EXPLANATORY STATEMENT
STATUTORY RULES NO. 149 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 (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 193 6.
Section 22 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
PURPOSE OF THE REGULATIONS
The main purpose of the regulations is:
(i) to extend the deadline of 30 June 1990 contained in Regulations 18 and 23 of the Occupational Superannuation Standards Regulations (the Regulations), by which the trustees of superannuation funds and approved deposit funds must include (or include a provision which deems to include) the applicable operating standards in their trust deeds; and
(ii) to prescribe a time frame within which changes to existing standards, or standards that may be introduced in the future, must be included in the trust deeds or be deemed to be included in the trust deeds.
At the same time, the opportunity is being taken to replace the words ‘trust deed’ in the Regulations with the words ‘governing rules’, consistent with changes made to the Act in 1989.
The decision to extend the deadline follows representations from the superannuation industry to the effect that many fund trustees had delayed amending their deeds because of the costs involved and because of the likely need for further amendments as a result of announced changes to the standards. The decision takes into account consultations between the Insurance and Superannuation Commission (ISC) and the Law Council of Australia on the matter.
The regulations allow fund trustees until 15 December 1990, or the day they submit their annual return to the ISC for the year ending on 30 June 1990, whichever is the earlier, to include (or include a provision which deems to include) the relevant operating standards which were in effect on 1 January 1990 in the fund governing rules.
In addition, where amendments are made to standards which were in effect on 1 January 1990, or where new standards are introduced, trustees will have a period of not less than 18 months to include the amendments or new standards in the governing rules.
The amendment to substitute the words ‘governing rules’ for the words ‘trust deed’ is related to other amendments to the Act and Regulations to extend the operating standards to public sector funds. While private sector funds are constituted under trust deed arrangements, it is necessary for the regulations to now have regard to the fact that public sector funds may be constituted under a wider range of arrangements, eg specific legislative arrangements.
Details of the regulations are as follows:
The regulations repeal existing regulations 18 and 23, which deal with matters to be included in the trust deeds of superannuation funds and approved deposit funds respectively, and substitute new Regulations 18 and 23 in their place.
Subregulation (1) of the new regulations 18 and 23 provides that, for the purposes of subsections 7(1) and 8(1) of the Act, the standards in subregulations (2), (3) and (4) are prescribed.
Subregulation (2) of the new regulations 18 and 23 provides that the governing rules of a fund must include (or include a provision which deems to include) the applicable operating standards in effect on 1 January 1990 by 15 December 1990, or the day the trustees of that fund submit a return in respect of the year of income ending on 30 June 1990 to the ISC, whichever is the earlier.
Subregulation (3) of the new regulations 18 and 2 3 provides that where the governing rules of a fund which was established on or before 30 June 1990 do not include the applicable operating standards in effect on 1 January 1990, the trustees must have made arrangements in writing before 30 June 1990 for the standards to be included (or for a provision which deems them to be included) in those governing rules. In addition, if required by the Insurance and Superannuation Commissioner, trustees must provide documentary evidence which satisfies the Commissioner that they have made such arrangements.
Subregulation (4) of the new Regulations 18 and 23 provides that where amendments are made to applicable operating standards after 1 January 1990, or where new standards are introduced, the governing rules of a fund must include (or include a provision which deems to include) those amendments or new standards within a period of not less than 18 months after the end of the year in which the amendments or standards commenced, or were notified in the Gazette, whichever is the later.
DATE OF OPERATION
The regulations are effective from the date of Gazettal.