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

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Statutory Rules 1998

No. 83 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 28 April 1998.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

____________

1.   Commencement

1.1 Regulation 15 commences on 1 November 1998.

 

1.2   The remainder of these Regulations commence on gazettal.

2.   Amendment

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

3.   Regulation 1.03 (Interpretation)

3.1   Subregulation 1.03 (1) (definition of “reviewable decision”):

After paragraph (ba), insert:

  1. “(bb)

    to specify a day under regulation 12.08; or”.

4.   Regulation 1.04 (Section 10 of the Act—prescribed matters)

4.1   Subregulation 1.04 (4D):

Omit “, and subsequent years of income,”.

4.2   After subregulation 1.04 (4D), insert:

 “(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.”.

5.   Regulation 2.08 (Application)

5.1   Subregulation 2.08 (2):

Omit the subregulation.

Note   Note 2 in the notes following regulation 2.08 should be replaced by the following note:

Note 2   The purpose of the ‘information’ provisions in relation to approved deposit funds (other than excluded approved deposit funds) and public offer superannuation funds is to prescribe information that, under Subdivision 3A of Part 19 of the Act, must be given before a public offer entity does certain acts; see sections 157, 157A and 158. In certain circumstances, that information is not required; see subsections 157 (3), (4) and (5) of the Act and subregulation 2.09 (2).”.

6.   Regulation 2.29 (Specific requirements in particular cases)

6.1   Subregulation 2.29 (1):

After paragraph 2.29 (1) (g), insert:

  1. “(ga)

    if the derivatives charge ratio of the fund (as defined in subregulation (5)) exceeded 5% at any time during the reporting period:

    1. (i)

      the derivatives charge ratio as at the end of the reporting period; and

    2. (ii)

      the highest derivatives charge ratio attained during the reporting period; and

    3. (iii)

      an explanation of why the derivatives charge ratio exceeded 5%; and

    4. (iv)

      an explanation of the meaning of ‘derivatives charge ratio’ in, or to the effect of, the following:

     ‘The derivatives charge ratio is the percentage of the total market value of the assets of the fund (other than cash) that the trustee has charged as security for derivatives investments made by the trustee.’;”.

6.2   Add at the end:

 “(5) For the purposes of paragraph (1) (ga), 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)); and

Y is the market value of all the assets of the fund.

 “(6) If paragraph (1) (ga) applies, the trustee must give the information mentioned in that paragraph to the Commissioner as soon as practicable, and in any event within 6 months, after the end of the reporting period to which the information relates.”. 

7.   Regulation 2.41 (Specific requirements)

7.1   Subregulation 2.41 (2):

After “subregulation 2.40 (3))”, insert “or an employer-sponsor”.

8.   Division 2.6A (Information in respect of inquiries and complaints)

8.1   Heading:

Omit “in respect of inquiries and”, substitute “about”.

9.   Regulation 2.41A (Application)

9.1   Subregulation 2.41A (1):

Omit “an inquiry or complaint”, substitute “a complaint”.

10.   Regulation 2.41B (Information in respect of inquiries and complaints)

10.1   Omit the regulation, substitute:

Information about complaints

 “2.41B. The trustee must give to the person, at the time when the trustee makes a decision in relation to the complaint, details of the existence and (in outline terms) the functions of the Superannuation Complaints Tribunal.”.

11.   Regulation 4.08 (Operating standard—voting rule where equal representation applies)

11.1   Subregulation 4.08 (2):

Omit the subregulation, substitute:

 “(2) Despite subregulation (1), the standard stated in subregulation (3) is not applicable:

  1. (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

  2. (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.”.

12.   Regulation 5.01 (Interpretation)

12.1   Subregulation 5.01 (1) (definition of “deferred annuity”, subparagraph (b) (i)):

Omit the subparagraph, substitute:

  1. “(i)

    that payment of benefits under the annuity:

    1. (A)

      is not commenced earlier than the time when Part 6 permits or requires the benefits to be paid from an approved deposit fund; and

    2. (B)

      is to commence as soon as practicable after the annuitant attains (or, if the annuitant has died, would have attained) age 65; and”.

13.   Regulation 6.01 (Interpretation)

13.1   Subregulation 6.01 (2):

Insert the following definition:

“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:

  1. (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

  2. (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.”.

14.   New regulation 6.15A

14.1   After regulation 6.15, insert:

Certain benefits taken to be unrestricted non-preserved benefits

 “6.15A. Benefits in a fund are unrestricted non-preserved benefits if:

  1. (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

  2. (b)

    both:

    1. (i)

      the benefits were rolled over or transferred to the fund from:

      1. (A)

        a superannuation fund (Fund A) during its transitional period; or

      2. (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

    2. (ii)

      the trustee is reasonably satisfied that:

      1. (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

      2. (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’.”.

15.   Regulation 6.16 (Redistribution of member benefits within a fund in certain circumstances by operation of governing rules or action of trustee)

15.1   Subregulation 6.16 (2):

After “but”, insert “, subject to subregulation (3),”.

15.2   Add at the end:

 “(3) The trustee may alter the category of benefits in a fund from preserved benefits to unrestricted non-preserved benefits if:

  1. (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

  2. (b)

    before the commencement of regulation 6.15A, both:

    1. (i)

      the benefits were rolled over or transferred to the fund from:

      1. (A)

        a superannuation fund (Fund A) during its transitional period; or

      2. (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

    2. (ii)

      the trustee is reasonably satisfied that:

      1. (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

      2. (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’.”.

16.   Regulation 6.21 (Compulsory cashing of benefits in regulated superannuation funds)

16.1   Paragraph 6.21 (2) (a)

Omit the paragraph, substitute:

  1. “(a)

    in respect of each person to whom benefits are cashed:

    1. (i)

      a single lump sum; or

    2. (ii)

      an interim lump sum (not exceeding the amount of the benefits ascertained at the date of an event mentioned in subregulation (1) or (1A)) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event).”.

17.   Regulation 6.25 (Compulsory cashing of benefits in approved deposit funds)

17.1   Subregulation 6.25 (2):

Omit the subregulation, substitute:

 “(2) The form in which benefits may be cashed under this regulation is, in respect of each person to whom benefits are cashed:

  1. (a)

    a single lump sum; or

  2. (b)

    an interim lump sum (not exceeding the amount of the benefits ascertained at the date of an event mentioned in subregulation (1)) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event).”.

18.   Regulation 13.14 (Charges over assets of funds)

18.1   Omit “subject to regulation 13.15,”, insert “subject to regulations 13.15 and 13.15A,”.

19.   New regulation 13.15A

19.1   After regulation 13.15, insert:

Charges in relation to certain derivatives contracts

 “13.15A. (1) A trustee may give a charge over, or in relation to, an asset of a fund if:

  1. (a)

    the charge is given in relation to a derivatives contract entered into:

    1. (i)

      by, or on behalf of, the trustee; or

    2. (ii)

      by a broker on the instructions, or on account , of the trustee; or

    3. (iii)

      by a broker for the benefit of the trustee; and

  2. (b)

    the charge is given in order to comply with the rules of an approved body (as defined in subregulation (2)) that requires the performance of obligations in relation to the derivatives contract to be secured; and

  3. (c)

    the fund has in place a risk management statement that sets out:

    1. (i)

      policies for the use of derivatives that include an analysis of the risks associated with the use of derivatives within the investment strategy of the fund; and

    2. (ii)

      restrictions and controls on the use of derivatives that take into consideration the expertise of staff; and

    3. (iii)

      compliance processes to ensure that the controls are effective (for example, reporting procedures, internal and external audits and staff management procedures); and

  4. (d)

    the investment to which the charge relates is made in accordance with the risk management statement.

 “(2) In this regulation:

approved body means:

  1. (a)

    Australian Stock Exchange Ltd;

  2. (b)

    Options Clearing House Pty Ltd;

  3. (c)

    Sydney Futures Exchange Ltd;

  4. (d)

    Sydney Futures Exchange Clearing House Pty Ltd;

  5. (e)

    a body that is an approved foreign exchange within the meaning of regulation 1.2A.02 of the Corporations Regulations;

  6. (f)

    a body specified in Schedule 11 of the Corporations Regulations;

  7. (g)

    a body that performs clearing house functions in relation to a body mentioned in paragraph (e) or (f) (the second body) in accordance with the rules of the second body or a law of the country where the second body is situated.

derivative means a financial asset or liability the value of which depends on, or is derived from, other assets, liabilities or indices.

derivatives contract means an option contract or futures contract relating to any right, liability or thing, including in particular:

  1. (a)

    an option contract as defined in section 9 of the Corporations Law; and

  2. (b)

    a futures contract within the meaning of section 72 of the Corporations Law; and

  3. (c)

    an agreement to which section 72A or 92A of the Corporations Law applies.”.

20.   Schedule 1AA (Part 1—Exempt public sector superannuation schemes (1994-95 and 1995-96 years of income))

20.1   Omit “Schemes established by or under:” (wherever occurring), substitute “Schemes established by or operated under:”.

20.2   Under the heading “COMMONWEALTH”,insert the following Act:

“Defence Act 1903”.

21.   Schedule 1AA (Part 2—Exempt public sector superannuation schemes (1996-97 year of income and subsequent years of income))

21.1   Omit the Part, substitute:

“PART 2—EXEMPT PUBLIC SECTOR SUPERANNUATION SCHEMES (1996-97 YEAR OF INCOME)

COMMONWEALTH

Schemes established by or operated under:

Defence Act 1903

Defence Force Retirement and Death Benefits Act 1973

Governor-General Act 1974

Judges’ Pensions Act 1968

Parliamentary Contributory Superannuation Act 1948

NEW SOUTH WALES

Schemes established by or operated under:

First State Superannuation Act 1992

Judges’ Pensions Act 1953

Local Government and Other Authorities (Superannuation) Act 1927

New South Wales Retirement Benefits Act 1972

Parliamentary Contributory Superannuation Act 1971

Police Regulation (Superannuation) Act 1906

Public Authorities Superannuation Act 1985

Public Sector Executives Superannuation Act 1989

State Authorities Non-contributory Superannuation Act 1987

State Authorities Superannuation Act 1987

State Public Service Superannuation Act 1985

Superannuation Act 1916

Superannuation Administration Act 1996

Transport Employees Retirement Benefits Act 1967

VICTORIA

Schemes established by or operated under:

Attorney General and Solicitor General Act 1972

Coal Mines (Pensions) Act 1958

Constitution Act 1975

County Court Act 1958

County Court (Jurisdictions) Act 1968

Emergency Services Superannuation Act 1986

Hospitals Superannuation Act 1988

Justices Act 1958

Local Authorities Superannuation Act 1988

Magistrates (Summary Proceedings) Act 1975

Mint Act 1958

Ombudsman Act 1973

Parliamentary Salaries and Superannuation Act 1968

Port of Geelong Authority Act 1958

Port of Melbourne Authority Act 1958

Public Prosecutions Act 1994

Public Sector Superannuation (Administration) Act 1993

State Superannuation Act 1988

Supreme Court Act 1986

QUEENSLAND

Government Officers’ Superannuation Scheme (GoSuper)

Governors’ Pension Scheme

Judges Pension Scheme

Parliamentary Contributory Superannuation Fund

Police Superannuation Fund (Police Super)

Queensland Fire Service Superannuation Plan

State Public Sector Superannuation Scheme (Q Super)

State Service Superannuation Fund (State Super)

SOUTH AUSTRALIA

Schemes established by or operated under:

Electricity Corporations Act 1994

Governors’ Pensions Act 1976

Judges’ Pensions Act 1971

Parliamentary Superannuation Act 1974

Police Superannuation Act 1990

Southern State Superannuation Act 1994

Superannuation Act 1988

Superannuation (Benefit Scheme) Act 1992

Schemes established by or under trust deeds

Lyell McEwen Health Service Incorporated Superannuation Fund

Police Occupational Superannuation Scheme

WESTERN AUSTRALIA

Schemes established by or operated under:

Government Employees Superannuation Act 1987

Judges’ Salaries and Pensions Act 1950

Parliamentary Superannuation Act 1970

Superannuation and Family Benefits Act 1938

TASMANIA

Schemes established by or operated under:

Governor of Tasmania Act 1982

Judges’ Contributory Pensions Act 1968

Parliamentary Retiring Benefits Act 1985

Parliamentary Superannuation Act 1973

Retirement Benefits Act 1993

Solicitor-General Act 1983

AUSTRALIAN CAPITAL TERRITORY

Schemes established by or operated under:

Superannuation (Legislative Assembly Members) Act 1991

NORTHERN TERRITORY

Schemes established by or operated under:

Administrators Pension Act 1981

Legislative Assembly Members’ Superannuation Act 1979

Superannuation Act 1986

Supreme Court (Judges Pensions) Act 1980

Other schemes

Northern Territory Police Supplementary Benefit Scheme

Northern Territory Supplementary Superannuation Scheme

“PART 3—EXEMPT PUBLIC SECTOR SUPERANNUATION SCHEMES (1997-98 YEAR OF INCOME AND SUBSEQUENT YEARS OF INCOME)

COMMONWEALTH

Schemes established by or operated under:

Defence Act 1903

Defence Force Retirement and Death Benefits Act 1973

Governor-General Act 1974

Judges’ Pensions Act 1968

Parliamentary Contributory Superannuation Act 1948

NEW SOUTH WALES

Schemes established by or operated under:

First State Superannuation Act 1992

Judges’ Pensions Act 1953

Local Government and Other Authorities (Superannuation) Act 1927

New South Wales Retirement Benefits Act 1972

Parliamentary Contributory Superannuation Act 1971

Police Regulation (Superannuation) Act 1906

Public Authorities Superannuation Act 1985

Public Sector Executives Superannuation Act 1989

State Authorities Non-contributory Superannuation Act 1987

State Authorities Superannuation Act 1987

State Public Service Superannuation Act 1985

Superannuation Act 1916

Superannuation Administration Act 1996

Transport Employees Retirement Benefits Act 1967

VICTORIA

Schemes established by or operated under:

Attorney General and Solicitor General Act 1972

Coal Mines (Pensions) Act 1958

Constitution Act 1975

County Court Act 1958

County Court (Jurisdictions) Act 1968

Emergency Services Superannuation Act 1986

Hospitals Superannuation Act 1988

Justices Act 1958

Local Authorities Superannuation Act 1988

Magistrates (Summary Proceedings) Act 1975

Mint Act 1958

Ombudsman Act 1973

Parliamentary Salaries and Superannuation Act 1968

Public Prosecutions Act 1994

Public Sector Superannuation (Administration) Act 1993

State Superannuation Act 1988

Supreme Court Act 1986

QUEENSLAND

Governors’ Pension Scheme

Judges Pension Scheme

Parliamentary Contributory Superannuation Fund

State Public Sector Superannuation Scheme (Q Super)

SOUTH AUSTRALIA

Schemes established by or operated under:

Electricity Corporations Act 1994

Governors’ Pensions Act 1976

Judges’ Pensions Act 1971

Parliamentary Superannuation Act 1974

Police Superannuation Act 1990

Southern State Superannuation Act 1994

Superannuation Act 1988

Superannuation (Benefit Scheme) Act 1992

Schemes established by or under trust deeds

Lyell McEwen Health Service Incorporated Superannuation Fund

Police Occupational Superannuation Scheme

WESTERN AUSTRALIA

Schemes established by or operated under:

Government Employees Superannuation Act 1987

Judges’ Salaries and Pensions Act 1950

Parliamentary Superannuation Act 1970

Superannuation and Family Benefits Act 1938

TASMANIA

Schemes established by or operated under:

Governor of Tasmania Act 1982

Judges’ Contributory Pensions Act 1968

Parliamentary Retiring Benefits Act 1985

Parliamentary Superannuation Act 1973

Retirement Benefits Act 1993

Solicitor-General Act 1983

AUSTRALIAN CAPITAL TERRITORY

Schemes established by or operated under:

Superannuation (Legislative Assembly Members) Act 1991

NORTHERN TERRITORY

Schemes established by or operated under:

Administrators Pension Act 1981

Legislative Assembly Members’ Superannuation Act 1979

Superannuation Act 1986

Supreme Court (Judges Pensions) Act 1980

Other schemes

Northern Territory Police Supplementary Benefit Scheme

Northern Territory Supplementary Superannuation Scheme”.

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 5 May 1998.

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, 293, 309, 343 and 415; 1998 No. 76.

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