Occupational Superannuation Standards Regulations (Amendment)

Administered by Department of the Treasury

Legislation au F1996B01646 Regulations Not in force Legislative Instrument

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Occupational Superannuation Standards Regulations (Amendment) 1991 No. 150

EXPLANATORY STATEMENT

Statutory Rules 1991 No. 150

ISSUED BY AUTHORITY OF THE TREASURER

OCCUPATIONAL SUPERANNUATION STANDARDS ACT 1987

OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT)

LEGISLATIVE BASIS FOR THE REGULATIONS

Section 22 of the Occupational Superannuation Standards Act 1987 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

BACKGROUND

The Act provides operating standards and other relevant conditions with which superannuation funds, approved deposit funds and pooled superannuation trusts are required to comply in order to be eligible for taxation concessions under the Income Tax Assessment Act 1936.

The Regulations amend the Occupational Superannuation Standards Regulations (the Principal Regulations) to give effect to changes to the operating standards recently announced by the Government. The background to those changes is given below.

The amendments were developed in consultation with representatives of the superannuation industry, and related professional organisations.

DETAILS OF THE REGULATIONS

Regulation 1 provides that subregulation 5.2 operates from 2 July 1990 to correct an anomaly created by an earlier amendment; subregulations 3.1, 3.5, 3.6, 5.1, 5.3, 5.4, and 5.5 take effect from 1 July 1991 (since it is administratively desirable if the provisions apply for a full financial year); the remainder of the proposed regulations are effective from the date of gazettal.

Regulation 2 is a formal provision.

Regulation 3 amends existing regulation 3 by inserting a number of new definitions in the Principal Regulations and by making several grammatical changes.

Regulation 4 amends existing subregulations 5AC(2), (3) and (4) to make it clear that, where a benefit becomes payable in accordance with the provisions of the Principal Regulations, if it is a lump sum benefit it may or must be paid in full, and if it is a pension benefit it may or must commence to be paid. It also amends subregulation 5AC(3) to extend the transitional provisions applying to members of funds established under former paragraph 23 (ja) of the Income Tax Assessment Act 1936 to all persons who are members of such funds as at 1 July 1991.

Regulation 5 amends regulation 9 so that the application of the preservation requirement to member-financed benefits is made clear. The regulation:

•       provides that benefits arising from contributions made by a member to a fund during any period in which the member did not have employer support in the fund are preservable if that period commenced on or after 13 March 1989 (if the fund is a private sector fund) or on or after 1 July 1990 (if the fund is a public sector fund);

•       provides that from 2 July 1990 where the only employer support that a member of a fund has in that fund is award superannuation, and the member has other, non-award support in another fund which is not an eligible scheme, preservation does not apply to the benefits arising from the member's contributions. This amendment would operate with retrospective effect to overcome an unintended effect caused by a previous amendment. The amendment would have the effect of not requiring the preservation of certain benefits which were previously required to be preserved. The amendment is not detrimental to any person;

•       inserts a definition of a member having employer support in a fund during a period to mean that, during that period, the person acquired an entitlement or a potential entitlement to receive employer financed benefits from the fund other than those arising from award superannuation contributions;

•       defines "potential entitlement" as meaning an entitlement to benefits which only vest in the member on the occurrence of an event specified in the governing rules of a fund;

•       amends existing subregulation 9(2) to refer to both subregulations 9(3) and 9(4). The current reference is only to subregulation 9(3); and

•       replaces existing subregulation 9(4) to require that all benefits arising from contributions made by a member to an eligible scheme must be preserved.

Regulation 6 amends existing regulation 13 to remove the references to establishment dates of funds, so that the regulation applies to all large funds. The proposed regulation also clarifies the application of the equal trustee representation requirement to cases where a body corporate acts as sole trustee of a large superannuation fund, and introduces a transitional arrangement for the period before 1 July 1995, which in effect provides for the continuation of current requirements until that date.

 

Overview

The Occupational Superannuation Standards Regulations (Amendment) 1991 No. 150 was enacted to address gaps and inconsistencies within the existing regulatory framework for occupational superannuation funds in Australia. This regulatory amendment was introduced under the authority of the Occupational Superannuation Standards Act 1987, which was itself designed to establish operating standards for superannuation funds to be eligible for tax concessions. The objective of these amendments was to refine and update the regulatory environment, ensuring it remains aligned with the evolving needs of the superannuation industry and to rectify anomalies that had arisen from previous legislative changes. The amendments were developed in close consultation with industry representatives and professional organisations, reflecting a collaborative approach to regulatory reform. The intent behind these amendments is to clarify and enhance the regulatory oversight of superannuation funds, ensuring they operate within a framework that supports the preservation and proper administration of superannuation benefits for members.

Scope and Application

The Occupational Superannuation Standards Regulations (Amendment) 1991 No. 150 applies to superannuation funds, approved deposit funds, and pooled superannuation trusts, aiming to ensure these entities comply with operating standards to be eligible for taxation concessions under the Income Tax Assessment Act 1936. These regulations amend the Occupational Superannuation Standards Regulations to reflect recent government changes and are applicable across Australia, aligning with the requirements set out in the Occupational Superannuation Standards Act 1987. The regulations cover various aspects such as the preservation of benefits, trustee representation, and transitional provisions for specific dates. Subregulations 3.1, 3.5, 3.6, 5.1, 5.3, 5.4, and 5.5 take effect from 1 July 1991, while other provisions are effective from the date of gazettal. Regulation 6 removes references to the establishment dates of funds, ensuring the equal trustee representation requirement applies to all large funds and introduces a transitional arrangement until 1 July 1995.

Key Provisions

The Occupational Superannuation Standards Regulations (Amendment) 1991 No. 150 sets out amendments to the Occupational Superannuation Standards Regulations 1987. The key provisions of these regulations, referenced in paragraphs 1-5, primarily aim to correct anomalies and clarify certain provisions within the existing regulations. For example, Regulation 1 specifies the effective dates for various subregulations, ensuring they apply from either 2 July 1990 or 1 July 1991, to align with financial years and correct prior errors. Regulation 3 introduces new definitions and grammatical changes to existing regulations, enhancing clarity and precision in the language used. The regulations impose several obligations on the entities governed by them, particularly superannuation funds, approved deposit funds, and pooled superannuation trusts. These entities must comply with the new and amended provisions to maintain their eligibility for taxation concessions. For instance, Regulation 4 clarifies the conditions under which benefits can be paid out, distinguishing between lump sum benefits and pension benefits. It also extends transitional provisions to include all members of funds established under former provisions of the Income Tax Assessment Act 1936 as of 1 July 1991. Regulation 5 makes clear the preservation requirements for member-financed benefits, ensuring that benefits arising from contributions made by members during periods without employer support are preservable under certain conditions. The amendments introduce specific offences and penalties for non-compliance with the regulations. Regulation 6 removes references to the establishment dates of funds, ensuring the equal trustee representation requirement applies to all large funds. Non-compliance with these regulations could potentially lead to civil or criminal consequences, although the specific penalties are not detailed within the explanatory statement. However, given the context of maintaining eligibility for taxation concessions, severe breaches could result in the loss of these concessions, thereby imposing a significant financial penalty on non-compliant entities.

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Area of Law
Superannuation
Instrument
Regulation
Concepts
Definitions & Interpretation
Transitional Provisions
Compliance Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.