Commonwealth Consolidated Acts

SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 68AA

Requirement to provide permanent incapacity benefit and death benefit by taking out insurance

  (1)   Each trustee of a regulated superannuation fund must ensure the following:

  (a)   that the fund provides permanent incapacity benefit to each MySuper member of the fund;

  (b)   that the fund provides death benefit in respect of each MySuper member of the fund;

  (c)   that the benefits referred to in paragraphs   (a) and (b) are provided by taking out insurance.

Note:   A failure to comply with subsection   (1) is a breach of a condition of the RSE licence (see paragraph   29E(1)(a)).

  (2)   The trustees of a regulated superannuation fund are not required to provide permanent incapacity benefit or death benefit if the conditions determined under subsection   (3) in relation to the benefit are not met.

  (3)   The trustees of a regulated superannuation fund may determine reasonable conditions to which the provision of:

  (a)   permanent incapacity benefit; or

  (b)   death benefit;

is subject.

  (4)   Without limiting subsection   (3), conditions determined under subsection   (3) in relation to a benefit are reasonable if they are the same as the terms and conditions of the policy of insurance taken out to provide the benefit.

Requirement to allow MySuper members to elect not to receive permanent incapacity benefit or death benefit

  (5)   Each trustee of a regulated superannuation fund must ensure that each MySuper member of the fund may elect either or both of the following:

  (a)   that permanent incapacity benefit will not be provided to the member by the fund;

  (b)   that death benefit will not be provided in respect of the member by the fund.

Note:   A failure to comply with subsection   (5) is a breach of a condition of the RSE licence (see paragraph   29E(1)(a)).

  (6)   The trustees of a regulated superannuation fund may require that MySuper members who wish to make an election in accordance with subsection   (5):

  (a)   must make the election in relation to both permanent incapacity benefit and death benefit; or

  (b)   must make the election in relation to death benefit if they make the election in relation to permanent incapacity benefit.

  (7)   Subsection   (5) does not apply to a MySuper member of a regulated superannuation fund if the circumstances prescribed by the regulations for the purposes of this subsection are met.

  (8)   If a MySuper member of a regulated superannuation fund makes an election in accordance with subsection   (5) in relation to a benefit, subsection   (1) does not apply in relation to the member and the benefit.

Inactive accounts, low - balance accounts and members under the age of 25 years

  (8A)   This section does not require the provision of death benefit in respect of a MySuper member of a regulated superannuation fund, if death benefit is not to be provided in respect of the MySuper member by taking out or maintaining insurance because of section   68AAA, 68AAB or 68AAC.

  (8B)   This section does not require the provision of permanent incapacity benefit to a MySuper member of a regulated superannuation fund, if permanent incapacity benefit is not to be provided in respect of the MySuper member by taking out or maintaining insurance because of section   68AAA, 68AAB or 68AAC.

  (9)   This section does not apply to:

  (a)   a defined benefit member; or

  (b)   an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015 ) who is:

  (i)   a member of the Permanent Forces (within the meaning of that Act); or

  (ii)   a continuous full - time Reservist (within the meaning of that Act); or

  (c)   a person who would be an ADF Super member covered by paragraph   (b) of this subsection apart from the fact that the regulated superannuation fund is or was, for the purposes of Part   3A of the Superannuation Guarantee (Administration) Act 1992 , a chosen fund for contributions for the person's superannuation by the Commonwealth.

Death benefit and permanent incapacity benefit

  (10)   For the purposes of this Act:

"death benefit" means a benefit provided in respect of a member of a regulated superannuation fund in, and only in, the event of the death of the member.

"permanent incapacity benefit" means a benefit provided to a member of a regulated superannuation fund if, and only if, the member is suffering permanent incapacity.