or requires the benefits to be paid from an approved deposit fund; and
(ii) is to commence as soon as practicable after the annuitant:
(A) dies; or
(B) if the annuitant dies before attaining the age of 65 — would have attained that age; and
(b) that, except as permitted in relation to approved deposit funds by the Act or these Regulations, the provider of the annuity is not taken to recognise, or in any way encourage or sanction:
(i) an assignment of an interest under the annuity; or
(ii) the giving of a charge over, or in relation to, the annuity.
Government co‑contribution benefits means Government co‑contributions made under the Co‑contribution Act, less:
(a) the costs applicable to them; and
(b) any amounts repaid under section 24 of the Co‑contribution Act.
investment earnings, in relation to a member’s benefits (or a members’ benefits of a particular kind) in a regulated superannuation fund or an approved deposit fund as at any time, means the total of the amounts credited, less the total of the amounts debited, to the member’s account by way of investment return down to that time in respect of those benefits.
investment return, in relation to a member’s benefits (or a member’s benefits of a particular kind) in a regulated superannuation fund or an approved deposit fund over a particular period means:
(a) in the case of an approved deposit fund or an accumulation fund in which the trustee does not maintain reserves — the proportion of the return to the fund on investments over that period that is attributable to those benefits; or
(b) in the case of an approved deposit fund or an accumulation fund in which the trustee maintains reserves — the return determined by the trustee in accordance with regulation 5.03 for that period; or
(c) in the case of a defined benefit fund:
(i) the proportion of the return to the fund on investments over that period that is attributable to those benefits; or
(ii) the return on the benefits over that period that is fair and reasonable to all members of the fund, being a return based either on the actual return earned on the investments of the fund or on a commercially available rate of interest; or
(iii) the return on the benefits that is derived by increasing the benefits in proportion with the increase in the salary of the member over that period.
mandated employer contributions, in relation to a member of a regulated superannuation fund, means contributions by, or on behalf of, an employer that are equal to the sum of:
(a) the contributions made by, or on behalf of, the employer to the fund in relation to the member, that:
(i) reduce the employer’s potential liability for the superannuation guarantee charge imposed by section 5 of the Superannuation Guarantee Charge Act 1992; or
(ii) are payments of shortfall components; and
(b) the contributions (other than contributions of the kind specified in paragraph (a)) made by, or on behalf of, the employer to the fund in relation to the member in or towards satisfaction of the employer’s obligation to make contributions for the member, being an obligation under an agreement certified, or an award made, on or after 1 July 1986 by an industrial authority.
mandated employer‑financed benefits, in relation to a member of a regulated superannuation fund as at a particular time, means benefits equal to the sum of:
(a) the amount of the mandated employer contributions (if any) made to the fund in relation to the member down to that time; and
(b) the amount of the mandated employer‑financed benefits (if any) paid into the fund in relation to the member down to that time; and
(c) the amount of the investment earnings on those contributions and benefits down to that time;
less the costs applicable to the amounts down to that time.
member contributions, in relation to a member of a regulated superannuation fund, means contributions by, or on behalf of, the member to the fund, but does not include employer contributions made in respect of the member.
member‑financed benefits, in relation to a member of a regulated superannuation fund as at a particular time, means benefits equal to the sum of:
(a) the amount of the member contributions (if any) made to the fund in relation to the member down to that time; and
(b) the amount of the member‑financed benefits (if any) paid into the fund in relation to the member down to that time; and
(c) the amount of the investment earnings on those contributions and benefits down to that time;
less the costs applicable to those amounts down to that time.
OSS Laws means:
(a) the Occupational Superannuation Standards Act 1987 as in force immediately before the commencement of section 5 of the Occupational Superannuation Standards Amendment Act 1993; and
(b) the Occupational Superannuation Standards Regulations.
rolled over means paid as a superannuation lump sum (other than by way of being transferred) within the superannuation system.
superannuation provider means:
(a) the trustee of a regulated superannuation fund; or
(b) the trustee of an approved deposit fund; or
(c) an RSA provider.
superannuation system means the system comprising:
(a) regulated superannuation funds; and
(b) approved deposit funds; and
(c) the Commissioner of Taxation in the Commissioner of Taxation’s role as the maker of payments to a superannuation provider under the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(d) deferred annuities; and
(e) EPSSSs; and
(h) RSAs; and
(i) annuities.
transferred, in relation to a member’s benefits paid out of, or received by, a regulated superannuation fund or approved deposit fund, means paid to, or received from:
(a) another regulated superannuation fund or approved deposit fund; or
(b) an RSA provided by an RSA institution; or
(c) an EPSSS;
otherwise than upon the satisfaction by the member of a condition of release (within the meaning of Part 6) for all those benefits.
(2) For the purposes of this Part, a payment from the Superannuation Holding Accounts Special Account is taken to be a mandated employer contribution.
5.01A Operating standards — determination of costs and investment return
For the purposes of subsections 31 (1) and 32 (1) of the Act:
(a) the standard set out in subregulations 5.02 (1) and (3), 5.02B (2), 5.02C (2) and 5.03 (2) is applicable to the operation of regulated superannuation funds and approved deposit funds; and
(b) the standard set out in subregulation 5.03 (1) is applicable to the operation of:
(i) accumulation funds; and
(ii) approved deposit funds;
that maintain reserves.
5.01B Trustee may provide greater protection than this Part requires
The trustee of a regulated superannuation fund or approved deposit fund has the power, despite anything in the governing rules of the fund, to protect the benefits of members:
(a) to a greater degree than is required by this Part; or
(b) from an earlier date than is required by this Part;
if the trustee does so in a way that is consistent with this Part.
Note For example, a trustee might choose to protect the benefits of all members with withdrawal benefits less than $1,500, rather than all protected members (i.e., broadly, members with withdrawal benefits less than $1,000) as this Part requires. Protected member is defined in regulation 1.03.
5.02 Determination of costs
(1) The trustee of a regulated superannuation fund or an approved deposit fund must determine the costs to be charged from time to time against a member’s benefits in the fund.
(2) In determining the costs to be charged against a member’s benefits, the trustee may include:
(a) the direct costs of establishing, operating and terminating the fund; and
(b) any administrative, insurance and taxation costs relating to the establishment, operation and termination of the fund; and
(c) if the member’s benefits are subject to a payment split, the costs incurred in administering the payment split (not including the costs offset by any fees payable under regulation 59 of the Family Law (Superannuation) Regulations 2001 in respect of the payment split).
(3) Subject to the member‑protection standards and regulation 5.01B, in determining the costs to be charged against a member’s benefits, the trustee must ensure that the costs of the fund (including the costs (if any) incurred by the fund as a result of the operation of Division 5.4) are distributed in a fair and reasonable manner as between:
(a) all the members of the fund; and
(b) the various kinds of benefits of each member of the fund.
5.02A Meaning of fair and reasonable
(1) For the purposes of subregulation 5.02 (3), a distribution of costs in relation to a fund is not fair and reasonable if, in respect of a period that is, in relation to the fund, a good investment period, the trustee of the fund applies administration costs (being administration costs that would, but for the member‑protection standards, be applied to erode the minimum benefits of members of the fund to whom the member‑protection standards apply) in a way that erodes the benefits (other than the minimum benefits) of those members.
(2) For the purposes of subregulation (1), a period is a good investment period in relation to a fund if the total administration costs that would be charged to members of the fund but for regulation 5.17 is not greater than the total investment return of the fund that would be credited to members of the fund in respect of the period but for that regulation.
5.02B Priority in deducting surcharge or instalment
(1) This regulation applies if a trustee has decided to reduce a member’s benefits in connection with payment of a superannuation contributions surcharge or an advance instalment of surcharge.
(2) In reducing the member’s benefits, the trustee must:
(a) if possible — deduct an amount equal to the whole of the amount of the reduction from the preserved benefits; and
(b) if the required deduction cannot be met under paragraph (a) — deduct the balance from the restricted non‑preserved benefits; and
(c) if the required deduction cannot be met under paragraphs (a) and (b) — deduct the balance from the unrestricted non‑preserved benefits.
5.02C Refund of costs
(1) The trustee of a regulated superannuation fund or approved deposit fund may refund, to a member’s benefits in the fund, costs charged against the member’s benefits.
(2) In determining the amount of refund to be credited, the trustee must ensure that the total amount to be refunded is distributed in a fair and reasonable manner to all the members of the fund against whom the costs were charged.
5.03 Investment returns
(1) The trustee of an accumulation fund or an approved deposit fund that maintains reserves must determine the investment return to be credited or debited from time to time to a member’s benefit (or benefits of a particular kind) in the fund, having regard to:
(a) the return to the fund on investments; and
(b) the extent to which the costs of the fund exceed (or fall below) the aggregate of the costs charged to member’s benefits under regulation 5.02; and
(c) the level of the reserves of the entity.
(2) Subject to the member‑protection standards, regulation 5.01B and Division 6.1, the trustee of a regulated superannuation fund or an approved deposit fund must determine the investment return to be credited or debited to a member’s benefits (or benefits of a particular kind) in a way that is fair and reasonable as between:
(a) all the members of the fund; and
(b) the various kinds of benefits of each member of the fund.
Division 5.2 Minimum benefits
5.04 Minimum benefits — regulated superannuation funds
(1) Subject to regulations 5.05, 5.06 and 5.06B, a member’s minimum benefits in a regulated superannuation fund are as set out in this regulation.
(2) If the fund is an accumulation fund, the member’s minimum benefits are all of the member’s benefits in the fund.
(3) If the fund is a defined benefit fund, the member’s minimum benefits are as follows:
(a) if the member belongs to a class of employees in relation to which a relevant benefit certificate applies, the amount of the member’s minimum requisite benefit; or
(b) in any other case:
(i) the member’s member‑financed benefits; and
(ii) the member’s mandated employer‑financed benefits; and
(iii) Government co‑contribution benefits and any investment earnings on them; and
(iv) any amount allocated under regulation 292‑170.03 of the Income Tax Assessment Regulations 1997.
5.05 Mandated employer contributions — regulated superannuation funds
(1) Subject to this regulation, contributions to a regulated superannuation fund are taken to be mandated employer contributions.
(2) If:
(a) at least 1 year has elapsed since the fund received the contributions; and
(b) the trustee:
(i) is satisfied that the contributions are not in fact mandated employer contributions; and
(ii) decides not to continue to treat the contributions as mandated employer contributions;
subregulation (1) ceases to apply to the contributions.
(3) If:
(a) less than 1 year has elapsed since the fund received the contributions; and
(b) the trustee is satisfied that the contributions are not in fact mandated employer contributions;
subregulation (1) ceases to apply to the contributions.
(4) The trustee has power to make a decision of the kind mentioned in subparagraph 2 (b) (ii) despite anything in the governing rules of the fund.
Example of the application of this regulation
A trustee of a fund may receive a non‑mandated employer contribution from an employer‑sponsor of the fund that the trustee does not know is a non‑mandated employer contribution (i.e. a contribution not made in satisfaction of the employer‑sponsor’s superannuation guarantee or award obligation).
Upon acceptance, the contribution will be taken to be a mandated employer contribution and therefore subject to the minimum benefits standards.
From this point, one of three circumstances may apply:
(a) the trustee may become aware in the first year after the contribution was received that the contribution is a non‑mandated employer contribution, and, if this is the case, the trustee must treat the contribution as a non‑mandated employer contribution; or
(b) the trustee may become aware more than a year after the contribution was received that the contribution is a non‑mandated employer contribution, and, if this is the case, the trustee may continue to treat the contribution as a mandated employer contribution instead of making corrections to reflect the change; or
(c) the trustee may never become aware that the contribution is a non‑mandated employer contribution, and, if this is the case, the contribution will always be taken to be a mandated employer contribution.
5.06 Certain benefits rolled over or transferred to regulated superannuation funds taken to be minimum benefits
(1) Subject to this regulation, the following benefits are taken to be minimum benefits in a regulated superannuation fund:
(a) benefits rolled over or transferred to the regulated superannuation fund;
(b) benefits allotted under Division 6.7 to an interest in the regulated superannuation fund held by, or created for, a receiving spouse.
(2) If:
(a) at least 1 year has elapsed since the fund received the benefits; and
(b) the trustee:
(i) is satisfied that the benefits are not in fact minimum benefits; and
(ii) decides not to continue to treat the benefits as minimum benefits;
subregulation (1) ceases to apply to the benefits.
(3) If:
(a) less than 1 year has elapsed since the fund received the benefits; and
(b) the trustee is satisfied that the benefits are not in fact minimum benefits;
subregulation (1) ceases to apply to the benefits.
(4) If benefits that have been rolled over or transferred to a regulated superannuation fund are taken under this regulation to be minimum benefits, the amount of the minimum benefits as at any time is the sum of:
(a) the benefits rolled over or transferred to the fund; and
(b) the investment earnings on those benefits down to that time;
less the costs applicable to those benefits down to that time.
(5) The trustee has power to make a decision of the kind mentioned in subparagraph (2) (b) (ii) despite anything in the governing rules of the fund.
(6) In this regulation:
benefits means benefits other than benefits rolled over or transferred to a regulated superannuation fund from an RSA.
5.06A Benefits rolled over or transferred from an RSA to regulated superannuation funds taken to be minimum benefits
Benefits rolled over or transferred to a regulated superannuation fund from an RSA are taken to be minimum benefits in the regulated superannuation fund.
5.06B Minimum benefits if new interest created, or benefits rolled over or transferred, under Division 7A.2
(1) This regulation applies if:
(a) an interest (the original interest) in an accumulation fund is subject to a payment split; and
(b) under Division 7A.2:
(i) a new interest is created in the fund for the non‑member spouse; or
(ii) the transferable benefits of the non‑member spouse are rolled over or transferred to another fund, an EPSSS or an RSA.
(2) If subparagraph (1) (b) (i) applies, the trustee may decide that all the benefits held in the original interest, and in the new interest, immediately after the new interest is created are minimum benefits.
(3) If subparagraph (1) (b) (ii) applies, the trustee may decide that all the benefits held in the original interest immediately after the transferable benefits are rolled over or transferred are minimum benefits.
Note Transferable benefits rolled over or transferred to another regulated superannuation fund would be minimum benefits in accordance with regulation 5.06.
(4) However, the trustee must not make a decision mentioned in subregulation (2) or (3) if the decision would have the effect of reducing the minimum benefits held by the other members of the fund.
(5) If the trustee does not make a decision mentioned in subregulation (2) or (3), the minimum benefits held in the original interest are allocated between the member spouse and the non‑member spouse in proportion to the split of benefits in the original interest.
5.07 Minimum benefits — approved deposit funds
A member’s minimum benefits in an approved deposit fund are the amount of the member’s accumulated deposit in that fund.
Division 5.3 Treatment of minimum benefits
5.08 How minimum benefits are to be treated
(1) For subsections 31 (1) and 32 (1) of the Act, it is a standard applicable to the operation of regulated superannuation funds and approved deposit funds that the trustee of a fund must ensure that a member’s minimum benefits in the fund are maintained in the fund until the benefits are:
(a) cashed as benefits of the member, other than for the purpose of the member’s temporary incapacity; or
(b) rolled over or transferred as benefits of the member; or
(c) transferred, rolled over or allotted under Division 6.7.
(1A) Subregulation (1) does not apply if, under a law of the Commonwealth, a State or a Territory mentioned in the table, a court makes a forfeiture order (however called) forfeiting part or all of the member’s benefits in the fund to the Commonwealth, a State or a Territory.
| Item | Law | Provision(s) |
| Commonwealth | |
| 1.1 | Proceeds of Crime Act 2002 | Section 47 Section 48 Section 49 Section 92 |
| New South Wales | |
| 2.1 | Confiscation of Proceeds of Crime Act 1989 | Subsection 18 (1) |
| 2.2 | Criminal Assets Recovery Act 1990 | Section 22 |
| Victoria |
| 3.1 | Confiscation Act 1997 | Division 1 of Part 3 Section 35 Part 4 Subsection 157 (6) |
| Queensland |
| 4.1 | Criminal Proceeds Confiscation Act 2002 | Section 58 Section 58A Section 151 Part 5 of Chapter 3 |
| Western Australia |
| 5.1 | Criminal Property Confiscation Act 2000 | Section 30, to the extent that it applies to confiscation under section 6 in satisfaction of a person’s liability under section 20 Section 30, to the extent that it applies to confiscation under section 7 |
| South Australia |
| 6.1 | Criminal Assets Confiscation Act 2005 | Section 47 |
| Tasmania |
| 7.1 | Crime (Confiscation of Profits) Act 1993 | Section 16 |
| Australian Capital Territory |
| 8.1 | Confiscation of Criminal Assets Act 2003 | Section 54 Section 58 Section 62 Section 67 |
| Northern Territory |
| 9.1 | Criminal Property Forfeiture Act 2002 | Section 75 Section 76 Section 80 Section 96 Section 97 Section 99 |
(2) Subregulation (1) does not apply in relation to an amount of a member’s minimum benefits in an accumulation fund if:
(a) the amount is attributable only to employer contributions (other than mandated employer contributions); and
(b) there is a written agreement between the member of the fund and the member’s employer that:
(i) was entered into before the commencement of this subparagraph; and
(ii) requires the employer to make the employer contributions (other than mandated employer contributions) to the fund for the benefit of the member; and
(iii) specifies that if the member’s employment with the employer ends at or after the end of a period specified in the agreement, the employee is entitled to all of the amount; and
(iv) specifies that if the member’s employment with the employer ends before the end of the specified period, the member is entitled only to a proportion of the amount; and
(c) the member’s employment has ended before the end of the period mentioned in subparagraph (b) (iii).
(3) In addition to subregulation (1), a trustee of an accumulation fund may allow an amount of a member’s minimum benefits in the fund to be cashed as benefits of the member if:
(a) the cashing of the benefits is for the purpose of the member’s temporary incapacity; and
(b) the amount:
(i) is not attributable to the member’s member‑financed benefits; and
(ii) is not attributable to the member’s mandated employer‑financed benefits.
Division 5.5 Member‑protection standards
5.12 Interpretation
In this Division:
exit fee means a fee charged by a trustee of a fund in relation to a payment of benefits in the fund, being a fee that the trustee would not have charged if the payment had not been made.
member reporting period, in relation to a fund, means the reporting period that applies under subsection 1017D (2) of the Corporations Act 2001 and associated provisions.
5.13 Operating standards — member protection
For the purposes of subsections 31 (1) and 32 (1) of the Act, a requirement set out in this Division is a standard applicable to the operation of regulated superannuation funds and approved deposit funds.
5.14 Member‑protection standards not to apply to certain funds
(1) In this regulation:
unitised fund means a fund for which the investment return is reflected in the price of units in the fund rather than being credited to or debited against the accounts of the members.
(2) The member‑protection standards do not apply to a unitised fund if:
(a) a single price is applicable both to the buying and selling of units in the fund and all the administration costs of the fund are reflected in that price; or
(b) separate prices are applicable, respectively, to the buying and selling of units in the fund and:
(i) the price differential, also known as the buy/sell
cost spread, is solely attributable to outgoings comprising:
(A) brokerage costs; and
(B) fees and charges charged against a member’s benefits that are excluded from the definition of administration costs under paragraphs (a), (b) and (c) of that definition in subregulation 5.01 (1); and
(ii) the brokerage costs referred to in sub‑subparagraph (i) (A), if any, are applied proportionally in relation to all units in the fund; and
(iii) all the administration costs of the fund, except for any brokerage costs applied in accordance with sub‑subparagraph (i) (A) and subparagraph (ii), are reflected in both the buy price and the sell price of the units; or
(c) the administration costs of the fund are not wholly reflected in the price, or prices, of units in the fund but the benefits of its members are protected in a way that is consistent with the member‑protection standards.
(3) The member protection standards do not apply to a fund that is not a unitised fund if all of the administration costs of the fund are applied to each member in direct proportion to:
(a) the investment return credited to, or debited against, the member; or
(b) the member’s benefits.
5.15 Member‑protection standards not to apply to certain protected members
If:
(a) a member of a fund is a protected member at the end of a member reporting period; and
(b) the trustee of the fund has a reasonable expectation (in accordance with regulation 7.9.24 of the Corporations Regulations 2001 and subsections 7.1 (12) to (15) of Part 7 of Schedule 10A to the Corporations Regulations 2001) that the member will have a withdrawal benefit of at least $1,500 within 12 months after the end of that member reporting period; and
(c) his or her withdrawal benefits reach $1,500 within 12 months after the end of that member reporting period;
he or she is taken not to have been subject to the member‑protection standards from the beginning of that member reporting period until the end of that period of 12 months.
Note See regulation 2.26B in relation to protected members whose benefits are reasonably expected to reach $1,500 within the period of 12 months after the end of a member reporting period.
5.15B Member‑protection standards taken not to have applied to certain members
(1) If:
(a) before 1 July 1995, the trustee of a regulated superannuation fund has formed the intention:
(i) to apply, on behalf of a member of the fund, to an eligible rollover fund for the issue to the member of a superannuation interest in the latter fund; or
(ii) not to protect the benefits of a member; and
(b) the trustee keeps a record of having formed that intention, being a record that identifies the member; and
(c) the benefits of the member are paid out of the fund before 1 October 1995; and
(d) the trustee has not charged an exit fee in respect of the payment of those benefits out of the fund;
the member‑protection standards are taken not to have applied to the member in respect of his or her membership of the fund during the period ending on the date on which the last of the member’s benefits are paid out of the fund.
(2) In subregulation (1), a reference to payment of benefits out of a fund includes:
(a) rolling over or transferring the benefits; and
(b) cashing the benefits; and
(c) any combination of rolling over, transferring and cashing the benefits.
5.15C Member‑protection standards not to apply to pensions
The member‑protection standards do not apply to any part of a member’s benefits which has commenced to be taken in the form of a pension.
5.15D Member‑protection standards not to apply to traditional life insurance policies
The member‑protection standards do not apply to a part of a member’s benefits that is wholly determined by a life insurance policy within the meaning of the Life Insurance Act 1995 if:
(a) the policy includes an investment component; and
(b) the premium is not dissected (whether by reference to the investment component or otherwise); and
(c) the sum insured, together with bonuses (if any), is payable only upon:
(i) the death of the life insured; or
(ii) the occurrence of the earlier of the following events:
(A) the death of the life insured; or
(B) the attainment by the life insured of the age specified in the policy.
5.16 Application of member‑protection standards to sub‑fund
(1) Subject to subregulation (2), the trustee of a fund may treat a sub‑fund within the fund as a fund for the purposes of the member‑protection standards if the sub‑fund satisfies the following conditions (otherwise than for the purposes of winding up):
(a) the sub‑fund has separately identifiable assets and separately identifiable beneficiaries; and
(b) the interest of each beneficiary of the sub‑fund is determined by reference only to the conditions governing that sub‑fund; and
(c) there is no transfer of assets, benefits or money between the sub‑fund and another sub‑fund without a transfer of a corresponding beneficial interest; and
(d) the insurance and administration costs of the sub‑fund are attributable only to the sub‑fund.
(2) The trustee may not treat a sub‑fund as a fund if the purpose of doing so is to circumvent the member‑protection standards.
5.17 Member‑protection standards
(1) This regulation applies in relation to a member of a fund who, on or after 1 July 1995, is a protected member.
(2) Subject to subregulation (4), the sum charged as administration costs in respect of a relevant member reporting period against the minimum benefit component of the benefits of a member to whom this regulation applies must not exceed the investment return credited to, or debited against, the member’s minimum benefits for that period.
(3) For subregulation (2) and subject to subregulation (4), a member reporting period for a protected member is a relevant member reporting period if:
(a) the period ends after 30 June 1995; and
(b) at the end of the period, and subject to any adjustment affecting the member’s benefits (net of any exit fee) made by the trustee in respect of the period, the member is a protected member.
(4) For subregulations (2) and (3), if a member reporting period begins before and ends after 1 July 1995, a trustee may treat only the part of that period beginning on 1 July 1995 as being a relevant member reporting period.
(5) If, under Division 5.6, a member elects to waive member protection, the last relevant member reporting period in relation to that member is taken to end at the end of the day when, under regulation 5.22, the member‑protection standards cease to apply to the member.
(6) Subregulation (2) does not apply to a member (except for a member of a fund that is a capital guaranteed fund within the meaning of the Corporations Regulations 2001) if, in a member reporting period:
(a) the total of the administration costs that would be charged to members of a fund but for this regulation is greater than the total investment return that would be credited to or debited against members of the fund but for this regulation in respect of that period; and
(b) the apportionment of those costs between members is carried out in a fair and equitable manner.
(8) For the purposes of this regulation, an exit fee other than an exit fee of an amount equal to the exit fee applicable to the member’s benefit at 30 June 1995 is taken to be charged against the relevant member’s minimum benefit.
(9) For the purposes of paragraph (6) (b), an apportionment of costs is taken to be fair and equitable only if:
(a) each member of the fund is charged no more than:
(i) the amount that the member would be charged if all administration costs charged against member’s benefits were distributed in direct proportion to:
(A) the investment return credited to, or debited against, the member’s benefits; or
(B) the member’s benefits; or
(ii) the investment return credited to the member’s benefits, plus $10; or
(b) each protected member of the fund is charged no more than an amount equal to the investment return credited to the member’s benefits, plus $10.
(10) For the purposes of this regulation, a member’s benefits are taken to be composed wholly of mandated employer‑financed benefits except for:
(a) the portion (if any) of the benefits that:
(i) arose in relation to contributions made before 1 July 1995; and
(ii) the trustee reasonably believes are not mandated employer‑financed benefits; and
(b) the portion (if any) of the benefits that:
(i) arose in relation to contributions made on or after 1 July 1995; and
(ii) the trustee knows are not mandated employer‑ financed benefits.
(11) Despite anything in this regulation, a trustee of a fund may protect the benefits of a member from an earlier date than this regulation requires.
5.18 Costs not to be deferred
If the trustee of a fund would charge costs to a member in respect of a member reporting period but for regulation 5.17, the trustee must not charge those costs to the member in a future member reporting period, whether in combination with other costs or not.
Division 5.6 Existing personal superannuation members
5.19 Interpretation
In this Division:
existing personal superannuation member means a member of a regulated superannuation fund who:
(a) joined the fund before 1 July 1995; and
(b) at the time he or she joined the fund, was not a person in respect of whom there was in effect a contribution arrangement of the kind referred to in subsection 16 (5) of the Act (which deals with the definition of standard employer‑sponsored member).
5.20 Operating standards — existing personal superannuation members
For the purposes of subsection 31 (1) of the Act, a requirement set out in this Division is a standard applicable to the operation of regulated superannuation funds.
5.21 Trustee may offer election to existing personal superannuation members
(1) The trustee of a regulated superannuation fund that has existing personal superannuation members may offer in writing to each of those members the right to elect never to be treated by the fund as if he or she were a protected member.
(2) If the trustee offers a member the right to elect never to be treated as a protected member, the trustee:
(a) must also offer the member the right to elect to have the member’s benefits paid to an entity of the member’s choice; and
(b) may also offer the member the right to elect to have the member’s benefits paid in any other way.
Note The trustee also has the power, under Part 24 of the Act, to pay benefits to an eligible rollover fund.
(3) The trustee may specify an entity (in this regulation called the default entity) that will be taken to be the member’s choice of entity if:
(a) a member elects to have benefits paid to another entity but does not specify the entity; or
(b) a member elects to have benefits paid to another entity but that other entity refuses to accept the benefits.
(4) The default entity must be:
(a) an entity to which the member‑protection standards relating to the protection of protected members apply; or
(b) an eligible rollover fund.
(5) A member to whom a trustee offers the right to make an election under subregulations (1) and (2) is not obliged to elect in favour of any of the courses set out in that subregulation.
(6) For the purposes of this Division, if:
(a) a member specifies an entity to which his or her benefits are to be paid, but that entity refuses to accept the payment; or
(b) the member elects to have his or her benefits paid to another entity, but does not specify the entity;
the member is taken to have elected to have his or her benefits paid to the default entity.
(7) If a trustee offers members of the fund the right to make an election, the trustee must provide each member to whom the election is offered with the following information:
(a) the contact details (within the meaning of the Corporations Regulations 2001) of the default entity, if any;
(b) a statement that:
(i) states that a member is not obliged to make an election in favour of any of the courses offered; and
(ii) sets out the effect of not making an election; and
(iii) sets out the effect of making an election in favour of each of the courses offered; and
(iv) sets out the circumstances in which the member will be taken to have elected to have his or her benefits paid to the default entity;
(c) the amount, or, subject to subregulation (8), the approximate amount, of the member’s benefits in the fund.
(8) A fund may inform a member under paragraph (7) (c) of the approximate amount of the member’s benefits if, at the time the information is to be given, the trustee of the fund cannot determine the exact amount of the member’s benefits in the fund.
5.22 What happens if the member waives member protection?
(1) If under regulation 5.21 a member of a fund elects to waive member protection, the member‑protection standards cease to apply to the member:
(a) if the waiver takes place before 1 October 1995 — from 1 July 1995; or
(b) in any other case — from the date of the waiver.
Note See subregulation 5.17 (5) in regard to the end of the last relevant member reporting period in this case.
(2) If under regulation 5.21 a member of a fund elects to waive member protection, the waiver ceases to have effect when the member ceases to be a member of the fund.
5.23 What happens if the member elects to have benefits paid out of the fund?
If a member of a fund elects to have his or her benefits paid out of the fund under this Division, and the payment takes place before 1 October 1995, the member‑protection standards are taken never to have applied in relation to the member’s membership of the fund.
5.24 What happens if the trustee pays benefits paid out of the fund?
If:
(a) the trustee of a fund has written to a member offering the right to elect under regulation 5.21; and
(b) the member does not elect to waive member protection; and
(c) the trustee pays benefits of the member out of the fund;
the trustee must not charge an exit fee in respect of the payment.
Part 6 Payment standards
Division 6.1 Introductory
Subdivision 6.1.1 General interpretation
6.01 Interpretation
(1) Subject to subregulation (2), expressions used in this Part that are defined for the purposes of Part 5 have the same meanings respectively as in that Part.
(2) In this Part and in Schedule 1, unless the contrary intention appears:
cashing restriction, in relation to a condition of release, means a cashing restriction specified in column 3 of the item in Schedule 1 that mentions the condition of release.
changeover day, in relation to a type B member of a fund, means the changeover day that was fixed for the class of members of the fund in which the member is included.
commencement day means:
(a) in relation to a regulated superannuation fund, the later of:
(i) the first day of the 1994‑95 year of income of the fund; or
(ii) the day on which the trustee or trustees of the fund make an election under section 19 of the Act; and
(b) in relation to an approved deposit fund:
(i) if the first day of the 1994‑95 year of income of the fund is on or after 1 July 1994 — the first day of that year of income; or
(ii) if the first day of that year of income is before 1 July 1994 — the earlier of:
(A) 1 July 1994; or
(B) the day on which the fund became an approved deposit fund.
Commonwealth income support payment means:
(a) an income support supplement, service pension or social security pension as defined in subsection 23 (1) of the Social Security Act 1991; or
(b) a social security benefit as defined in that subsection, other than:
(i) an austudy payment; or
(ii) a youth allowance paid to a person who is undertaking full‑time study; or
(c) a drought relief payment under the Farm Household Support Act 1992 as in force immediately before the commencement of the Farm Household Support Amendment (Restart and Exceptional Circumstances) Act 1997; or
(d) an exceptional circumstances relief payment under the Farm Household Support Act 1992; or
(e) a payment of salary or wages made under the employment scheme of the Commonwealth that is known as the Community Development Employment Projects Scheme; or
(f) a payment of income support for the purposes of the Farm Family Support Scheme.
compassionate ground, in relation to the release of a member’s preserved benefits, or restricted non‑preserved benefits, in a superannuation entity, means a ground listed in subregulation 6.19A (1).
condition of release means a condition of release specified in Column 2 of Schedule 1 and, subject to regulation 6.01B, a member of a fund is taken to have satisfied a condition of release if the event specified in that condition has occurred in relation to the member.
indexed, in relation to a benefit, means indexed in accordance with section 159SG of the Tax Act (as in force before 1 July 2007), modified so that subsection (1) reads as follows:
‘(1) The benefit as indexed for each year of income is:
(a) in relation to the year of income in which occurs the day on which a benefit was required to have been calculated or was received by the fund — the amount of the benefit that was calculated or received; or
(b) in relation to a later year of income — the amount calculated by multiplying the benefit for the immediately preceding year of income by the indexation factor worked out in accordance with subsection (2) for the later year of income.’
lump sum, in this Part but not in Schedule 1, includes an asset.
non‑commutable allocated annuity means an annuity provided under a contract that:
(a) meets the standards of subregulation 1.05 (4); and
(b) ensures that payments of benefits are made only in accordance with the rules set out in regulations 6.16, 6.18, 6.19 and 6.22A, as if:
(i) the annuity were a regulated superannuation fund; and
(ii) the annuitant were a member of the fund; and
(iii) the annuity provider were a trustee of the fund; and
(c) ensures that, if the annuity is commuted, the resulting superannuation lump sum cannot be cashed unless:
(i) the purpose of the commutation is:
(A) to cash an unrestricted non‑preserved benefit; or
(B) to pay a superannuation contributions surcharge; or
(C) to give effect to an entitlement of a non‑member spouse under a payment split; or
(D) to ensure that a payment may be made for the purpose of giving effect to a release authority under:
(I) section 292‑415 of the Income Tax Assessment Act 1997; or
(II) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997; or
(ii) before commutation, the annuitant has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; or
(iii) the purpose of the commutation is to satisfy an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999.
non‑commutable allocated pension means a pension provided under rules of a superannuation fund that:
(a) meet the standards of subregulation 1.06 (4); and
(b) ensure that, if the pension is commuted, the resulting superannuation lump sum cannot be cashed unless:
(i) the purpose of the commutation is:
(A) to cash an unrestricted non‑preserved benefit; or
(B) to pay a superannuation contributions surcharge; or
(C) to give effect to an entitlement of a non‑member spouse under a payment split; or
(D) to ensure that a payment may be made for the purpose of giving effect to a release authority under:
(I) section 292‑415 of the Income Tax Assessment Act 1997; or
(II) section 292‑80C of the Income Tax (Transitional Provisions) Act 1997; or
(ii) before commutation, the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; or
(iii) the purpose of the commutation is to satisfy an obligation to pay an amount to the Commissioner of Taxation under subsection 20F (1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999.
non‑commutable annuity means an annuity provided under a contract that:
(a) meets the standards of subregulation 1.05 (2), (9) or (10); and
(b) ensures that payments of benefits are made only in accordance with the rules set out in regulations 6.16, 6.18, 6.19 and 6.22A, as if:
(i) the annuity were a regulated superannuation fund; and
(ii) the annuitant were a member of the fund; and
(iii) the annuity provider were a trustee of the fund; and
(c) ensures that, if the annuity is commuted under subparagraph 1.05 (2) (f) (i), (9) (h) (i) or (10) (d) (i), the resulting superannuation lump sum cannot be cashed unless:
(i) the purpose of the commutation is to cash an unrestricted non‑preserved benefit; or
(ii) before commutation, the annuitant has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’.
non‑commutable income stream means a benefit that:
(a) cannot be commuted; and
(b) is paid at least monthly; and
(c) does not have a residual capital value; and
(d) is such that the total amount paid each month is fixed or varies only:
(i) for the purpose of complying with the Act and these regulations; and
(ii) during any period of 12 months by a rate not exceeding either:
(A) 5% per annum; or
(B) the rate of increase in the last Consumer Price Index (All Capital Cities) for a quarter to be published by the Australian Statistician before the end of that period of 12 months compared with the Consumer Price Index (All Capital Cities) published for the same quarter in the preceding year.
non‑commutable pension means a pension provided under rules of a superannuation fund that:
(a) meet the standards of subregulation 1.06 (2), (7) or (8); and
(b) ensure that, if the pension is commuted under subparagraph 1.06 (2) (e) (i), (7) (g) (i) or (8) (d) (i), the resulting superannuation lump sum cannot be cashed unless:
(i) the purpose of the commutation is to cash an unrestricted non‑preserved benefit; or
(ii) before commutation, the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’.
permanent incapacity, in relation to a member, means ill‑health (whether physical or mental), where the trustee is reasonably satisfied that the member is unlikely, because of the ill‑health, to engage in gainful employment for which the member is reasonably qualified by education, training or experience
permanent resident means a holder of a permanent visa under the Migration Act 1958 that has not ceased to be in effect.
preservation age means:
(a) for a person born before 1 July 1960 — 55 years; or
(b) for a person born during the year 1 July 1960 to 30 June 1961 — 56 years; or
(c) for a person born during the year 1 July 1961 to 30 June 1962 — 57 years; or
(d) for a person born during the year 1 July 1962 to 30 June 1963 — 58 years; or
(e) for a person born during the year 1 July 1963 to 30 June 1964 — 59 years; or
(f) for a person born after 30 June 1964 — 60 years.
restricted non‑preserved contributions means undeducted contributions (within the meaning of subregulation (6)) of a member other than contributions that were preserved in satisfaction of requirements of the Tax Act, the OSS Laws the Superannuation Industry (Supervision) (Transitional Provisions) Regulations, the RSA Regulations or these regulations leading to income tax concessions.
retirement has the meaning given by subregulation (7).
severe financial hardship has the meaning given by subregulation (5).
temporary incapacity, in relation to a member who has ceased to be gainfully employed (including a member who has ceased temporarily to receive any gain or reward under a continuing arrangement for the member to be gainfully employed), means ill‑health (whether physical or mental) that caused the member to cease to be gainfully employed but does not constitute permanent incapacity.
temporary resident means a holder of a temporary visa under the Migration Act 1958.
terminal medical condition has the meaning given by regulation 6.01A.
transition to retirement income stream means:
(a) an annuity provided under a contract that:
(i) is a contract:
(A) to which paragraph 1.05 (11A) (a) applies; and
(B) that meets the standards of subregulation 1.05 (11A); and
(ii) allows total payments (excluding payments by way of commutation, but including payments under a payment split) made in a financial year to amount to no more than 10% of the annuity account balance:
(A) on 1 July in the financial year in which the payment is made; or
(B) if that year is the year in which the annuity commences — on the commencement day;
unless the annuitant has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(iii) complies with paragraphs (b) and (c) of the definition of non‑commutable allocated annuity, as if it were such an annuity; or
(b) a pension provided from a superannuation fund, the rules of which:
(i) are rules:
(A) to which paragraph 1.06 (9A) (a) applies; and
(B) that meet the standards of subregulation 1.06 (9A); and
(ii) allow total payments (excluding payments by way of commutation but including payments under a payment split) made in a financial year to amount to no more than 10% of the pension account balance:
(A) on 1 July in the financial year in which the payment is made; or
(B) if that year is the year in which the pension commences — on the commencement day;
unless the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(iii) comply with paragraph (b) of the definition of non‑commutable allocated pension, as if it were such a pension.
transitional period, in relation to a superannuation fund, means the period beginning at the beginning of the fund’s 1994‑1995 year of income and ending:
(a) in the case of a public sector superannuation scheme — at the end of the day when the scheme became an exempt public sector superannuation scheme; or
(b) in any other case — at the end of the day when the trustee of the fund lodges an election under section 19 of the Act.
type A member means a member of a regulated superannuation fund included in a class of members for which no changeover day, fixed under these regulations as in force before 30 June 1998, was reached before 30 June 1998 in relation to that fund.
type B member means a member of a regulated superannuation fund included in a class of members for which a changeover day, fixed under these regulations as in force before 30 June 1998, was reached before 30 June 1998 in relation to that fund.
(5) For the purposes of Schedule 1, a person is taken to be in severe financial hardship if:
(a) the trustee of a superannuation entity is satisfied:
(i) based on written evidence provided by at least one Commonwealth department or agency responsible for administering a class of Commonwealth income support payments, that:
(A) the person has received Commonwealth income support payments for a continuous period of 26 weeks; and
(B) the person was in receipt of payments of that kind on the date of the written evidence; and
(ii) that the person is unable to meet reasonable and immediate family living expenses; or
(b) the person has reached the age that is the person’s preservation age plus 39 weeks and the trustee of a superannuation entity is satisfied:
(i) based on written evidence provided by at least one Commonwealth department or agency responsible for administering a class of Commonwealth income support payments — that the person received Commonwealth income support payments for a cumulative period of 39 weeks after the person reached the person’s preservation age; and
(ii) that the person was not gainfully employed on a full‑time, or part‑time, basis on the date of the application for cashing of his or her preserved benefits, or restricted non‑preserved benefits, in the entity.
(5A) The written evidence provided for by paragraph (5) (a) is of no effect if it is dated more than 21 days before the date of the person’s application to the trustee for cashing of his or her preserved benefits or restricted non‑preserved benefits.
(6) Amounts to the credit of a member (except eligible spouse contributions) in a fund are undeducted contributions if:
(a) the amounts are undeducted contributions within the meaning that was given, before 1 July 2007, by subsection 27A (1) of the Tax Act; or
(b) for any other amounts — the amounts comprise member contributions:
(i) made after 30 June 1983 in order to obtain superannuation benefits (within the meaning of the Tax Act); and
(ii) in respect of which no deduction is allowable or has been allowed to the member under the former section 82AAT of the Tax Act.
(7) For the purposes of Schedule 1, the retirement of a person is taken to occur:
(a) in the case of a person who has reached a preservation age that is less than 60 — if:
(i) an arrangement under which the member was gainfully employed has come to an end; and
(ii) the trustee is reasonably satisfied that the person intends never to again become gainfully employed, either on a full‑time or a part‑time basis; or
(b) in the case of a person who has attained the age of 60 — an arrangement under which the member was gainfully employed has come to an end, and either of the following circumstances apply:
(i) the person attained that age on or before the ending of the employment; or
(ii) the trustee is reasonably satisfied that the person intends never to again become gainfully employed, either on a full‑time or a part‑time basis.
(8) A reference in this Part to preserved benefits, restricted non‑ preserved benefits, restricted non‑preserved contributions, unrestricted non‑preserved benefits and post‑65 employer‑ financed benefits includes benefits, or contributions (as the case may be), rolled over, or transferred, from an RSA.
6.01A Meaning of terminal medical condition
For Schedule 1, a terminal medical condition exists in relation to a person at a particular time if the following circumstances exist:
(a) two registered medical practitioners have certified, jointly or separately, that the person suffers from an illness, or has incurred an injury, that is likely to result in the death of the person within a period (the certification period) that ends not more than 12 months after the date of the certification;
(b) at least one of the registered medical practitioners is a specialist practicing in an area related to the illness or injury suffered by the person;
(c) for each of the certificates, the certification period has not ended.
6.01B Conditions of release for temporary residents
(1) This regulation applies to a member who is or was a temporary resident.
(2) This regulation does not apply to a member who:
(a) is an Australian citizen, a New Zealand citizen or a permanent resident; or
(b) is, at any time, the holder of a Subclass 405 (Investor Retirement) visa or a Subclass 410 (Retirement) visa described in Schedule 2 to the Migration Regulations 1994.
(3) The only conditions of release that can be satisfied in respect of a member to whom this regulation applies are:
(a) a condition of release that was satisfied by the member before 1 April 2009; and
(b) the conditions of release in items 102, 102A, 103, 103A, 103B, 109, 112, 112A, 202, 202A, 203, 204, 204A, 209 and 209A of Schedule 1.
Subdivision 6.1.2 Preserved benefits
6.02 Preserved benefits in regulated superannuation funds — before 1 July 1999
Type A members before 1 July 1999; type B members before changeover day
(1) Subject to regulations 6.06 and 6.12 and to Subdivision 6.1.5, the amount of preserved benefits in a regulated superannuation fund:
(a) for a type A member at any time during the period commencing on the commencement day and ending immediately before 1 July 1999; or
(b) for a type B member at any time during the period commencing on the commencement day and ending immediately before the changeover day;
is the amount required to be preserved under the OSS laws as applied in accordance with subregulation (2).
(2) For subregulation (1), despite the repeal of sections of the Occupational Superannuation Standards Act 1987 by the Occupational Superannuation Standards Amendment Act 1993, the OSS laws are taken to have continued in force, subject to the modifications set out in Schedule 2, in relation to regulated superannuation funds as if the references in the OSS laws (as so modified) to superannuation funds were references to regulated superannuation funds within the meaning of these regulations.
Type B members on and after changeover day
(3) Subject to regulation 6.12 and to Subdivision 6.1.5, the amount of a type B member’s preserved benefits in a regulated superannuation fund at any time on or after the changeover day and before 1 July 1999 is the amount of the member’s total benefits in the fund less the sum of:
(a) the amount of the member’s restricted non‑preserved benefits in the fund as defined by regulation 6.07; and
(b) the amount of the member’s unrestricted non‑preserved benefits in the fund as defined by regulation 6.10.
6.03 Preserved benefits in regulated superannuation funds — on and after 1 July 1999
Subject to regulation 6.12 and to Subdivision 6.1.5, the amount of a member’s preserved benefits in a regulated superannuation fund at any time on or after 1 July 1999 is the amount of the member’s total benefits in the fund less the sum of:
(a) the amount of the member’s restricted non‑preserved benefits in the fund as defined by regulation 6.08; and
(b) the amount of the member’s unrestricted non‑preserved benefits in the fund as defined by regulation 6.10.
6.05 Preserved benefits in approved deposit funds
The amount of a member’s preserved benefits in an approved deposit fund on or after the commencement day is the amount of the member’s total benefits in the fund less the amount of the member’s unrestricted non‑preserved benefits in the fund as defined by regulation 6.11.
6.06 Effect of rollover or transfer on preserved benefits
Subject to regulation 6.12 and to Subdivision 6.1.5, a member’s benefits in a regulated superannuation fund or an approved deposit fund (the transferee fund) that were preserved benefits in the source from which they were received continue to be preserved benefits in the transferee fund.
Subdivision 6.1.3 Restricted non‑preserved benefits
Note Approved deposit funds do not have restricted non‑preserved benefits.
6.07 Restricted non‑preserved benefits in regulated superannuation funds — before 1 July 1999
Type A members before 1 July 1999; type B members before changeover day
(1) Subject to regulations 6.09 and 6.12 and to Subdivision 6.1.5, the amount of restricted non‑preserved benefits in a regulated superannuation fund:
(a) for a type A member at any time during the period commencing on the commencement day and ending immediately before 1 July 1999; or
(b) for a type B member at any time during the period commencing on the commencement day and ending immediately before the changeover day;
is the amount of the member’s total benefits in the fund, less the sum of:
(c) the amount of the member’s preserved benefits in the fund as defined by regulation 6.02; and
(d) the amount of the member’s unrestricted non‑preserved benefits in the fund as defined by regulation 6.10.
Type B members on and after changeover day
(2) Subject to regulation 6.12 and to Subdivision 6.1.5, the amount of a type B member’s restricted non‑preserved benefits in a regulated superannuation fund at any time on or after the changeover day and before 1 July 1999 is the greatest of the following amounts:
(a) the total of:
(i) the indexed amount of the member’s restricted non‑preserved benefits (as defined by subregulation (1)) in the fund that would be payable to the member on the changeover day if the member resigned from employment on that day; and
(ii) the indexed amount of the member’s restricted non‑preserved benefits received by the fund from another regulated superannuation fund, an RSA or an EPSSS on or after the changeover day that are subject to indexation in the fund;
(b) the total of:
(i) the indexed amount of the member’s restricted non‑preserved benefits (as defined by subregulation (1)) in the fund on the changeover day that would be payable to the member if the member were retrenched from employment that day; and
(ii) the indexed amount of the member’s restricted non‑preserved benefits received by the fund from another regulated superannuation fund, an RSA or an EPSSS on or after the changeover day that are subject to indexation in that other fund, RSA or EPSSS;
(c) the amount of the member’s restricted non‑preserved contributions in the fund.
(3) Subject to regulation 6.12 and to Subdivision 6.1.5, a type B member’s benefits in a regulated superannuation fund (the transferee fund) that:
(a) were rolled over or transferred from another regulated superannuation fund, an RSA or an EPSSS; and
(b) were indexed amounts of restricted non‑preserved benefits in that other fund, RSA or EPSSS;
continue to be subject to indexation in the transferee fund.
(4) Subject to regulation 6.12 and to Subdivision 6.1.5, a type B member’s benefits in a regulated superannuation fund (the transferee fund) that:
(a) were rolled over or transferred from another regulated superannuation fund, an RSA or an EPSSS; and
(b) were restricted non‑preserved contributions in that other fund, RSA or EPSSS;
continue to be restricted non‑preserved contributions in the transferee fund.
(5) The references in this regulation to indexation apply subject to regulation 6.14.
6.08 Restricted non‑preserved benefits in regulated superannuation funds — on and after 1 July 1999
(1) Subject to regulations 6.09 and 6.12 and to Subdivision 6.1.5, the amount of a member’s restricted non‑preserved benefits in a regulated superannuation fund at any time on or after 1 July 1999 is the sum of the following amounts:
(a) either:
(i) for a type A member who is a defined benefit member and for whom the trustee of the regulated superannuation fund chooses to apply this subparagraph — the greater of the amounts of restricted non‑preserved benefits in the fund, worked out under subregulation 6.07 (1), that would be payable to the member on 1 July 1999 if, on 1 July 1999, the member:
(A) resigned from employment; or
(B) was retrenched from employment; or
(ii) for a member to whom subparagraph (i) does not apply — the member’s restricted non‑preserved benefits in the fund on 30 June 1999, worked out under regulation 6.07; and
(b) the member’s restricted non‑preserved benefits received by the fund from another regulated superannuation fund, an RSA or an EPSSS on and after 1 July 1999.
(2) However, if:
(a) on or after 1 July 1999, a deduction is allowed for the member under the former section 82AAT of the Income Tax Assessment Act 1936 for a member contribution made before 1 July 1999; and
(b) the benefits arising from the contribution were previously allocated to restricted non‑preserved benefits;
the benefits are taken to be preserved benefits.
6.09 Effect of rollover or transfer on restricted non‑preserved benefits
Subject to regulation 6.12 and to Subdivision 6.1.5, a member’s benefits in a regulated superannuation fund that were restricted non‑preserved benefits in the source from which they were received continue to be restricted non‑preserved benefits.
Subdivision 6.1.4 Unrestricted non‑preserved benefits
6.10 Unrestricted non‑preserved benefits — regulated superannuation funds
(1) Subject to Subdivision 6.1.5, the amount of a member’s unrestricted non‑preserved benefits in a regulated superannuation fund is the sum of:
(a) the amount of benefits of the member that have become unrestricted non‑preserved benefits in the fund in accordance with regulation 6.12; and
(b) the amounts specified in subregulation (2) that the fund receives in respect of the member on or after the commencement day, and that were received by the regulated superannuation fund before 1 July 2004; and
(c) the amount of unrestricted non‑preserved benefits received by the fund in respect of the member on or after the commencement day; and
(d) the amount of any investment earnings for the period before 1 July 1999 on the amounts mentioned in paragraphs (a), (b) and (c).
(2) The amounts mentioned in paragraph (1) (b) are amounts (other than an amount that is a capital gains tax exempt component) that:
(a) will be taken by section 27D of the Tax Act, as in force before 1 July 2007, to have been expended out of eligible termination payments within the meaning of that section; and
(b) have been received from sources other than:
(i) superannuation funds; or
(ii) approved deposit funds within the meaning of:
(A) the Act; or
(B) the Occupational Superannuation Standards Act 1987 as in force immediately before
the commencement of section 5 of the Occupational Superannuation Standards Amendment Act 1993; or
(iii) deferred annuities within the meaning of:
(A) this Part; or
(B) the Occupational Superannuation Standards Regulations; or
(iv) RSAs.
(3) However, if:
(a) on or after 1 July 1999, a deduction is allowed for the member under the former section 82AAT of the Income Tax Assessment Act 1936 for a member contribution made before 1 July 1999; and
(b) the benefits arising from the contribution were previously allocated to restricted non‑preserved benefits that became unrestricted non‑preserved benefits under subregulation 6.12 (2);
the benefits are taken to be preserved benefits.
6.11 Unrestricted non‑preserved benefits — approved deposit funds
(1) Subject to Subdivision 6.1.5, the amount of a member’s unrestricted non‑preserved benefits in an approved deposit fund is the sum of:
(a) the amount of the member’s benefits in the fund at the end of the day immediately before the commencement day less the amount of the member’s benefits in the fund that were required to be preserved by regulation 21 of the Occupational Superannuation Standards Regulations; and
(b) the amount of benefits of the member that have become unrestricted non‑preserved benefits in the fund in accordance with regulation 6.12; and
(c) the amounts specified in subregulation (2) that the fund receives in respect of the member on or after the commencement day, and that were received by the approved deposit fund before 1 July 2004; and
(d) the amount of unrestricted non‑preserved benefits received by the fund in respect of the member on or after the commencement day; and
(e) the amount of any investment earnings for the period before 1 July 1999 on the amounts mentioned in paragraphs (a), (b), (c) and (d).
(2) The amounts mentioned in paragraph (1) (c) are amounts (other than an amount that is a capital gains tax exempt component) that:
(a) will be taken by section 27D of the Tax Act, as in force before 1 July 2007, to have been expended out of eligible termination payments within the meaning of that section; and
(b) have been received from sources other than:
(i) superannuation funds; or
(ii) approved deposit funds within the meaning of:
(A) the Act; or
(B) the Occupational Superannuation Standards Act 1987 as in force immediately before
the commencement of section 5 of the Occupational Superannuation Standards Amendment Act 1993; or
(iii) deferred annuities within the meaning of:
(A) this Part; or
(B) the Occupational Superannuation Standards Regulations; or
(iv) RSAs.
6.12 Movement of benefits between categories by satisfaction of conditions of release
(1) If:
(a) a member of a regulated superannuation fund or an approved deposit fund satisfies a condition of release; and
(b) the relevant cashing restriction in respect of preserved benefits is ‘Nil’;
the member’s preserved benefits in the fund at that time cease to be preserved benefits and become unrestricted non‑ preserved benefits.
(2) If:
(a) a member of a regulated superannuation fund satisfies a condition of release; and
(b) the relevant cashing restriction in respect of restricted non‑preserved benefits is ‘Nil’;
the member’s restricted non‑preserved benefits in the fund at that time cease to be restricted non‑preserved benefits and become unrestricted non‑preserved benefits.
(3) This regulation has effect subject to Subdivision 6.1.5.
6.13 Effect of rollover or transfer on unrestricted non‑preserved benefits
Subject to Subdivision 6.1.5, a member’s benefits in a regulated superannuation fund or an approved deposit fund (the transferee fund) that were unrestricted non‑preserved benefits in the source from which they were received continue to be unrestricted non‑preserved benefits in the transferee fund.
Subdivision 6.1.5 Miscellaneous
6.14 Indexation
(1) Benefits that are referred to in this Division as indexed may be aggregated for the purpose of that indexation.
(2) This regulation has no effect after 30 June 1999.
6.15 Contributions and benefits taken to be preserved benefits
(1) Contributions made, or benefits rolled over or transferred, to a regulated superannuation fund or an approved deposit fund are taken to be preserved benefits for the purposes of this Division unless and until the trustee is satisfied that they are not preserved benefits.
(2) Benefits rolled over, transferred or allotted under Division 6.7 to an interest in a regulated superannuation fund held by, or created for, a receiving spouse are taken to be preserved benefits for the purposes of this Division.
6.15A Certain benefits taken to be unrestricted non‑preserved benefits
(1) Benefits in a fund are unrestricted non‑preserved benefits if:
(a) during the transitional period of the fund, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a ‘Nil’ cashing restriction if these regulations applied; or
(b) both:
(i) the benefits were rolled over or transferred to the fund from:
(A) a superannuation fund (Fund A) during its transitional period; or
(B) a regulated superannuation fund or an approved deposit fund to which the benefits were rolled over or transferred from a superannuation fund (Fund B) during its transitional period; and
(ii) the trustee is reasonably satisfied that:
(A) during the transitional period of Fund A or Fund B, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a ‘Nil’ cashing restriction if these regulations applied; or
(B) before the benefits were rolled over or transferred to Fund A or Fund B from a regulated superannuation fund or an approved deposit fund, the relevant cashing restriction set out in Schedule 1 in respect of the benefits was ‘Nil’.
(2) An investment earning in relation to a benefit of any kind is an unrestricted non‑preserved benefit on a day if:
(a) the benefit was cashed, before that day, in the form of a non‑commutable life pension; and
(b) for a benefit that was commenced under the condition of release mentioned in item 110 or 208 of Schedule 1, the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(c) the pension commenced to be paid before that day.
(3) An investment earning in relation to a benefit of any kind is an unrestricted non‑preserved benefit on a day if:
(a) the benefit was cashed, before that day, in the form of a non‑commutable life annuity; and
(b) for a benefit that was commenced under the condition of release mentioned in item 110 or 208 of Schedule 1, the annuitant has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(c) the annuity commenced to be paid before that day.
(4) An investment earning in relation to a benefit is an unrestricted non‑preserved benefit on a day if:
(a) the benefit is an unrestricted non‑preserved benefit; and
(b) the benefit was cashed, before that day, in the form of a pension; and
(c) for a benefit that was commenced under the condition of release mentioned in item 110 or 208 of Schedule 1, the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(d) the pension commenced to be paid before that day.
(5) An investment earning in relation to a benefit is an unrestricted non‑preserved benefit on a day if:
(a) the benefit is an unrestricted non‑preserved benefit; and
(b) the benefit was cashed, before that day, in the form of an annuity; and
(c) for a benefit that was commenced under the condition of release mentioned in item 110 or 208 of Schedule 1, the annuitant has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non‑preserved benefits is ‘Nil’; and
(d) the annuity commenced to be paid before that day.
6.16 Redistribution of member benefits within a fund in certain circumstances by operation of governing rules or action of trustee
(1) For the purpose of subregulation (2), the following are categories of benefits:
(a) preserved benefits, as defined in Subdivision 6.1.2;
(b) restricted non‑preserved benefits, as defined in Subdivision 6.1.3;
(c) unrestricted non‑preserved benefits, as defined in Subdivision 6.1.4.
(2) For the purposes of this Part, the governing rules of a fund, or the trustee of a fund, may alter the category of any of a member’s benefits in the fund but, subject to subregulation (3), not so as to:
(a) decrease the amount of the member’s preserved benefits in the fund; or
(b) increase the amount of the member’s unrestricted non‑preserved benefits in the fund.
(3) The trustee may alter the category of benefits in a fund from preserved benefits to unrestricted non‑preserved benefits if:
(a) before the commencement of regulation 6.15A and during the transitional period of the fund, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a ‘Nil’ cashing restriction if these regulations applied; or
(b) before the commencement of regulation 6.15A, both:
(i) the benefits were rolled over or transferred to the fund from:
(A) a