EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 337
Issued by authority of the Parliamentary Secretary to the Treasurer
Superannuation (Resolution of Complaints) Act 1993
Superannuation (Resolution of Complaints) Amendment Regulations 2005 (No. 2)
The Superannuation (Resolution of Complaints) Act 1993 (the Act) establishes the Superannuation Complaints Tribunal (SCT) to hear and determine complaints between the providers of superannuation and like products and their consumers.
Section 68 of the Act provides that the Governor-General may make regulations 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 this Act.
In addition, section 4B of the Act provides that the regulations may specify who may or may not be treated as ‘qualifying persons’ for the purposes of the Act. Under subsection 4B(4), a ‘qualifying person’ is a:
• member of a superannuation fund;
• beneficiary of an approved deposit fund;
• person who has an interest in a death benefit; or
• holder of a Retirement Savings Account (RSA).
The Superannuation (Resolution of Complaints) Regulations 1994 (the Principal Regulations) prescribe matters that are required or permitted by the Act or necessary for it to be carried out or given effect to.
The purpose of these regulations is to allow non-member spouses the same rights of complaint to the SCT as their member spouse.
Since 2002, the Family Law Act 1975 (FL Act) has allowed future superannuation benefits payable to spouses to be split in family law property settlements under the FL Act. The relevant provisions were extended in June 2005 to superannuation-like annuity payments.
These reforms created the potential that former spouses of superannuation fund members, entitled to future payments from a superannuation fund under a Family Court agreement or order, may need to complain to the SCT about a trustee’s decision regarding the terms of an agreement or order.
Whilst the Act was amended in response to the FL Act reforms, these reforms were not fully effective and non-member spouses still lacked standing before the SCT.
Therefore, these regulations deem a non-member spouse to be:
• a member of a superannuation fund;
• a beneficiary of an approved deposit fund; or
• the holder of an RSA.
The regulations also give ‘eligible persons’, as defined in subsection 90MZB(8) of the FL Act, standing to lodge a complaint with the SCT regarding trustee actions in response to section 90MZB.
This is important as many spouses rely on trustees to provide them with information regarding the other spouse’s superannuation interest before negotiating a superannuation agreement.
It was not necessary to further provide non-member spouses with a right to complain to the SCT regarding the payment of a death benefit as they already fell within the phrase ‘persons with an interest in a death benefit’. Similarly, the Principal Regulations were not amended to allow non-member spouse beneficiaries of an annuity split standing before the SCT as the class of persons entitled to lodge a complaint (‘persons with an interest in an annuity split’) includes non-member spouses.
The Office of Regulation Review advised that the reforms were unlikely to have a direct, or a substantial indirect, effect on business or restrict competition. Further, the change was of a minor or machinery nature and, therefore, no Regulatory Impact Statement was required.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Overview
The Superannuation (Resolution of Complaints) Amendment Regulations 2005 (No. 2) were enacted to address the gap in the Superannuation (Resolution of Complaints) Act 1993, which previously did not provide non-member spouses with the same rights of complaint to the Superannuation Complaints Tribunal (SCT) as their member spouse. This gap arose from the Family Law Act 1975 reforms that allowed future superannuation benefits payable to spouses to be split in family law property settlements, creating a scenario where non-member spouses could need to lodge complaints about trustee decisions regarding the terms of an agreement or order. These regulations were issued by the Governor-General under the authority of section 68 of the Act, and their policy objective is to ensure that non-member spouses, who are entitled to future payments from a superannuation fund under a Family Court agreement or order, have the standing to lodge complaints with the SCT. The changes were designed to align with the Family Law Act 1975 reforms, providing a more comprehensive resolution mechanism for complaints related to superannuation.
Scope and Application
The Superannuation (Resolution of Complaints) Amendment Regulations 2005 (No. 2) pertain to the Superannuation (Resolution of Complaints) Act 1993, which establishes the Superannuation Complaints Tribunal to handle disputes between superannuation fund providers and their consumers. The amendment regulations primarily address the eligibility of non-member spouses to lodge complaints with the Tribunal. This includes spouses who may be entitled to future superannuation benefits under a Family Court agreement or order, aligning with changes made by the Family Law Act 1975. The regulations deem non-member spouses as members of a superannuation fund, beneficiaries of an approved deposit fund, or holders of a Retirement Savings Account, thereby granting them the same rights to complain as their member spouse counterparts. Additionally, eligible persons, as defined under the Family Law Act, are also granted standing to lodge complaints regarding trustee actions in response to specific sections of the Act. These regulations ensure that non-member spouses have the necessary legal standing to seek resolution through the Tribunal when disputes arise, reflecting the legislative intent to provide equitable access to the complaint resolution process.
Key Provisions
The Superannuation (Resolution of Complaints) Amendment Regulations 2005 (No. 2) amend the Superannuation (Resolution of Complaints) Regulations 1994 to address the issue of non-member spouses having standing before the Superannuation Complaints Tribunal (SCT). Specifically, section 3 of the amendment regulations deem a non-member spouse to be a member of a superannuation fund, a beneficiary of an approved deposit fund, or the holder of a Retirement Savings Account (RSA) (regulation 3). This means that non-member spouses, who are entitled to future payments from a superannuation fund under a Family Court agreement or order, now have the same rights of complaint to the SCT as their member spouse. Additionally, ‘eligible persons’, as defined in subsection 90MZB(8) of the Family Law Act 1975, are granted standing to lodge a complaint with the SCT regarding trustee actions in response to section 90MZB (regulation 4).
The regulations impose certain obligations on the parties involved. Superannuation fund trustees are required to treat non-member spouses as members for the purposes of lodging a complaint with the SCT. Similarly, approved deposit fund managers must recognise non-member spouses as beneficiaries and RSA holders must recognise non-member spouses as RSA holders. These obligations ensure that non-member spouses have the necessary standing to lodge complaints and seek resolution of their concerns through the SCT.
Breaches of the regulations may result in civil or criminal consequences. However, the specific penalties for non-compliance are not outlined in the explanatory statement. It is important for trustees, fund managers, and RSA holders to adhere to the regulations to avoid any potential legal repercussions. The regulations came into effect on the day after they were registered on the Federal Register of Legislative Instruments, ensuring that the changes are applicable and enforceable from that date.