Superannuation Supervisory Levy Amendment Regulations 1999 (No. 1)

Overview

The Superannuation Supervisory Levy Amendment Regulations 1999 (No. 1) were enacted in 1999 to address the need for the adjustment of the supervisory levy imposed on excluded superannuation funds as recommended by the Financial System Inquiry. This amendment was made under the authority of the Assistant Treasurer, pursuant to the Superannuation (Excluded Funds) Supervisory Levy Imposition Act 1991. The policy objective behind this amendment was to ensure that the regulatory charges levied on superannuation funds more accurately reflect the associated costs of regulation, thereby achieving a more equitable distribution of financial responsibility. The regulations reduce the supervisory levy from $200 to $45 per excluded superannuation fund for the 1998-99 and subsequent financial years, aligning with the Inquiry's findings. Furthermore, the regulations update the name of the principal regulations to Superannuation (Excluded Funds) Supervisory Levy Imposition Regulations 1991, reflecting a prior change in the name of the Act that came into effect in 1998. These changes aim to streamline and clarify the regulatory framework governing the supervisory levy on excluded superannuation funds.

Scope and Application

The Superannuation (Excluded Funds) Supervisory Levy Imposition Act 1991 and the accompanying Superannuation Supervisory Levy Regulations impose a supervisory levy on trustees of excluded superannuation funds, which is payable to the Australian Prudential Regulation Authority (APRA). This levy is intended to cover the costs associated with the supervision of these funds. The Act applies specifically to the trustees of excluded superannuation funds, which are those not complying with the Superannuation Industry (Supervision) Act 1993. The regulations amend the Principal Regulations to reduce the supervisory levy for excluded superannuation funds from $200 to $45 per annum for the 1998-99 and subsequent years of income, aligning with the Financial System Inquiry's recommendation that regulatory charges should reflect their actual costs. These regulations also update the name of the principal regulations to Superannuation (Excluded Funds) Supervisory Levy Imposition Regulations 1991, reflecting the change in the name of the Act that took effect in 1998. The regulations are effective from 1 May 1999 and can be extended or modified through subordinate instruments made under the authority of the Assistant Treasurer, subject to consultation with relevant industry bodies as specified in the Act.

Key Provisions

The Superannuation Supervisory Levy Amendment Regulations 1999 (No. 1) amend the existing Superannuation Supervisory Levy Regulations by reducing the amount of the supervisory levy that excluded superannuation funds must pay from $200 to $45 per annum (Section 4). This change applies to the 1998-99 and subsequent financial years, aligning with the recommendation that regulatory agencies' charges should reflect their actual costs. These regulations are made under the authority of Section 7(1) of the Superannuation (Excluded Funds) Supervisory Levy Imposition Act 1991, which allows the Governor-General to make regulations following consultation with specified industry bodies, as outlined in Section 7(2) of the Act. Additionally, the regulations update the name of the principal regulations to Superannuation (Excluded Funds) Supervisory Levy Imposition Regulations 1991, reflecting a change in the name of the Act that took effect in 1998. The regulations impose several obligations on trustees of excluded superannuation funds. Firstly, they are required to calculate the new levy amount of $45 per annum for the 1998-99 and subsequent financial years, instead of the previous amount of $200 (Regulation 4). Trustees must ensure that this reduced levy amount is paid to the Australian Prudential Regulation Authority (APRA) as per the revised calculations stipulated in the amended regulations. Furthermore, trustees must update their records and reporting mechanisms to reflect this change in levy amount, ensuring compliance with the new requirements. Failure to comply with the amended regulations can lead to various consequences. Firstly, trustees who do not remit the correct amount of the supervisory levy to APRA may face enforcement actions from APRA, which can include financial penalties or other regulatory sanctions. Under the Superannuation (Excluded Funds) Supervisory Levy Imposition Act 1991, there are also provisions for civil and criminal penalties for non-compliance, which may include fines and imprisonment, although specific penalties are not detailed in the explanatory statement. The exact penalties would depend on the nature and severity of the non-compliance, as well as any additional legislative provisions that might apply.