SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 NO. 83 SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 NO. 83 - TABLE OF PROVISIONS 1. Commencement 2. Amendment 3. Regulation 1.03 (Interpretation) 4. Regulation 1.04 (Section 10 of the Act-prescribed matters) 5. Regulation 2.08 (Application) 6. Regulation 2.29 (Specific requirements in particular cases) 7. Regulation 2.41 (Specific requirements) 8. Division 2.6A (Information in respect of inquiries and complaints) 9. Regulation 2.41A (Application) 10. Regulation 2.41B (Information in respect of inquiries and complaints) 11. Regulation 4.08 (Operating standard-voting rule where equal representation applies) 12. Regulation 5.01 (Interpretation) 13. Regulation 6.01 (Interpretation) 14. New regulation 6.15A 15. Regulation 6.16 (Redistribution of member benefits within a fund in certain circumstances by operation of governing rules or action of trustee) 16. Regulation 6.21 (Compulsory cashing of benefits in regulated superannuation funds) 17. Regulation 6.25 (Compulsory cashing of benefits in approved deposit funds) 18. Regulation 13.14 (Charges over assets of funds) 19. New regulation 13.15A 20. Schedule 1AA (Part 1-Exempt public sector superannuation schemes (1994-95 and 1995-96 years of income)) 21. Schedule 1AA (Part 2-Exempt public sector superannuation schemes (1996-97 year of income and subsequent years of income)) SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 1 1. Commencement 1.1 Regulation 15 commences on 1 November 1998. 1.2 The remainder of these Regulations commence on gazettal. SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 2 2. Amendment 2.1 The Superannuation Industry (Supervision) Regulations are amended as set out in these Regulations. SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 3 3. Regulation 1.03 (Interpretation) 3.1 Subregulation 1.03 (1) (definition of "reviewable decision"): After paragraph (ba), insert: "(bb) to specify a day under regulation 12.08; or". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 4 4. Regulation 1.04 (Section 10 of the Act-prescribed matters) 4.1 Subregulation 1.04 (4D): Omit ", and subsequent years of income,". 4.2 After subregulation 1.04 (4D), insert: "(4E) Subregulation (4A) applies in relation to a scheme specified in Part 3 of Schedule 1AA during the 1997-1998 year of income, and subsequent years of income, of that scheme.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 5 5. Regulation 2.08 (Application) 5.1 Subregulation 2.08 (2): Omit the subregulation. Note Note 2 in the notes following regulation 2.08 should be replaced by the following note: Note 2 The purpose of the 'information' provisions in relation to approved deposit funds (other than excluded approved deposit funds) and public offer superannuation funds is to prescribe information that, under Subdivision 3A of Part 19 of the Act, must be given before a public offer entity does certain acts; see sections 157, 157A and 158. In certain circumstances, that information is not required; see subsections 157 (3), (4) and (5) of the Act and subregulation 2.09 (2).". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 6 6. Regulation 2.29 (Specific requirements in particular cases) 6.1 Subregulation 2.29 (1): After paragraph 2.29 (1) (g), insert: "(ga) if the derivatives charge ratio of the fund (as defined in subregulation (5)) exceeded 5% at any time during the reporting period: (i) the derivatives charge ratio as at the end of the reporting period; and (ii) the highest derivatives charge ratio attained during the reporting period; and (iii) an explanation of why the derivatives charge ratio exceeded 5%; and (iv) an explanation of the meaning of 'derivatives charge ratio' in, or to the effect of, the following: 'The derivatives charge ratio is the percentage of the total market value of the assets of the fund (other than cash) that the trustee has charged as security for derivatives investments made by the trustee.';". 6.2 Add at the end: "(5) For the purposes of paragraph (1) (ga), the derivatives charge ratio of a fund is: X - Y expressed as a percentage, where: X is the market value of the assets of the fund (other than cash) that are subject to a charge in relation to a derivatives contract (as defined in subregulation 13.15A (2)); and Y is the market value of all the assets of the fund. "(6) If paragraph (1) (ga) applies, the trustee must give the information mentioned in that paragraph to the Commissioner as soon as practicable, and in any event within 6 months, after the end of the reporting period to which the information relates.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 7 7. Regulation 2.41 (Specific requirements) 7.1 Subregulation 2.41 (2): After "subregulation 2.40 (3))", insert "or an employer-sponsor". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 8 8. Division 2.6A (Information in respect of inquiries and complaints) 8.1 Heading: Omit "in respect of inquiries and", substitute "about". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 9 9. Regulation 2.41A (Application) 9.1 Subregulation 2.41A (1): Omit "an inquiry or complaint", substitute "a complaint". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 10 10. Regulation 2.41B (Information in respect of inquiries and complaints) 10.1 Omit the regulation, substitute: Information about complaints "2.41B. The trustee must give to the person, at the time when the trustee makes a decision in relation to the complaint, details of the existence and (in outline terms) the functions of the Superannuation Complaints Tribunal.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 11 11. Regulation 4.08 (Operating standard-voting rule where equal representation applies) 11.1 Subregulation 4.08 (2): Omit the subregulation, substitute: "(2) Despite subregulation (1), the standard stated in subregulation (3) is not applicable: (a) to the operation of standard employer-sponsored funds that comply with the alternative agreed representation rule set out in subsection 90 (4) or 92 (5) of the Act; or (b) to a decision of a delegate of the individual trustees or of the board of directors of the corporate trustee of the fund if the delegation was approved by at least two-thirds of the total number of the trustees or directors.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 12 12. Regulation 5.01 (Interpretation) 12.1 Subregulation 5.01 (1) (definition of "deferred annuity", subparagraph (b) (i)): Omit the subparagraph, substitute: "(i) that payment of benefits under the annuity: (A) is not commenced earlier than the time when Part 6 permits or requires the benefits to be paid from an approved deposit fund; and (B) is to commence as soon as practicable after the annuitant attains (or, if the annuitant has died, would have attained) age 65; and". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 13 13. Regulation 6.01 (Interpretation) 13.1 Subregulation 6.01 (2): Insert the following definition: "transitional period, in relation to a superannuation fund, means the period beginning at the beginning of the fund's 1994-1995 year of income and ending: (a) in the case of a public sector superannuation scheme-at the end of the day when the scheme became an exempt public sector superannuation scheme; or (b) in any other case-at the end of the day when the trustee of the fund lodges an election under section 19 of the Act.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 14 14. New regulation 6.15A 14.1 After regulation 6.15, insert: Certain benefits taken to be unrestricted non-preserved benefits "6.15A. Benefits in a fund are unrestricted non-preserved benefits if: (a) during the transitional period of the fund, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a 'Nil' cashing restriction if these Regulations applied; or (b) both: (i) the benefits were rolled over or transferred to the fund from: (A) a superannuation fund (Fund A) during its transitional period; or (B) a regulated superannuation fund or an approved deposit fund to which the benefits were rolled over or transferred from a superannuation fund (Fund B) during its transitional period; and (ii) the trustee is reasonably satisfied that: (A) during the transitional period of Fund A or Fund B, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a 'Nil' cashing restriction if these Regulations applied; or (B) before the benefits were rolled over or transferred to Fund A or Fund B from a regulated superannuation fund or an approved deposit fund, the relevant cashing restriction set out in Schedule 1 in respect of the benefits was 'Nil'.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 15 15. Regulation 6.16 (Redistribution of member benefits within a fund in certain circumstances by operation of governing rules or action of trustee) 15.1 Subregulation 6.16 (2): After "but", insert ", subject to subregulation (3),". 15.2 Add at the end: "(3) The trustee may alter the category of benefits in a fund from preserved benefits to unrestricted non-preserved benefits if: (a) before the commencement of regulation 6.15A and during the transitional period of the fund, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a 'Nil' cashing restriction if these Regulations applied; or (b) before the commencement of regulation 6.15A, both: (i) the benefits were rolled over or transferred to the fund from: (A) a superannuation fund (Fund A) during its transitional period; or (B) a regulated superannuation fund or an approved deposit fund to which the benefits were rolled over or transferred from a superannuation fund (Fund B) during its transitional period; and (ii) the trustee is reasonably satisfied that: (A) during the transitional period of Fund A or Fund B, there arose in relation to the benefits a circumstance that would have resulted in the satisfaction of a condition of release and a 'Nil' cashing restriction if these Regulations applied; or (B) before the benefits were rolled over or transferred to Fund A or Fund B from a regulated superannuation fund or an approved deposit fund, the relevant cashing restriction set out in Schedule 1 in respect of the benefits was 'Nil'.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 16 16. Regulation 6.21 (Compulsory cashing of benefits in regulated superannuation funds) 16.1 Paragraph 6.21 (2) (a) Omit the paragraph, substitute: "(a) in respect of each person to whom benefits are cashed: (i) a single lump sum; or (ii) an interim lump sum (not exceeding the amount of the benefits ascertained at the date of an event mentioned in subregulation (1) or (1A)) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event).". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 17 17. Regulation 6.25 (Compulsory cashing of benefits in approved deposit funds) 17.1 Subregulation 6.25 (2): Omit the subregulation, substitute: "(2) The form in which benefits may be cashed under this regulation is, in respect of each person to whom benefits are cashed: (a) a single lump sum; or (b) an interim lump sum (not exceeding the amount of the benefits ascertained at the date of an event mentioned in subregulation (1)) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event).". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 18 18. Regulation 13.14 (Charges over assets of funds) 18.1 Omit "subject to regulation 13.15,", insert "subject to regulations 13.15 and 13.15A,". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 19 19. New regulation 13.15A 19.1 After regulation 13.15, insert: Charges in relation to certain derivatives contracts "13.15A. (1) A trustee may give a charge over, or in relation to, an asset of a fund if: (a) the charge is given in relation to a derivatives contract entered into: (i) by, or on behalf of, the trustee; or (ii) by a broker on the instructions, or on account , of the trustee; or (iii) by a broker for the benefit of the trustee; and (b) the charge is given in order to comply with the rules of an approved body (as defined in subregulation (2)) that requires the performance of obligations in relation to the derivatives contract to be secured; and (c) the fund has in place a risk management statement that sets out: (i) policies for the use of derivatives that include an analysis of the risks associated with the use of derivatives within the investment strategy of the fund; and (ii) restrictions and controls on the use of derivatives that take into consideration the expertise of staff; and (iii) compliance processes to ensure that the controls are effective (for example, reporting procedures, internal and external audits and staff management procedures); and (d) the investment to which the charge relates is made in accordance with the risk management statement. "(2) In this regulation: approved body means: (a) Australian Stock Exchange Ltd; (b) Options Clearing House Pty Ltd; (c) Sydney Futures Exchange Ltd; (d) Sydney Futures Exchange Clearing House Pty Ltd; (e) a body that is an approved foreign exchange within the meaning of regulation 1.2A.02 of the Corporations Regulations; (f) a body specified in Schedule 11 of the Corporations Regulations; (g) a body that performs clearing house functions in relation to a body mentioned in paragraph (e) or (f) (the second body) in accordance with the rules of the second body or a law of the country where the second body is situated. derivative means a financial asset or liability the value of which depends on, or is derived from, other assets, liabilities or indices. derivatives contract means an option contract or futures contract relating to any right, liability or thing, including in particular: (a) an option contract as defined in section 9 of the Corporations Law; and (b) a futures contract within the meaning of section 72 of the Corporations Law; and (c) an agreement to which section 72A or 92A of the Corporations Law applies.". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 20 20. Schedule 1AA (Part 1-Exempt public sector superannuation schemes (1994-95 and 1995-96 years of income)) 20.1 Omit "Schemes established by or under:" (wherever occurring), substitute "Schemes established by or operated under:". 20.2 Under the heading "COMMONWEALTH", insert the following Act: "Defence Act 1903". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - REG 21 21. Schedule 1AA (Part 2-Exempt public sector superannuation schemes (1996-97 year of income and subsequent years of income)) 21.1 Omit the Part, substitute: "PART 2-EXEMPT PUBLIC REGR SUPERANNUATION SCHEMES (1996-97 YEAR OF INCOME) COMMONWEALTH Schemes established by or operated under: Defence Act 1903 Defence Force Retirement and Death Benefits Act 1973 Governor-General Act 1974 Judges' Pensions Act 1968 Parliamentary Contributory Superannuation Act 1948 NEW SOUTH WALES Schemes established by or operated under: First State Superannuation Act 1992 Judges' Pensions Act 1953 Local Government and Other Authorities (Superannuation) Act 1927 New South Wales Retirement Benefits Act 1972 Parliamentary Contributory Superannuation Act 1971 Police Regulation (Superannuation) Act 1906 Public Authorities Superannuation Act 1985 Public Sector Executives Superannuation Act 1989 State Authorities Non-contributory Superannuation Act 1987 State Authorities Superannuation Act 1987 State Public Service Superannuation Act 1985 Superannuation Act 1916 Superannuation Administration Act 1996 Transport Employees Retirement Benefits Act 1967 VICTORIA Schemes established by or operated under: Attorney General and Solicitor General Act 1972 Coal Mines (Pensions) Act 1958 Constitution Act 1975 County Court Act 1958 County Court (Jurisdictions) Act 1968 Emergency Services Superannuation Act 1986 Hospitals Superannuation Act 1988 Justices Act 1958 Local Authorities Superannuation Act 1988 Magistrates (Summary Proceedings) Act 1975 Mint Act 1958 Ombudsman Act 1973 Parliamentary Salaries and Superannuation Act 1968 Port of Geelong Authority Act 1958 Port of Melbourne Authority Act 1958 Public Prosecutions Act 1994 Public Sector Superannuation (Administration) Act 1993 State Superannuation Act 1988 Supreme Court Act 1986 QUEENSLAND Government Officers' Superannuation Scheme (GoSuper) Governors' Pension Scheme Judges Pension Scheme Parliamentary Contributory Superannuation Fund Police Superannuation Fund (Police Super) Queensland Fire Service Superannuation Plan State Public Sector Superannuation Scheme (Q Super) State Service Superannuation Fund (State Super) SOUTH AUSTRALIA Schemes established by or operated under: Electricity Corporations Act 1994 Governors' Pensions Act 1976 Judges' Pensions Act 1971 Parliamentary Superannuation Act 1974 Police Superannuation Act 1990 Southern State Superannuation Act 1994 Superannuation Act 1988 Superannuation (Benefit Scheme) Act 1992 Schemes established by or under trust deeds Lyell McEwen Health Service Incorporated Superannuation Fund Police Occupational Superannuation Scheme WESTERN AUSTRALIA Schemes established by or operated under: Government Employees Superannuation Act 1987 Judges' Salaries and Pensions Act 1950 Parliamentary Superannuation Act 1970 Superannuation and Family Benefits Act 1938 TASMANIA Schemes established by or operated under: Governor of Tasmania Act 1982 Judges' Contributory Pensions Act 1968 Parliamentary Retiring Benefits Act 1985 Parliamentary Superannuation Act 1973 Retirement Benefits Act 1993 Solicitor-General Act 1983 AUSTRALIAN CAPITAL TERRITORY Schemes established by or operated under: Superannuation (Legislative Assembly Members) Act 1991 NORTHERN TERRITORY Schemes established by or operated under: Administrators Pension Act 1981 Legislative Assembly Members' Superannuation Act 1979 Superannuation Act 1986 Supreme Court (Judges Pensions) Act 1980 Other schemes Northern Territory Police Supplementary Benefit Scheme Northern Territory Supplementary Superannuation Scheme "PART 3-EXEMPT PUBLIC REGR SUPERANNUATION SCHEMES (1997-98 YEAR OF INCOME AND SUBSEQUENT YEARS OF INCOME) COMMONWEALTH Schemes established by or operated under: Defence Act 1903 Defence Force Retirement and Death Benefits Act 1973 Governor-General Act 1974 Judges' Pensions Act 1968 Parliamentary Contributory Superannuation Act 1948 NEW SOUTH WALES Schemes established by or operated under: First State Superannuation Act 1992 Judges' Pensions Act 1953 Local Government and Other Authorities (Superannuation) Act 1927 New South Wales Retirement Benefits Act 1972 Parliamentary Contributory Superannuation Act 1971 Police Regulation (Superannuation) Act 1906 Public Authorities Superannuation Act 1985 Public Sector Executives Superannuation Act 1989 State Authorities Non-contributory Superannuation Act 1987 State Authorities Superannuation Act 1987 State Public Service Superannuation Act 1985 Superannuation Act 1916 Superannuation Administration Act 1996 Transport Employees Retirement Benefits Act 1967 VICTORIA Schemes established by or operated under: Attorney General and Solicitor General Act 1972 Coal Mines (Pensions) Act 1958 Constitution Act 1975 County Court Act 1958 County Court (Jurisdictions) Act 1968 Emergency Services Superannuation Act 1986 Hospitals Superannuation Act 1988 Justices Act 1958 Local Authorities Superannuation Act 1988 Magistrates (Summary Proceedings) Act 1975 Mint Act 1958 Ombudsman Act 1973 Parliamentary Salaries and Superannuation Act 1968 Public Prosecutions Act 1994 Public Sector Superannuation (Administration) Act 1993 State Superannuation Act 1988 Supreme Court Act 1986 QUEENSLAND Governors' Pension Scheme Judges Pension Scheme Parliamentary Contributory Superannuation Fund State Public Sector Superannuation Scheme (Q Super) SOUTH AUSTRALIA Schemes established by or operated under: Electricity Corporations Act 1994 Governors' Pensions Act 1976 Judges' Pensions Act 1971 Parliamentary Superannuation Act 1974 Police Superannuation Act 1990 Southern State Superannuation Act 1994 Superannuation Act 1988 Superannuation (Benefit Scheme) Act 1992 Schemes established by or under trust deeds Lyell McEwen Health Service Incorporated Superannuation Fund Police Occupational Superannuation Scheme WESTERN AUSTRALIA Schemes established by or operated under: Government Employees Superannuation Act 1987 Judges' Salaries and Pensions Act 1950 Parliamentary Superannuation Act 1970 Superannuation and Family Benefits Act 1938 TASMANIA Schemes established by or operated under: Governor of Tasmania Act 1982 Judges' Contributory Pensions Act 1968 Parliamentary Retiring Benefits Act 1985 Parliamentary Superannuation Act 1973 Retirement Benefits Act 1993 Solicitor-General Act 1983 AUSTRALIAN CAPITAL TERRITORY Schemes established by or operated under: Superannuation (Legislative Assembly Members) Act 1991 NORTHERN TERRITORY Schemes established by or operated under: Administrators Pension Act 1981 Legislative Assembly Members' Superannuation Act 1979 Superannuation Act 1986 Supreme Court (Judges Pensions) Act 1980 Other schemes Northern Territory Police Supplementary Benefit Scheme Northern Territory Supplementary Superannuation Scheme". SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - NOTE 1 *1* Notified in the Commonwealth of Australia Gazette on 5 May 1998. SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1998 No. 83 - NOTE 2 *2* Statutory Rules 1994 No. 57 as amended by 1994 Nos. 189 and 432; 1995 Nos. 47, 64, 142, 158, 159, 240, 293, 384 and 430; 1996 Nos. 44, 57, 122 and 344; 1997 Nos. 69, 117, 152, 153, 221, 243, 293, 309, 343 and 415; 1998 No. 76. - NOTES SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS*2* (AMENDMENT) 1998 No. 83*1* - Dated 28 April 1998