OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) 1990 NO. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) 1990 NO. 275 - TABLE OF PROVISIONS 1. Principal Regulations 2. Interpretation 3. 4. Approved auditor 5. 6. Preservation and portability standards 7. Financial reports, disclosure of information and reduction of benefits: standards 8. Preservation and portability standards 9. 10. Prescribed fees 11. 12. Transitional 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 1 Principal Regulations 1. In these Regulations, ``Principal Regulations" means theOccupational Superannuation Standards Regulations. 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 2 Interpretation 2. Regulation 3 of the Principal Regulations is amended: (a) by omitting paragraph (a) of the definition of ``member-financed benefits" in subregulation (1) and substituting the following paragraph: ``(a) where the amount of benefits that are vested in a member of a superannuation fund on withdrawal from the fund is calculated on the basis of contributions to the fund or such contributions and income derived from those contributions - the sum of: (i) the contributions made by the member to the fund; and (ii) the net earnings of the fund allotted to the member in accordance with the governing rules in respect of the earnings attributable to those contributions; less an amount equal to any administrative or other costs that are deducted from those contributions in accordance with the governing rules but: (iii) are not otherwise deducted from those contributions; and (iv) are not otherwise deducted from fund income for the purpose of determining the net earnings of the fund; and (v) are not otherwise charged to the account of the member;"; (b) by omitting subregulation (3) and substituting the following subregulation: ``(3) For the purposes of these Regulations, a reference to the net earnings of a superannuation fund is read as a reference to fund earnings after allowing for, at the discretion of the trustees in accordance with the governing rules: (a) the sum of all costs deducted or charged as mentioned in subparagraphs (iii), (iv) and (v) of the definition of `member-financed benefits' in subregulation (1); and (b) any averaging of fund earnings (calculated after deducting the amount of any costs referred to in paragraph (a)) to reduce the effect of actual or possible periodic fluctuations in those earnings; and (c) any losses incurred by the fund that have not otherwise been deducted."; (c) by adding at the end the following subregulations: ``(7) For the purposes of paragraphs (a) and (c) of the definition of `member-financed benefits' in subregulation (1), if a member withdraws from a superannuation fund after the end of the latest period in respect of which the net earnings of the fund have been allotted to members in accordance with the governing rules, the benefits must include a reasonable share of the estimated net earnings of the fund for the period: (a) that begins at the end of that latest period; and (b) that ends when the member withdraws from the fund. ``(8) Payment to the member of a superannuation fund of the share referred to in subregulation (7) discharges the obligation of the trustees of the fund under these Regulations to pay net earnings of the fund to that member in respect of the second-mentioned period in that subregulation. ``(9) If a member of a superannuation fund: (a) joined the fund under an arrangement; or (b) otherwise agreed; that the whole or a part of the contributions of the member to the fund would be invested in a particular portfolio or other division of the fund, a reference in this regulation to that fund is read, in respect of those, or that part of those, contributions as a reference to that portfolio or other division of the fund. ``(10) A reference in this regulation to costs deducted from the contributions of a member of a superannuation fund to whom subregulation (9) applies is a reference to costs in respect of the particular portfolio or other division of the fund referred to in that subregulation.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 3 3. After regulation 3A of the Principal Regulations the following regulations are inserted: Vesting and payment standards: estimated earnings ``3B. (1) For the purposes of subsection 7 (1) of the Act, the standards in this regulation are prescribed in relation to the vesting in, and payment to, members or former members of benefits arising directly or indirectly from amounts contributed to superannuation funds. ``(2) In estimating under subregulation 3 (7) the net earnings for a period the trustees must have regard to: (a) the factors taken into account in the latest calculation of the net earnings of the superannuation fund for the purpose of allotting those net earnings to members; and (b) the likely returns on the investments of the fund for the period that: (i) begins at the end of the latest period referred to in that subregulation; and (ii) ends at the end of the next period in respect of which the net earnings of the fund are to be allotted to members; and (c) any other factors likely to influence the net earnings of the fund during the period referred to in paragraph (b). ``(3) An estimate under subregulation 3 (7) of the reasonable share of the net earnings for a period: (a) applies to a member who withdraws from the fund in the period; and (b) remains in force unless the trustees make another estimate in relation to the period, or any part of the period, in accordance with subregulation (2). Application of superannuation orders ``3C. The standards prescribed by these Regulations apply in relation to a superannuation fund subject to the effect of any superannuation order within the meaning of the Crimes (Superannuation Benefits) Act 1989 that is made in respect of any member of the fund. Prescribed age: definition of ``superannuation fund" - subsection 3 (1) ``3D. For the purposes of the definition of `superannuation fund' in subsection 3 (1) of the Act, the age of 65 years is prescribed.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 4 Approved auditor 4. Regulation 4 of the Principal Regulations is amended by omitting from subparagraph (1) (b) (i) ``Accountants or the Institute of Affiliate" and substituting ``Certified Practising Accountants or the National Institute of". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 5 5. Regulation 5 of the Principal Regulations is repealed and the following regulation substituted: Standards relating to liens over benefits ``5. (1) For the purposes of subsection 7 (1) of the Act, the standards in this regulation are prescribed in relation to the exercise of liens over prescribed benefits of a superannuation fund. ``(2) A trustee of a superannuation fund must not be a party, or give effect, to the exercise of a lien over prescribed benefits by another person. ``(3) The trustees of a superannuation fund must not exercise a lien over prescribed benefits except in respect of an identified debt owed by a member to the trustees as trustees of the fund. ``(4) If a person has exercised a lien over particular prescribed benefits before the commencement of this regulation otherwise than in accordance with this regulation, the person must not vary the lien except to limit its scope or to remove it. ``(5) In this regulation, `prescribed benefits', in relation to a member of a superannuation fund, means benefits that are required by the standards prescribed in this Part to be: (a) vested in the member; or (b) preserved by the fund. ``(6) In this regulation, a reference to the exercise by a person of a lien over prescribed benefits of a superannuation fund includes a reference to: (a) the making by a member of the fund of an arrangement in writing that provides for the lien to be exercised in respect of an identified debt owed by the member to the person; and (b) the giving of notice of the intention of the person to exercise the lien in respect of an identified debt owed by a member to the person if exercise of the lien is required to protect the interests of that person; and (c) the taking by the person of any action required for the purpose of giving effect to the lien in respect of an identified debt owed by a member to the person.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 6 Preservation and portability standards 6. Regulation 11 of the Principal Regulations is amended: (a) by inserting in paragraph (a) ``or annuity" after ``pension"; (b) by omitting from paragraph (a) ``from the workforce" (first occurring); (c) by adding at the end the following subregulation: ``(2) A deferred annuity: (a) nominated by a person, being an annuity to whichsub-subparagraph (1) (c) (ii) (C) applies; and (b) the benefits of which are payable not earlier than the happening of a circumstance referred to in subparagraph (1) (a) (ii) or sub-subparagraph (1) (a) (iii) (A), (B), (C) or (D); is not, for the purposes of sub-subparagraph (1) (c) (ii) (C), a deferred annuity that can be assigned before the person attains the age of 55 years only because the value of the annuity may be commuted and transferred, with the consent of that person, before he or she attains that age, to: (c) a superannuation fund referred to in sub-subparagraph (1) (c) (ii) (A); or (d) an approved deposit fund referred to in sub-subparagraph (1) (c) (ii) (B); or (e) another deferred annuity referred to in sub-subparagraph (1) (c) (ii) (C).". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 7 Financial reports, disclosure of information and reduction of benefits: standards 7. Regulation 17 of the Principal Regulations is amended: (a) by omitting paragraph (1) (d) and substituting the following paragraph: ``(d) in relation to the benefits that may be provided by a superannuation fund: (i) the governing rules must not be amended in a way that would have the effect of: (A) reducing the amount of a benefit, calculated on the basis of contributions to the fund and earnings on those contributions, that has accrued, or become payable, to a member before the amendment; or (B) reducing the amount of a benefit, other than a benefit referred to in sub-subparagraph (A), that is, or may become, payable to a member in relation to a period before the amendment; and (ii) the benefits that have accrued, or become payable, to a member of a fund must not otherwise be reduced; unless: (iii) the reduction is required because of, and does not exceed the value of, any tax payable on fund income; or (iv) the reduction is required only to enable the fund to comply with standards prescribed by these Regulations; or (v) the member approves in writing of the reduction; or (vi) the Commissioner approves in writing of the reduction;"; (b) by omitting sub-subparagraph (1) (e) (i) (F) and substituting the following sub-subparagraph: ``(F) the amount of net earnings allotted to the member during that year of income or the rate at which those earnings were allotted or both that amount and that rate;"; (c) by inserting in subparagraph (1) (f) (iii) ``, disablement" after ``death"; (d) by inserting in paragraph (2) (a) ``at the date of the latest valuation" after ``fund"; (e) by inserting in paragraph (2) (b) ``at the date of the latest valuation" after ``assets of the fund"; (f) by omitting paragraph (2) (d) and substituting the following paragraph: ``(d) a statement whether the sum of: (i) all liabilities of the fund during that 3-year period that can reasonably be anticipated; and (ii) all benefits of the fund that can reasonably be anticipated to vest at the end of that 3-year period in the persons who are members of the fund on the day as at which the actuarial investigation is made; can reasonably be met from the sum of: (iii) the value of the assets of the fund at the date of the latest valuation; and (iv) the assumed member contributions during that 3- year period; and (v) the assumed employer contributions during that 3- year period calculated at the rate or rates referred to in paragraph (c); and (vi) the earnings of the fund assumed by the actuary with respect to that 3-year period."; (g) by adding at the end the following subregulations: ``(4) Instead of giving a written statement under paragraph (1) (e) setting out particulars relating to a year of income: (a) the trustees may give a statement setting out corresponding particulars relating to a period of 12 months beginning on a day in that year of income; and (b) if the trustees do so: (i) the trustees must, in relation to each succeeding year of income, give a statement setting out corresponding particulars relating to the corresponding succeeding period; and (ii) the reference in paragraph (1) (f) to the last day of a year of income of a superannuation fund is read, in relation to the fund, as a reference to the last day of the period beginning in that year of income; and (iii) the reference in subparagraph (1) (f) (iii) to the first day of the year of income during which the person ceased to be a member of a superannuation fund is read as a reference to the first day of the period (beginning in that year of income) in which the person ceased to be a member of the fund. ``(5) If a statement in respect of a year of income sets out under sub-subparagraph (1) (e) (i) (F): (a) the amount of net earnings allotted to a member and the statement in respect of the immediately preceding year of income did not set out the amount of net earnings allotted to the member; or (b) the rate at which net earnings were allotted to a member and the statement in respect of the immediately preceding year of income did not set out the rate at which net earnings were allotted to the member; the trustees must specify in the first-mentioned statement the reason for not setting out the first-mentioned amount or the first-mentioned rate, as the case may be.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 8 Preservation and portability standards 8. Regulation 21 of the Principal Regulations is amended: (a) by inserting in subparagraph (d) (ii) ``nominated by the person" after ``fund" (first occurring); (b) by adding at the end the following subregulation: ``(2) A deferred annuity: (a) nominated by a person to whom paragraph (1) (d) applies; and (b) the benefits of which are payable not earlier than the happening of a circumstance referred to in subparagraph (1) (b) (ii) or sub-subparagraph (1) (b) (iii) (A), (B), (C) or (D); is not, for the purposes of subparagraph (1) (d) (iii), a deferred annuity that can be assigned before the person attains the age of 55 years only because the value of the annuity may, with the consent of that person, be commuted and transferred, before he or she attains that age, to: (c) an approved deposit fund referred to in subparagraph (1) (d) (i); or (d) a superannuation fund referred to in subparagraph (1) (d) (ii); or (e) another deferred annuity referred to in subparagraph (1) (d) (iii).". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 9 9. Before regulation 24 of the Principal Regulations the following regulation is inserted in Part IV: Keeping and retention of records ``23Q. For the purposes of subsections 7 (1), 8 (1) and 8A (1) of the Act, the trustees of a superannuation fund, an approved deposit fund or a pooled superannuation trust must: (a) keep records of the transactions, acts and operations of the fund or trust, as the case may be; and (b) retain those records for at least 5 years after the end of the year of income in which the transactions, acts or operations occurred.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 10 Prescribed fees 10. Regulation 25 of the Principal Regulations is amended by omitting ``is $30." and substituting ``is: (a) in the case of a return in respect of a year of income ending on or before 30 June 1989 - $30; and (b) in the case of a return in respect of the year of income ending on or after 30 June 1990 that is given to the Commissioner on or before 31 August 1990 - $30; and (c) in the case of a return in respect of a year of income ending on or after 30 June 1990 that is not referred to in paragraph (b) - $40.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 11 11. After regulation 25 of the Principal Regulations the following regulation is inserted: Payment of tax ``26. Payment of tax by the trustees of a superannuation fund or of an approved deposit fund does not affect the compliance by the trustees with standards prescribed by these Regulations.". 1990 No. 275 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 12 Transitional 12. (1) In this regulation, ``former Regulations" means the Principal Regulations as in force immediately before the commencement of these Regulations. (2) The amendments made by regulation 5 do not affect the continued exercise of a lien that: (a) was first exercised before the commencement of regulation 5 of the former Regulations; or (b) was: (i) first exercised after the commencement of that regulation and before the commencement of these Regulations; and (ii) not so exercised in contravention of that regulation. - NOTES 1990 No. 275*1* OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS*2* (AMENDMENT) *1* Notified in the Commonwealth of Australia Gazette on 21 August 1990. *2* Statutory Rules 1987 No. 322 as amended by 1988 No. 255; 1989 Nos. 24, 281 and 356; 1990 Nos. 149, 150, 185 and 202.