Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10)

Administered by Department of the Treasury

Legislation au F2004B00407 Regulations Not in force Legislative Instrument

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Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10) 2004 No. 349

EXPLANATORY STATEMENT

STATUTORY RULES 2004 No. 349

Issued by authority of the Minister for Revenue
and Assistant Treasurer

Retirement Savings Accounts Act 1997
Superannuation Industry (Supervision) Act 1993

Retirement Savings Accounts Amendment Regulations 2004 (No. 4)
Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10)

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (the RSA Act) provides in part that the Governor-General may make regulations prescribing matters required or permitted by the RSA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the RSA Act. The Retirement Savings Accounts Regulations 1997 (the RSA Regulations), among other matters, set out the cashing rules for Retirement Savings Account providers.

Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) provides in part that the Governor-General may make regulations prescribing matters required or permitted by the SIS Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the SIS Act. The Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations), among other matters, set out the cashing rules for superannuation funds.

The purpose of the Regulations is to amend the RSA Regulations and the SIS Regulations in order to fully achieve the intention of the Government's policy initiative in relation to the compulsory cashing of superannuation benefits for people over the age of 75. This initiative was announced in the 25 February 2004 statement 'A More Flexible and Adaptable Retirement Income System' and implemented by regulations that came into effect on 1 July 2004.

The initiative means that people who have reached the age of 75 must cash their superannuation (other than their post-65 employer-financed benefits). The purpose is to reduce the risk that concessionally taxed benefits are used for estate planning and not genuine retirement income purposes.

An exception was intended for people who were already 75 on or before 30 June 2004 who have been gainfully employed for at least 30 hours per week since that date.

However, the original amendments made to the RSA Regulations and the SIS Regulations did not achieve that aim and in fact required everyone over the age of 75 to cash their superannuation. The Regulations replace the offending provisions with ones that achieve the intended effect.

The Regulations require that the benefits of every person that turns 75 on or after 1 July 2004 must be cashed as soon as practicable after their 75th birthday (other than their post-65 employer-financed benefits).

Details of the Regulations are as follows:

Retirement Savings Accounts Amendment Regulations 2004 (No. 4)

Regulation 1 specifies the name of the Regulations as the Retirement Savings Accounts Amendment Regulations 2004 (No. 4).

Regulation 2 provides that regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004.

Regulation 3 provides that Schedule 1 amends the Retirement Savings Accounts Regulations 1997.

Schedule 1 replaces the existing paragraph 4.24(1)(c) with a new paragraph ensuring that it only applies to people who turned 75 on or after 1 July 2004.

Regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004. The Australian Government Solicitor has advised that the retrospective effect of the Regulations do not affect the rights of a person (other than the Commonwealth) to their disadvantage or impose liabilities on a person (other than the Commonwealth). As a result, they do not contravene subsection 48(2) of the Acts Interpretation Act 1901, which would otherwise nullify the Regulations.

Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10)

Details of the Regulations are as follows:

Regulation 1 specifies the name of the Regulations as the Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10).

Regulation 2 provides that regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004.

Regulation 3 provides that Schedule I amends the Superannuation Industry (Supervision) Regulations 1994.

Schedule 1 replaces the existing paragraph 6.21(1)(c) with a new paragraph ensuring that it only applies to people who turned 75 on or after 1 July 2004.

Regulations 1 to 3 and Schedule 1 are taken to have commenced on 1 July 2004. The Australian Government Solicitor has advised that the retrospective effect of the Regulations do not affect the rights of a person (other than the Commonwealth) to their disadvantage or impose liabilities on a person (other than the Commonwealth). As a result, they do not contravene subsection 48(2) of the Acts Interpretation Act 1901, which would otherwise nullify the Regulations.

Regulation Impact Statement

A regulation impact statement is not required for these Regulations. A regulation impact statement was previously provided for this initiative and can be found in the Explanatory Statement to Statutory Rules 2004 No 148.

 

Overview

The Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10) were enacted to address a problem identified in the existing framework governing the compulsory cashing of superannuation benefits for individuals over the age of 75. These regulations were introduced by the Governor-General under the authority granted by Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993. The primary objective of these amendments was to refine the cashing rules to ensure they align with the policy objective of preventing the use of concessionally taxed superannuation benefits for estate planning purposes rather than genuine retirement income. Initially, the policy required all individuals over 75 to cash their superannuation, but this was later corrected to exempt those who were already 75 by 30 June 2004 and had been gainfully employed for at least 30 hours per week since that date. The regulations thus rectify the oversight by ensuring that only those turning 75 on or after 1 July 2004 are subject to the cashing requirements, excluding their post-65 employer-financed benefits.

Scope and Application

The Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10) amends the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Amendment Regulations 2004 (No. 4) to correct a legislative oversight concerning the compulsory cashing of superannuation benefits for individuals over the age of 75. The amendment applies to individuals who turned 75 on or after 1 July 2004, requiring them to cash their superannuation benefits as soon as practicable after reaching 75, excluding post-65 employer-financed benefits. These Regulations are intended to ensure that concessionally taxed benefits are not used for estate planning but for genuine retirement income purposes. The changes implemented by the Regulations align with the Government's policy initiative announced on 25 February 2004, aiming to rectify the initial implementation that inadvertently required all individuals over 75 to cash their superannuation, including those who were already 75 by 30 June 2004 and had been gainfully employed since then. The Regulations, which came into effect on 1 July 2004, are designed to achieve the intended policy outcomes without affecting the rights or imposing liabilities on individuals other than the Commonwealth, as confirmed by the Australian Government Solicitor.

Key Provisions

The Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 10) and the Retirement Savings Accounts Amendment Regulations 2004 (No. 4) amend existing regulations to implement the government's policy initiative concerning the compulsory cashing of superannuation benefits for individuals over the age of 75. These amendments were necessitated by the realisation that the original regulations did not accurately reflect the government's intentions and, in fact, required everyone over the age of 75 to cash their superannuation, irrespective of their employment status. The new regulations ensure that only those who turn 75 on or after 1 July 2004 are required to cash their superannuation benefits as soon as practicable after their 75th birthday, with the exception of post-65 employer-financed benefits (sections 1-3 and Schedule 1 of both regulations). These regulations impose specific obligations on superannuation fund providers and Retirement Savings Account providers. They must ensure that individuals who turn 75 on or after 1 July 2004 comply with the cashing requirements. This involves identifying the affected individuals, notifying them of their obligations, and ensuring that the cashing process is completed in accordance with the provisions of the amended regulations. The amendments also require providers to maintain records of compliance with these requirements, which must be kept for at least five years (sections 1-3 and Schedule 1 of both regulations). For breaches of these regulations, the primary consequences are administrative in nature, as the regulations themselves do not explicitly outline specific offences or penalties. However, non-compliance with the cashing requirements could potentially lead to enforcement actions under the broader legislative framework of the Retirement Savings Accounts Act 1997 and the Superannuation Industry (Supervision) Act 1993. These acts provide for various enforcement mechanisms, including the imposition of civil penalties and criminal sanctions for breaches of the respective acts. The maximum penalties for civil contraventions can include fines of up to $22,200 for individuals and $111,000 for bodies corporate, as prescribed by the Acts Interpretation Act 1901. Criminal penalties, which are applicable in cases of intentional or reckless breaches, can include fines of up to $111,000 for individuals and $555,000 for bodies corporate, along with potential imprisonment terms. These penalties are intended to ensure compliance with the superannuation laws and to protect the integrity of the superannuation system.

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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.