Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3)

Administered by Department of the Treasury

Legislation au F2010L02058 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Select Legislative Instrument 2010 No. 237

Issued by the authority of the Minister for Financial Services, Superannuation and Corporate Law

                Superannuation Industry (Supervision) Act 1993

     Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3)

     Retirement Savings Accounts Act 1997

     Retirement Savings Accounts Amendment Regulations 2010 (No. 3)

Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (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.

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (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 Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) require that a minimum payment be made from a superannuation account-based pension at least annually. Minimum payments are determined by age and the value of the account balance at 1 July of each year. The minimum annual payment rule is designed so that retirees draw down on their superannuation capital over their retirement. This rule recognises that superannuation is a retirement savings vehicle with substantial tax concessions.

The purpose of the Regulations is to give effect to the Government’s announced measure to reduce the minimum payment amounts for account-based pensions for the 2010‑11 financial year.  This extends the pension drawdown relief provided in respect of the 2008-09 and 2009-10 financial years.

The reduction in the minimum payment amounts for 2010-11 applies to account-based annuities and pensions, allocated annuities and pensions, and market-linked annuities and pensions.

This measure is designed to assist pension account balances to recover from capital losses associated with the global financial crisis. It will benefit holders of account-based pensions by reducing the need to sell assets at a loss in order to satisfy the minimum payment requirement for 2010-11.

The SIS Regulations, inter alia, contain the payment rules for annuities and pensions, including those products in relation to which there is an account balance attributable to the recipient.  The Retirement Savings Accounts Regulations 1997 (RSA Regulations) contain parallel payment rules for pensions payable from Retirement Savings Accounts. 

The Regulations halve the minimum annual payment amounts for account‑based, allocated and market-linked annuities and pensions, and for pensions payable from Retirement Savings Accounts, for the 2010-11 financial year.


Details of the amendments to the SIS Regulations are set out in Attachment A and details of the amendments to the RSA Regulations are set out in Attachment B.

The SIS Act and the RSA Act specify no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.

The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.

Given the straightforward nature of the Regulations no public consultation was undertaken.

Authority: Subsection 353(1) of the  Superannuation Industry               (Supervision) Act 1993.

 Subsection 200(1) of the  Retirement Savings Accounts               Act 1997.


ATTACHMENT A

Details of Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3)

Regulation 1 specifies the name of the Regulations as the Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3).

Regulation 2 provides that the Regulations commence on the day after registration.

Regulation 3 provides that Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations).

Schedule 1 Amendments

Items 1 and 2

Schedules 1A and 1AAB to the SIS Regulations set out the method for calculating the minimum and maximum payment limits for allocated pensions (and for the equivalent annuity product).  Clause 2 in each of these Schedules sets out the method for calculating the minimum payment limits. 

Clause 3A in each of Schedules 1A and 1AAB provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, the minimum payment limit is half the amount worked out using the formula in clause 2. Items 1 and 2 amend clause 3A in each of these Schedules so that it also applies to the financial year commencing on 1 July 2010. 

Item 3

Schedule 6 to the SIS Regulations contains the payment rules for market‑linked income streams. Clause 1 of Schedule 6 sets out the formula for determining the annual payment amount for a market‑linked income stream.

Clause 10 of Schedule 6 provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, an amount is taken to have been determined in accordance with clause 1 if it is not less than 45 per cent of the amount determined in accordance with clause 1, and not greater than 110 per cent of the amount determined in accordance with clause 1. Item 3 amends clause 10 so that it also applies to the financial year commencing on 1 July 2010.

Item 4

Schedule 7 to the SIS Regulations contains the rules for calculating the minimum payment amount for a superannuation income stream. The method for calculating the minimum payment amount for an account-based pension (and for the equivalent annuity product) is set out in clause 1 of Schedule 7.    

Clause 4A of Schedule 7 provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, the minimum payment amount is half the amount worked out using the formula in clause 1.  Item 4 amends clause 4A so that it also applies to the financial year commencing on 1 July 2010.


ATTACHMENT B

Details of Retirement Savings Accounts Amendment Regulations 2010 (No. 3)

Regulation 1 specifies the name of the Regulations as the Retirement Savings Accounts Amendment Regulations 2010 (No. 3). 

Regulation 2 provides that the Regulations commence on the day after registration.

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

Schedule 1 Amendments

Items 1 and 2

Schedules 1 and 1A to the RSA Regulations set out the method for calculating the minimum and maximum payment limits for allocated pensions paid from retirement savings accounts. Clause 2 in each of these Schedules sets out the method for calculating the minimum payment limits.  

Clause 3A in each of Schedules 1 and 1A provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, the minimum payment limit is half the amount worked out using the formula in clause 2. Items 1 and 2 amend clause 3A in each of these Schedules so that it also applies to the financial year commencing on 1 July 2010. 

Item 3

Schedule 4 to the RSA Regulations contains the rules for calculating the annual payment amounts for market‑linked pensions. The formula for determining the annual payment amount is set out in clause 1 of Schedule 4.

Clause 10 of Schedule 4 provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, an amount is taken to have been determined in accordance with clause 1 if it is not less than 45 per cent of the amount determined in accordance with clause 1, and not greater than 110 per cent of the amount determined in accordance with clause 1. Item 3 amends clause 10 so that it also applies to the financial year commencing on 1 July 2010.

Item 4

Schedule 5 to the RSA Regulations contains the rules for calculating the minimum payment amount for an account‑based pension. The method for calculating the minimum payment amount is set out in clause 1 of Schedule 5.    

Clause 3A of Schedule 5 provides that, for the financial years commencing on 1 July 2008 and 1 July 2009, the minimum payment amount is half the amount worked out using the formula in clause 1.  Item 4 amends clause 3A so that it also applies to the financial year commencing on 1 July 2010.

 

Overview

The Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3) and the Retirement Savings Accounts Amendment Regulations 2010 (No. 3) were introduced to address the economic impact of the global financial crisis on superannuation account holders, particularly those with account-based pensions. These regulations amend the existing Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Regulations 1997 under the authority of the Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 respectively. The policy objective is to provide temporary relief by reducing the minimum payment amounts required from superannuation accounts for the 2010-11 financial year. This measure extends the pension drawdown relief that was initially introduced for the 2008-09 and 2009-10 financial years. The reduced minimum payments aim to assist account holders in recovering from capital losses by reducing the necessity to sell assets at a loss to meet the minimum payment requirements.

Scope and Application

The Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3) and the Retirement Savings Accounts Amendment Regulations 2010 (No. 3) apply to superannuation funds, trustees, account holders, and other entities involved in the administration and management of superannuation and retirement savings accounts in Australia. These regulations are made under the authority of the Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997, respectively, and they modify the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Regulations 1997. The purpose of these amendments is to reduce the minimum payment amounts for account-based pensions, allocated pensions, and market-linked pensions for the 2010-11 financial year, thereby providing relief to pension account holders affected by the global financial crisis. These regulations have a national reach, as they apply across all states and territories in Australia. The amendments are specifically designed to address the financial strain on retirees by reducing the minimum payment requirements, which in turn alleviates the pressure to sell assets at a loss to meet these obligations. There are no stated exclusions or exemptions in these regulations, and they do not set specific thresholds beyond the reduction in minimum payment amounts as outlined in the amendments. The application of these regulations is further extended or restricted through the subordinate instruments detailed in the respective schedules of the regulations.

Key Provisions

The Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 3) and the Retirement Savings Accounts Amendment Regulations 2010 (No. 3) (the Regulations) amend the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) and the Retirement Savings Accounts Regulations 1997 (RSA Regulations) respectively. These amendments reduce the minimum annual payment amounts for account-based, allocated, and market-linked annuities and pensions, and for pensions payable from Retirement Savings Accounts, for the 2010-11 financial year. The primary objective of these Regulations is to provide relief to pension account holders by reducing the minimum payment requirements, thereby preventing them from having to sell assets at a loss during a period of capital loss associated with the global financial crisis. The Regulations impose specific obligations on entities managing superannuation funds and pensions. For instance, financial institutions and pension providers must adjust the minimum payment amounts for account-based, allocated, and market-linked pensions as per the new rates specified in the Regulations. This includes ensuring that retirees and annuitants are aware of and comply with the reduced minimum payment requirements for the 2010-11 financial year. These changes necessitate updates to internal systems and communication strategies to inform customers about the new payment limits and how they apply. Failure to comply with these Regulations may lead to civil and criminal consequences. For financial institutions and pension providers, non-compliance could result in enforcement actions, fines, or other penalties as stipulated under the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Retirement Savings Accounts Act 1997 (RSA Act). For individuals, not adhering to the adjusted minimum payment amounts could lead to financial penalties or other legal repercussions. The precise nature and extent of these penalties are not specified in the Regulations themselves but would be determined under the governing Acts and any applicable administrative or judicial processes.

Legal classification tags

Area of Law
Superannuation Law
Financial Services Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Repeal & Amendment
Regulatory Standards
Compliance Obligations

Interactions

Authorises

All Versions

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.