EXPLANATORY STATEMENT
STATUTORY RULES NO 185 1990
ISSUED BY AUTHORITY OF THE TREASURER
OCCUPATIONAL SUPERANNUATION STANDARDS ACT 1987
OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT)
LEGISLATIVE BASIS FOR THE REGULATIONS
The Occupational Superannuation Standards Act 1987 (OSS 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 (Tax Act).
Section 22 of the OSS Act provides that the Governor-General may make regulations, not inconsistent with that Act, prescribing matters required or permitted by it to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to it.
PURPOSE OF THE REGULATIONS
The main purpose of the regulations is to relocate in the Occupational Superannuation Standards Regulations relevant provisions of former paragraph 23(ja) and former sections 23F, 23FB and 121C of the Tax Act. These provisions, with which superannuation funds have to comply in order to be eligible for taxation concessions, were repealed from the Tax Act in 1987, but continue in force on an interim basis by virtue of sections 5 and 15A of the OSS Act.
The regulations are also to give effect to the 1989-90 Budget decision to allow members of the workforce working as few as 10 hours a week to contribute to superannuation funds, and to allow members of funds to continue to contribute to their funds for up to 2 years while outside the paid workforce.
Details of the regulations are:
REGULATION 1 - This regulation specifies the dates of commencement of the regulations.
REGULATION 2 - This regulation defines the Occupational Superannuation Standards Regulations as the ‘Principal Regulations’.
REGULATION 3 - This regulation amends Regulation 3 of the Principal Regulations to define a number of new terms.
REGULATION 4 - This regulation inserts new Regulations 5AA, 5AB and 5AC which prescribe operational standards relating to the acceptance of contributions, payment of benefits, and ages for payment of benefits into the Principal Regulations. These standards are based on relevant provisions previously contained in paragraph 23(ja) and sections 23F and 23FB of the Tax Act.
REGULATION 5 - This regulation amends Regulation 9 of the Principal Regulations -
• to clarify the provisions of paragraph (c) of that Regulation regarding preservation of benefits arising from a member’s own contributions; and
• to introduce a new standard which provides for the continued preservation of benefits arising from funds of the kinds referred to in paragraph 23(ja) and section 23FB of the Tax Act.
REGULATION 6 - This regulation amends Regulation 11 of the Principal Regulations by adding the age criteria referred to in new Regulation 5AC (see regulation 4 above) to the list of prescribed circumstances in which benefits become payable.
REGULATION 7 - This regulation amends Regulation 12 of the Principal Regulations to clarify that the preservation standards prescribed in Regulations 9, 10, and 11 do not apply where the total amount of benefits due to a member of a superannuation fund do not exceed $500.
REGULATION 8 - This regulation amends Regulation 16 of the Principal Regulations in order to facilitate the introduction of an investment standard relating specifically to in-house assets (see regulation 9 below).
REGULATION 9 - This regulation inserts a new Regulation 16A, prescribing an investment standard relating to in-house assets which applies not only to private sector funds but also to public sector funds, into the Principal Regulations. The provisions of this new regulation are derived from the provisions of former section 121C of the Tax Act.
REGULATION 10 - This regulation inserts a new Regulation 17A prescribing a new standard relating to forfeited benefits of members of superannuation funds into the Principal Regulations. The provisions of this new regulation are based on relevant provisions of former sections 23F and 23FB of the Tax Act.
DATE OF OPERATION
The regulations (with the exception of regulation 2 and paragraph (a) of regulation 5) have effect from 1 July 1990. Regulation 2 has effect from the date of Gazettal and paragraph (a) of regulation 5 has effect from 2 July 1990.