EXPLANATORY STATEMENT
STATUTORY RULES NO 281 1989
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) contains provisions concerned with operating standards and other relevant conditions with which superannuation funds are required to comply in order to be eligible to receive taxation concessions under the Income Tax Assessment Act 1936.
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.
BACKGROUND
The Occupational Superannuation Standards Act 1987 provides that the Insurance and Superannuation Commissioner shall give a notice in writing to the trustees of a superannuation fund stating whether the Commissioner is satisfied that the fund has satisfied the prescribed superannuation fund conditions in relation to a particular year of income, after having had regard to, inter alia, the fund’s annual return and certain prescribed certificates required by the Act.
One such certificate is a certificate by an approved auditor. The Occupational Superannuation Standards Regulations, which prescribe standards applicable to the operation of superannuation funds, prescribe the form of this certificate by providing for it to be in accordance with Form 2 in the Schedule to the Regulations. The main purpose of the audit certificate is to provide an opinion by an independent auditor as to whether the fund has complied with the standards during the relevant year of income.
Form 2 was revised in 1988 to take account of suggestions put forward by the accounting profession. The revised Form allows more flexibility in that it permits auditors to:
• refer to any qualification of the audited accounts and records of the fund; and
• qualify an opinion about the fund’s compliance with the standards at all times during the relevant year.
The amendment to Form 2 was made after the annual return form for the year of income 1986-87 had been issued to superannuation funds. Notwithstanding extensive publicity, it would appear that many auditors were not aware of the change to Form 2. This is evident from the fact that since the change the Insurance and Superannuation Commission has received many thousands of annual returns for the year of income 1986-87 with approved auditors’ certificates in accordance with Form 2 as in force before the change.
It is considered that these auditors’ certificates, which are in accordance with the previous Form 2, should be accepted as an alternative to certificates prepared in accordance with the present Form 2. The basis for this view is that the previous Form 2 was revised solely in order to overcome a number of difficulties experienced by certain auditors with that form.
Such a course of action would avoid the need to return the certificates to trustees of superannuation funds for amendment and thus avoid unnecessary additional processing costs to both superannuation funds and the Government.
It is felt, however, that the option to use either the present Form 2 or the previous Form 2 should be limited to approved auditors’ certificates in respect of the year of income 1986-87. The present Form 2 is incorporated in the returns for later years.
The regulation amends Statutory Rules 1988 No 255, so that an approved auditor’s certificate in accordance with Form 2 as in force immediately before 21 October 1988 continues, for the purposes of subparagraph 12(1)(a)(iii) of the Act, to be an approved auditor’s certificate in the prescribed form in respect of the year of income 1986-87.
Details of the regulation are as follows:
The regulation amends Statutory Rules 1988 No 255 which were notified in the Gazette on 21 October 1988 and contained a regulation substituting new Forms 2 and 3 for the then existing Forms 2 and 3 in the Schedule to the Occupational Superannuation Standards Regulations.
It amends those Statutory Rules by adding at the end of those Rules a regulation which provides that, notwithstanding its substitution, and without prejudice to the operation of new Form 2, an approved auditor’s certificate in accordance with Form 2 as in force immediately before 21 October 1988 continues, for the purposes of subparagraph 12(1)(a)(iii) of the Occupational Superannuation Standards Act, to be a certificate in the prescribed form in respect of the year of income 1986-87.
The regulation is effective from the date of Gazettal.