OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) 1992 NO. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) 1992 NO. 223 - TABLE OF PROVISIONS 1. Commencement 2. Amendment 3. Regulation 3 (Interpretation) 4. Regulation 5AA (Standards: acceptance of contributions by superannuation funds) 5. Regulation 8 (Vesting standards-certain contributions to funds) 6. New regulation 8A 7. Regulation 18B (Standards relating to contributions) 8. New Subdivision F of Division 2 of Part II 9. New Schedule 9 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 1 1. Commencement 1.1 These Regulations commence on the commencement of the Superannuation Guarantee (Administration) Act 1992. 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 2 2. Amendment 2.1 The Occupational Superannuation Standards Regulations are amended as set out in these Regulations. 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 3 3. Regulation 3 (Interpretation) 3.1 Subregulation 3 (1) (definition of "defined benefit superannuation fund"): Omit the definition, substitute: " 'defined benefit superannuation fund' means a superannuation fund whose governing rules provide that: (a) in all cases-one or more members of the fund are entitled, on retirement, to be paid a benefit defined, wholly or in part, by reference to either or both of the following: (i) the amount of the member's annual salary: (A) at the date of the member's retirement; or (B) at a date before retirement; or (C) averaged over a period of employment before retirement; (ii) a specified amount; and (b) if the fund is not a public sector fund-some or all of the contributions to the fund (out of which, together with earnings on those contributions, benefits are to be paid) are not paid into a fund, or accumulated in a fund, in respect of any individual member but are paid into and accumulated in a fund in the form of an aggregate amount;". 3.2 Subregulation 3 (1): After the definition of "member representative", insert: " 'minimum requisite benefit', in relation to a member of a superannuation fund, means the minimum benefit required to be vested in the member by the superannuation fund conditions;". 3.3 Subregulation 3 (1): After the definition of "related entity", insert: " 'shortfall component' means a shortfall component within the meaning of section 59 of the Guarantee Act;". 3.4 Subregulation 3 (1): Add at the end: " 'the Guarantee Act' means the Superannuation Guarantee (Administration) Act 1992 .". 3.5 Paragraph 3 (3) (a): Omit "subparagraphs (iii), (iv) and (v)", substitute "subparagraphs (a) (iii), (iv) and (v)". 3.6 Subregulation 3 (4): Omit the subregulation, substitute: "(4) For the purposes of these Regulations, unless the contrary intention appears, a reference to contributions to a superannuation fund made by an employer of a member of the fund is taken to include a reference to: (a) the amount of a shortfall component in respect of the member that is contributed to that fund; and (b) any other contributions to the fund made by or on behalf of a person, other than the member, in respect of the member.". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 4 4. Regulation 5AA (Standards: acceptance of contributions by superannuation funds) 4.1 Paragraph 5AA (2) (b): Omit the paragraph, substitute: "(b) unless the contributions are made: (i) in respect of the member for the purposes of the Guarantee Act in amounts that do not exceed the minimum amounts required by that Act so that superannuation guarantee charge is not payable by the employer making the contributions; or (ii) as payment of the shortfall component in relation to the member; or (iii) in accordance with a prescribed agreement or award.". 4.2 Paragraph 5AA (3) (a): Omit all the words following subparagraph (a) (ii), substitute: "unless the contributions are made: (iii) in respect of the member for the purposes of the Guarantee Act in amounts that do not exceed the minimum amounts required by that Act so that superannuation guarantee charge is not payable by the employer making the contributions; or (iv) as payment of the shortfall component in relation to the member; or (v) in accordance with a prescribed agreement or award; or". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 5 5. Regulation 8 (Vesting standards-certain contributions to funds) 5.1 Subregulation 8 (1): Omit the subregulation, substitute: "(1) For the purposes of subsection 7 (1) of the Act, a standard specified in this regulation is prescribed in relation to the vesting in members of superannuation funds of benefits arising directly or indirectly from amounts contributed to the funds. "(1A) Any benefits, other than death or disability benefits, vest in the member on the day on which the benefits accrue, if the benefits arise directly or indirectly from contributions made in respect of a member of a superannuation fund: (a) by an employer in amounts that do not exceed the minimum amounts required by the Guarantee Act so that superannuation guarantee charge is not payable by the employer; or (b) as payment of the shortfall component in relation to the member; or (c) in accordance with a prescribed agreement or award.". 5.2 Subregulation 8 (2): Omit "subregulation (1)", substitute "paragraph (1A) (c)". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 6 6. New regulation 8A 6.1 After regulation 8, insert: Vesting standard: limitation on increases "8A. (1) In this regulation, 'fund' means a superannuation fund that: (a) is not a defined benefit superannuation fund; and (b) whose benefits are not guaranteed by the Commonwealth or by a State or Territory. "(2) For the purposes of subsection 7 (1) of the Act, the standard in subregulation (3) is prescribed in relation to the vesting in members of funds of benefits arising directly or indirectly from amounts contributed to the funds. "(3) The rate of increase of benefits vested in a member of a fund in respect of a year of income of that fund from the net earnings of the fund must be less than the rate of vesting of benefits in members of the fund that is prescribed in subregulation (4). "(4) The prescribed rate is the rate that, if the fund were terminated immediately after the vesting, would have the effect of reducing the amount of the assets of the fund so that those assets would be insufficient to pay the minimum requisite benefit in respect of other members of the fund.". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 7 7. Regulation 18B (Standards relating to contributions) 7.1 Paragraph 18B (3) (b): Omit the paragraph, substitute: "(b) the contribution is made: (iii) in respect of the member for the purposes of the Guarantee Act in an amount that does not exceed the minimum amount required by that Act so that superannuation guarantee charge is not payable by the employer making the contribution; or (iv) as payment of the shortfall component in relation to the member; or (v) in accordance with a prescribed agreement or award.". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 8 8. New Subdivision F of Division 2 of Part II 8.1 After regulation 18P, insert in Part II: "Subdivision F-Information disclosed to employer-contributors or the Commissioner Information to be given to employer-contributors generally and to the Commissioner "18Q. (1) The trustees of a superannuation fund must give documents of the kinds specified in subregulation (2), on request, to an employer: (a) who contributes to the fund in respect of a member of the fund; and (b) who contributes to the fund in amounts that do not exceed the minimum amounts required by the Guarantee Act so that superannuation guarantee charge is not payable by the employer. "(2) The specified kinds of documents are a copy of the governing rules of the fund as in force: (a) at the time of the first contribution in respect of the employee; and (b) after any alteration to those rules. "(3) Before, or as soon as practicable after, the first contribution is made to a superannuation fund by an employer in respect of a member of the fund, the trustees of the fund must give to the employer a statement signed by, or on behalf of, the trustees that the fund satisfies the superannuation fund conditions. "(4) If the trustees of a superannuation fund become aware of the fact that the fund has ceased to satisfy the superannuation fund conditions, the trustees must give notice in writing of the fact to an employer who contributes to the fund. "(5) If the trustees of a superannuation fund become aware, other than by notice from the Commissioner, of the fact that the fund has ceased to satisfy the superannuation fund conditions, the trustees must give notice in writing of the fact to the Commissioner. "(6) A notice under subregulation (4) or (5) must be given as soon as practicable. Prescribed information: subsection 10 (1) of the Act "18R. (1) For the purposes of subsection 10 (1) of the Act: (a) the period of 60 days is prescribed; and (b) the information specified in Form 1 is prescribed. "(2) Information given under that subsection must be given in accordance with Form 1. "(3) Trustees who give Form 1 to the Commissioner must give to the Commissioner at the same time a certificate in accordance with Form 2. "(4) In this regulation, a reference to a form by number is a reference to the form so numbered in the Schedule. Information to be given to employer-contributors to defined benefit superannuation funds "18S. (1) The trustees of a defined benefit superannuation fund must give a notice in respect of a year of income of the fund beginning on or after 1 July 1992, on request, to an employer who contributes to the fund: (a) in respect of employees of that employer; and (b) in amounts that do not exceed the minimum amounts required by the Guarantee Act so that superannuation guarantee charge is not payable by the employer. "(2) The notice must: (a) include the names of those employees and, if applicable, the names of those employees in each specified class of employees of the fund within the meaning of section 10 of the Guarantee Act; and (b) state the period, or periods, in that year in which those employees were members of the fund; and (c) state the annual salary (if any), for the purposes of the governing rules of the fund, of each of those employees as at the date on which the notice was prepared; and (d) state any notional employer contribution rate, within the meaning of section 10 of that Act, in relation to each of those employees; and (e) if any alteration of the governing rules of the fund causes a benefit certificate within the meaning of that section to lapse-include notice of the alteration. "Division 3-Defined Benefit Superannuation Funds: Certificates of Contribution and Solvency Prescribed standards "18T. For the purposes of subsection 7 (1) of the Act, the standards set out in this Division are prescribed in relation to defined benefit superannuation funds. Certificates of contribution and solvency "18U. (1) Unless subregulation 18V (1) applies, the trustees of a fund must obtain the certificate of an actuary: (a) in respect of a period of 5 years and each succeeding period of 5 years; and (b) that states the opinion of the actuary as to the minimum rate, or rates, of contribution to the fund by each employer contributing to the fund that is, or are, required in each year of income of the fund in the period concerned for the assets of the fund to be reasonably regarded as sufficient if the fund is terminated in the period: (i) to pay the minimum requisite benefits in respect of all members of the fund; and (ii) to meet any liability of the fund with a priority that is not less than a liability referred to in subparagraph (i); and (iii) to meet the administrative and other costs of operating the fund that would be payable from those assets on termination of the fund. "(2) A certificate begins to have effect: (a) in respect of the period of 5 years beginning on 1 July 1992: (i) if a certificate is expressed to take effect on a day on which another certificate is in force-on that day; or (ii) if subparagraph (i) does not apply: (A) in the case of a fund established on or after 1 July 1992- on the day on which the fund is established; and (B) in the case of a fund established before 1 July 1992-on 1 July 1993; and (b) in respect of a subsequent period of 5 years: (i) if a certificate is expressed to take effect on a day on which another certificate is in force-on that day; or (ii) if subparagraph (i) does not apply-at the beginning of that period. "(3) A certificate ceases to have effect: (a) if another certificate takes effect under subparagraph (2) (a) (i) or (2) (b) (i)-at the end of the day before the day on which the other certificate takes effect; and (b) in any other case-at the end of the period of 5 years for which the certificate is issued. "(4) The trustees of a fund must obtain a certificate in respect of a period of 5 years not less than 12 months before the end of the period to which any current certificate in respect of a period of 5 years relates. "(5) The trustees of a fund must give, as soon as practicable, a copy of a certificate issued under this regulation to the employer of a member of the fund who contributes to the fund in respect of the member. Limited certificates to be issued in certain circumstances "18V. (1) The trustees of a fund may obtain the certificate of an actuary in respect of a period of 12 months if the actuary is not able to issue a certificate for the purposes of regulation 18U for a period of 5 years. "(2) Subregulations 18U (1), (2) and (3) apply to a certificate issued under this regulation as if the references in paragraphs 18U (1) (a), (2) (a) and (b) and (3) (b) to a period of 5 years were a reference to the period of 12 months to which the certificate relates. "(3) The trustees of a fund must give a copy of a certificate issued under this regulation and of the statement referred to in subregulation (4) to the employer of a member of the fund who contributes to the fund in respect of the member. "(4) The statement accompanying the certificate must be signed by the actuary who issued the certificate and specify: (a) the reasons why he or she has not issued a certificate under regulation 18U; and (b) any action that, after having been taken by the trustees of the fund, the employer or another person specified in the statement, would enable the actuary to issue a certificate under regulation 18U. "(5) Subject to subregulation (6), the trustees of a fund must obtain a certificate in respect of a period of 12 months not less than 3 months before the end of the period to which any current certificate in respect of a period of 12 months relates. "(6) The trustees of a fund must not obtain a certificate in respect of a third, or subsequent, consecutive period of 12 months without the written approval of the Commissioner. Further certificates: variation of rules or payment to employers "18W. (1) The trustees of a fund must obtain a further certificate of an actuary, under regulation 18U or 18V, if: (a) the governing rules of the fund are altered to grant new or improved benefits to a member of the fund; or (b) a payment is made from the fund to an employer of a member. "(2) For the purposes of this regulation, regulation 18U applies to a further certificate as if a reference in that regulation: (a) to a certificate were a reference to a further certificate; and (b) to a period of 5 years were a reference to the period from the beginning of the day on which the actuary signs the further certificate to the end of the period of 5 years to which the current certificate issued under regulation 18U relates. "(3) For the purposes of this regulation, regulation 18V applies to a further certificate as if a reference in that regulation: (a) to a certificate were a reference to a further certificate; and (b) to a period of 12 months were a reference to the period from the beginning of the day on which the actuary signs the further certificate to the end of the period of 12 months to which the current certificate issued under regulation 18V relates. Contributions to funds not in accordance with certificates "18X. (1) In this regulation, 'fund' means a superannuation fund whose benefits are not guaranteed by the Commonwealth or by a State or Territory. "(2) If, in a year of income of a fund, an employer contributes to the fund: (a) in respect of a member or members of the fund; and (b) at a rate that is, or at rates that are, less than the rate or rates of contribution stated in the relevant certificate obtained under this Division; the trustees of the fund must not vest any further benefit in the member or members until the employer contributes to the fund the whole amount to be contributed in respect of the year of income within a period of 12 months of the end of that year: (c) in accordance with the certificate referred to in paragraph (b); or (d) in accordance with another certificate obtained under this Division. Financial year 1992-93: special provisions "18Y. (1) In spite of any other provision of this Division, this regulation applies in the financial year beginning on 1 July 1992 to a fund that was in operation on 30 June 1992. "(2) The rate at which contributions are made by an employer to a fund in respect of a member of the fund must not be less than the rate that is recommended in: (a) the latest actuarial investigation into the fund referred to in paragraph 17 (1) (a); or (b) an actuarial investigation that: (i) follows an actuarial investigation referred to in paragraph (a); and (ii) is not an actuarial investigation referred to in that paragraph; to be the minimum rate at which those contributions should be made to the fund.". 1992 No. 223 OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) - REG 9 9. New Schedule 9 9.1 Add at the end: "SCHEDULE 9 Regulation 18R FORMS FORM 1 INFORMATION RELATING TO A SUPERANNUATION FUND ESTABLISHED ON OR AFTER 1 JULY 1992 1. Tax File Number of the superannuation fund: 2. Name of the superannuation fund: 3. Details about a person who may be contacted about the superannuation fund: Name: Address: Telephone No.: Facsimile No.: 4. The date on which the fund was established: 5. State whether the trustees of the superannuation fund have received, or expect to receive, a contribution: (a) in respect of a member of the fund for the purposes of the Superannuation Guarantee (Administration) Act 1992 in an amount that does not exceed the minimum amount required by that Act so that superannuation guarantee charge is not payable by the employer making the contribution; or (b) as payment of the shortfall component in relation to the member. Signature of the trustee or of a trustee authorised by the trustees to sign the form: (Insert name of signatory below his or her signature) Date: (NOTE: If there is only 1 trustee, references in this form to 'trustees' are to be read as references to the trustee.) FORM 2 CERTIFICATE 1. The trustees of the superannuation fund certify that: (a) the governing rules of the fund meet the requirements of the Occupational Superannuation Standards Act 1987 and of the Occupational Superannuation Standards Regulations; and (b) the fund is operating in accordance with each of the following operational standards applicable to the fund: Code Description A Sole purpose test B Trustee conditions C Loans to members D Investments E Vesting of member-financed benefits F Vesting of employer-financed benefits G Preservation H Disclosure, reporting and fund records I Matters required in governing rules J Contributions K Payment of benefits L Application of forfeited benefits M Provision of information or documents N Minimum funding standard; and (c) they will use their best endeavours to ensure that the fund continues to operate in accordance with those standards. 2. The trustees undertake to notify the Insurance and Superannuation Commissioner immediately in writing if they become aware that the fund has ceased, or will cease, to operate in accordance with any of those standards.> Signature of the trustee or of a trustee authorised by the trustees to sign the form: (Insert name of a signatory below his or her signature) Date: (NOTE: - NOTES 1992 No. 223*1* OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS*2* (AMENDMENT) *1* Notified in the Commonwealth of Australia Gazette on 1 July 1992. *2* Statutory Rules 1987 No. 322 as amended by 1988 No. 255 (as am. 1989 No. 281); 1989 Nos. 24, 281 and 356; 1990 Nos. 149, 150, 185, 202 and 275; 1991 Nos. 16, 58, 148, 150, 155 and 458; 1992 Nos. 192 and 218.