Superannuation Industry (Supervision) Regulations (Amendment) (Cth)

Statutory Rules 1997No. 309 1

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Superannuation Industry (Supervision) Regulations2 (Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Superannuation Industry (Supervision) Act 1993.

Dated 29 October 1997.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

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1.   Amendment

1.1   The Superannuation Industry (Supervision) Regulations are amended as set out in these Regulations.

[NOTE:  These Regulations commence on gazettal: see Acts Interpretation Act 1901, s 48.]

2.   Regulation 1.03 (Interpretation)

2.1   Subregulation 1.03 (1):

Insert the following definitions:

“‘advance instalment of surcharge’ means the advance instalment payable under section 11 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;

‘superannuation contributions surcharge’ means the superannuation contributions surcharge imposed by the Superannuation Contributions Tax Imposition Act 1997;”

3.   Regulation 1.05 (Meaning of “annuity”—section 10 of Act)

3.1   Paragraph 1.05 (2) (b):

Omit the paragraph, substitute:

• “(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; and”. 

3.2   Subparagraph 1.05 (2) (f) (iii):

Omit “and”, substitute “or”.

 

3.3   Paragraph 1.05 (2) (f):

Add at the end:

• “(iv)

  to pay a superannuation contributions surcharge; and”. 

3.4   Paragraph 1.05 (6) (e):

Before “variation”, insert “except in relation to payments, by way of commutation, for superannuation contributions surcharge,”.

 

4.   Regulation 1.06 (Meaning of “pension”—section 10 of Act)

4.1   Paragraph 1.06 (2) (b):

Omit the paragraph, substitute:

• “(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; and”.

4.2   Subparagraph 1.06 (2) (e) (iii):

Omit “and”, substitute “or”.

 

4.3   Paragraph 1.06 (2) (e):

Add at the end:

• “(iv)

  to pay a superannuation contributions surcharge; and”. 

4.4   Paragraph 1.06 (6) (e):

Before “variation”, insert “except in relation to payments, by way of commutation, for superannuation contributions surcharge,”.

 

4.5   Paragraph 1.06 (6) (g):

Before “the conversion”, insert “except if conversion is in relation to a commutation to pay a superannuation contributions surcharge,”.

 

5.   Regulation 1.08 (Restriction on factors for converting pensions)

5.1   Subregulation 1.08 (2):

Omit the subregulation, substitute:

 “(2) Subregulation (1) does not apply to the use of a factor that:

• (a)

  the Commissioner has approved in writing; or

(b) is for conversion in relation to a commutation to pay a superannuation contributions surcharge.”. 

6.   Regulation 2.01 (Interpretation)

6.1   Subregulation 2.01 (1):

Insert the following definition:

“‘unfunded defined benefits fund’ means a defined benefits fund under which all or some of the amounts that will be required for the payment of a benefit are not paid into the fund until the member concerned becomes entitled to receive the benefit.”. 

7.   Regulation 2.24 (Specific requirements in particular cases)

7.1   After subregulation 2.24 (1), insert:

 “(1A) The trustee of a fund must give to each member the following information in respect of the member, so far as it is applicable:

• (a)

  if the fund is an unfunded defined benefits fund—details of the surcharge debt account kept by the trustee, under subsection 16 (2) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, for the member, including:

  • (i)

    the balance of the account at the start of the reporting period; and

  • (ii)

    the amount debited to the account for superannuation contributions surcharge assessed, by the Commissioner of Taxation, to be payable on the member’s surchargeable contributions; and

  • (iii)

    the amount of interest debited, under subsection 16 (4) of that Act, to the account during the reporting period; and

  • (iv)

    the balance of the account at the end of the reporting period;

• (b)

  if the trustee reduced the member’s benefits in connection with payment of a superannuation contributions surcharge or an advance instalment of surcharge:

  • (i)

    the amount deducted; and

  • (ii)

    if there is a difference between the amount deducted and the amount assessed under subsection 15 (1) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 or between the amount deducted and the amount determined under subsection 15 (2) of that Act—a statement explaining the difference.”. 

8.   Regulation 2.25 (Exception—pensioners)

8.1   Add at the end:

 “(2) Subregulation (1) does not apply to information under subregulation 2.24 (1A).”. 

9.   Regulation 2.26A (Exception—members subject to compulsory protection of small amounts)

9.1   Subregulation 2.26A (1):

Add at the end:

• “; and (c)

  in so far as applicable, the information mentioned in paragraph 2.24 (1A) (a) or (b), as appropriate.”. 

10.   Regulation 2.29 (Specific requirements in particular cases)

10.1   Subregulation 2.29 (1):

Add at the end:

• “; (o)

  the ultimate source (including, for example, the fund’s reserves, the members’ accounts or the employer) from which payments in connection with superannuation contributions surcharges or advance instalments of surcharge will be drawn.”. 

11.   Regulation 2.30 (Excluded funds—special provision)

11.1 Omit all the words after “fund”, substitute “need give a member only the information mentioned in paragraph 2.29 (1) (o).”.

 

12.   Regulation 2.47 (Specific requirements in particular cases)

12.1   After subregulation 2.47 (1), insert:

 “(1A) The trustee of a fund must also disclose to a person who ceases, otherwise than by death, to be a member of the fund:

• (a)

  any amount deducted, from the member’s benefits, in connection with payment of a superannuation contributions surcharge, or an advance instalment of surcharge, during the exit reporting period; and

• (b)

  if there is a difference between the amount deducted and the amount assessed under subsection 15 (1) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 or between the amount deducted and the amount determined under subsection 15 (2) of that Act—a statement explaining the difference; and

• (c)

  if the fund is an unfunded defined benefits fund—details of the surcharge debt account kept by the trustee, under subsection 16 (2) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, for the member, including:

  • (i)

    the balance of the account at the start of the exit reporting period; and

  • (ii)

    the amount debited to the account during the exit reporting period for superannuation contributions surcharge assessed, by the Commissioner of Taxation, to be payable on the member’s surchargeable contributions; and

  • (iii)

    the amount of interest debited, under subsection 16 (4) of that Act, to the account during the exit reporting period; and

  • (iv)

    the balance of the account at the end of the exit reporting period.”. 

13.   Regulation 2.48A (Exception—members subject to compulsory protection of small amounts)

13.1   Subregulation 2.48A (3):

Add at the end:

• “; (c)

  the amount of any deduction, from the member’s benefits, in connection with payment of a superannuation contributions surcharge, or an advance instalment of surcharge, during the exit reporting period;

• (d)

  if there is a difference between the amount deducted and the amount assessed under subsection 15 (1) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 or between the amount deducted and the amount determined under subsection 15 (2) of that Act—a statement explaining the difference;

• (e)

  if the fund is an unfunded defined benefits fund—details of the surcharge debt account kept by the trustee, under subsection 16 (2) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, for the member, including:

  • (i)

    the balance of the account at the start of the exit reporting period; and

  • (ii)

    the amount debited to the account during the exit reporting period for superannuation contributions surcharge assessed, by the Commissioner of Taxation, to be payable on the member’s surchargeable contributions; and

  • (iii)

    the amount of interest debited, under subsection 16 (4) of that Act, to the account during the exit reporting period; and

  • (iv)

    the balance of the account at the end of the exit reporting period.”. 

14.   Regulation 5.01 (Interpretation)

[NOTE:  The note following the definition of “administration costs” in subregulation 5.01 (1) should be omitted and the following note substituted:

“[NOTE:  Examples of ‘taxation costs’:  contributions tax, superannuation contributions surcharge.]”.]

15.   Regulation 5.01A (Operating standards—determination of costs and investment return)

15.1   Paragraph 5.01A (a):

Before “and 5.03 (2)”, insert “, 5.02B (2), 5.02C (2)”.

 

16.   New regulations 5.02B and 5.02C

16.1   After regulation 5.02A, insert:

Priority in deducting surcharge or instalment

 “5.02B.(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. 

Refund of costs

 “5.02C.(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.”. 

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 5 November 1997.

2. Statutory Rules 1994 No. 57 as amended by 1994 Nos. 189 and 432; 1995 Nos. 47, 64, 142, 158, 159, 240, 293, 384 and 430; 1996 Nos. 44, 57, 122 and 344; 1997 Nos. 69, 117, 152, 153, 221, 243 and 293.