EXPLANATORY STATEMENT
Superannuation Supervisory Levy Imposition Determination 2006
This determination relates to a levy imposed by the Superannuation Supervisory Levy Imposition Act 1998 on superannuation entities.
This determination commences on 1 July 2006 and relates to the 2006‑07 financial year. The Superannuation Supervisory Levy Imposition Determination 2005 is revoked upon commencement of this determination. Consistent with section 50 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.
Subsection 7(3) of the Superannuation Supervisory Levy Imposition Act 1998 allows the Treasurer to determine;
(a) the maximum restricted levy amount for each financial year;
(b) the minimum restricted levy amount for each financial year;
(c) the restricted levy percentage for each financial year;
(ca) the unrestricted levy percentage for each financial year; and
(d) how a superannuation entity’s asset value is to be calculated.
For superannuation funds other than small APRA funds (SAFs), this determination provides that the restricted component of the 2006‑07 levy will be calculated at 0.0340 per cent of assets held by the entity, subject to a minimum of $570 and a maximum of $150 000. The unrestricted component of the 2006-07 levy will be calculated at 0.001490 per cent of assets held by the entity.
For SAFs, this determination provides that the restricted component of the 2006‑07 levy will be calculated at 0 per cent of assets held by the entity, subject to a minimum of $500 and a maximum of $500. The unrestricted component of the 2006-07 levy will be calculated at 0 per cent of assets held by the entity. In effect, SAFs will be levied a flat amount of $500.
This determination puts in place a second year of transitional arrangements for implementing the new levy determination framework (introduced for the 2005‑06 levies) for the superannuation sector, as was allowed for in the Government’s response to the Review of Financial Sector Levies. In particular, the maximum on the restricted component is lower and the restricted levy percentage higher than full immediate implementation of the new levy framework would require. From 2007‑08 it is expected that the superannuation sector levy calculations will be based on a full implementation of the new levy framework.
The finance sector has been consulted on the 2006‑07 supervisory levies through a Treasury and Australian Prudential Regulation Authority consultation paper released on 12 May 2006 and a number of follow-up meetings to discuss the issues in the paper.
This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Superannuation Supervisory Levy Imposition Determination 2006, enacted in 2006, is a legislative instrument designed to address the financial oversight and regulatory costs associated with the administration of superannuation funds in Australia. This determination provides a framework for calculating the supervisory levies on superannuation entities, aligning with the objectives outlined in the Superannuation Supervisory Levy Imposition Act 1998. It was introduced to ensure a fair and consistent application of the levy across different types of superannuation entities, particularly small APRA funds (SAFs). The determination was made by the Treasurer under the authority granted by the Superannuation Supervisory Levy Imposition Act 1998 and is a response to the need for transitional arrangements in implementing the new levy framework. This legislative instrument ensures that any obligations or liabilities incurred in previous financial years remain valid, as stipulated by the Acts Interpretation Act 1901.
Scope and Application
The Superannuation Supervisory Levy Imposition Determination 2006 applies to superannuation entities as defined under the Superannuation Supervisory Levy Imposition Act 1998. This Act imposes a levy on these entities to support the regulatory costs associated with the oversight of superannuation funds. The determination specifically addresses the 2006-07 financial year, replacing the Superannuation Supervisory Levy Imposition Determination 2005 upon commencement on 1 July 2006. It applies to all superannuation entities except small APRA funds (SAFs), which are subject to different levy rates. For non-SAFs, the restricted levy component is set at 0.0340% of the entity's assets, with a minimum levy of $570 and a maximum of $150,000, while the unrestricted component is set at 0.001490% of assets. SAFs, however, are subject to a flat levy of $500. This framework is part of a transitional arrangement, with full implementation of the new levy framework expected from the 2007-08 financial year. The determination also allows for obligations and liabilities incurred in previous financial years to remain valid under section 50 of the Acts Interpretation Act 1901.
Key Provisions
The Superannuation Supervisory Levy Imposition Determination 2006 sets out the rates and methods for calculating the supervisory levy imposed on superannuation entities for the 2006-07 financial year. According to section 7(3) of the Superannuation Supervisory Levy Imposition Act 1998, the determination specifies the maximum and minimum restricted levy amounts, the restricted and unrestricted levy percentages, and the calculation of a superannuation entity’s asset value. For non-SAF superannuation funds, the restricted levy for 2006-07 is set at 0.0340% of the fund’s assets, with a minimum of $570 and a maximum of $150,000. The unrestricted levy is set at 0.001490% of assets (subsection 7(3)(b)). For Small APRA Funds (SAFs), the restricted levy is a flat $500, with no percentage applied, and the unrestricted levy is also 0%.
The determination outlines obligations for superannuation entities, requiring them to calculate their levies based on the specified percentages and asset values. It mandates that these calculations are to be conducted in accordance with the detailed provisions of the determination, ensuring that entities understand and apply the correct rates and thresholds. Superannuation entities must also ensure that their financial reporting and disclosure comply with the requirements set out in the Act and the determination. Additionally, the determination revokes the previous year's levy determination upon its commencement, though any pre-existing obligations or liabilities remain valid.
Failure to comply with the obligations set out in the determination may result in financial penalties. The determination itself does not specify penalties but refers back to the broader legislative framework, including the Superannuation Supervisory Levy Imposition Act 1998 and other related laws. Penalties for non-compliance with superannuation regulations can include fines and legal actions. The exact penalties can vary based on the specific breaches and the relevant sections of the Act, but they can be substantial, reflecting the importance of compliance in the financial sector.