Commonwealth Numbered Acts Commonwealth Numbered ActsSuperannuation Industry (Supervision) Act 1993
1 Section 4 (after table item dealing with Part No. 11)
Insert:
|
11A |
General fees rules |
2 Subparagraph 6(1)(a)(v)
Repeal the subparagraph, substitute:
(v) Parts 8 to 11A (other than section 99F);
3 Before subparagraph 6(1)(c)(ii)
Insert:
(iia) section 99F; and
4 Subsection 10(1)
Insert:
"activity fee" has the meaning given by subsection 29V(7).
5 Subsection 10(1)
Insert:
"administration fee" has the meaning given by subsection 29V(2).
6 Subsection 10(1)
Insert:
"advice fee" has the meaning given by subsection 29V(8).
7 Subsection 10(1)
Insert:
"buy-sell spread" has the meaning given by subsection 29V(4).
8 Subsection 10(1)
Insert:
"entry fee" has the meaning given by subsection 99B(2).
9 Subsection 10(1)
Insert:
"exit fee" has the meaning given by subsection 29V(6).
10 Subsection 10(1)
Insert:
"financial product" has the same meaning as in Chapter 7 of the Corporations Act 2001 .
11 Subsection 10(1)
Insert:
"financial product advice" has the same meaning as in Chapter 7 of the Corporations Act 2001 .
12 Subsection 10(1)
Insert:
"general fees rules" means the rules in Part 11A.
13 Subsection 10(1)
Insert:
"insurance fee" has the meaning given by subsection 29V(9).
14 Subsection 10(1)
Insert:
"investment fee" has the meaning given by subsection 29V(3).
15 Subsection 10(1)
Insert:
"personal advice" has the same meaning as in Chapter 7 of the Corporations Act 2001 .
16 Subsection 10(1)
Insert:
"switching fee" has the meaning given by subsection 29V(5).
17 At the end of paragraph 29S(2)(f)
Add:
; (iii) section 29SAC.
18 After section 29SAB
Insert:
29SAC Election not to charge MySuper members for payment of conflicted remuneration
(1) An RSE licensee that applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product makes an election in accordance with this section if:
(a) the RSE licensee elects that, if the authority is given, the RSE licensee will not charge any MySuper member a fee in relation to the MySuper product, all or part of which relates directly or indirectly to costs incurred by a trustee or the trustees of the fund:
(i) in paying conflicted remuneration to a financial services licensee, or a representative of a financial services licensee; or
(ii) in paying an amount to another person that a trustee of the fund knows, or reasonably ought to know, relates to conflicted remuneration paid by that other person to a financial services licensee, or a representative of a financial services licensee; and
(b) the election is in writing; and
(c) the election is in the approved form.
(2) In this section:
"conflicted remuneration" has the same meaning as in Part 7.7A of the Corporations Act 2001 , subject to the extension of that meaning in subsection (3).
"representative" , of a financial services licensee, has the same meaning as in Part 7.6 of the Corporations Act 2001 .
(3) In this section, conflicted remuneration also has the meaning it would have if:
(a) financial product advice provided to the RSE licensee mentioned in subsection (1) by a financial services licensee, or a representative of a financial services licensee, mentioned in subparagraph (1)(a)(i) or (ii) were provided to the RSE licensee as a retail client; and
(b) financial product advice provided to the other person mentioned in subparagraph (1)(a)(ii) by a financial services licensee, or a representative of a financial services licensee, mentioned in that subparagraph were provided to the other person as a retail client.
19 Paragraph 29T(1)(i)
After "is likely to comply with", insert "the general fees rules and".
20 Paragraph 29U(2)(d)
After "is likely to comply with", insert "the general fees rules and".
21 At the end of subsection 29U(2)
Add:
; or (k) APRA is satisfied that the RSE licensee has failed to give effect to an election made in accordance with section 29SAC (election not to pass costs of conflicted remuneration to MySuper members).
22 At the end of subsection 29V(1)
Add:
; (g) an advice fee;
(h) an insurance fee.
23 Subsection 29V(2)
Omit "the fund" (first occurring), substitute "a superannuation entity".
24 Subsection 29V(2)
Omit "the fund (that are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee or an activity fee)", substitute "the entity that:
(a) relate to the administration or operation of the fund; and
(b) are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee".
25 Subsection 29V(3)
Omit "the fund" (first occurring), substitute "a superannuation entity".
26 Paragraph 29V(3)(b)
Omit "the fund (that are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee or an activity fee)", substitute "the entity that:
(i) relate to the investment of assets of the entity; and
(ii) are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee".
27 Subsection 29V(4)
After "or the trustees,", insert "of a superannuation entity".
28 Subsection 29V(4)
Omit "the fund", substitute "the entity".
29 Subsection 29V(5)
Repeal the subsection, substitute:
(5) A switching fee is a fee to recover the costs of switching all or part of a member's interest in a superannuation entity from one class of beneficial interest in the entity to another.
30 Subsection 29V(6)
Omit "the fund", substitute "a superannuation entity".
31 Subsection 29V(7)
Repeal the subsection, substitute:
(7) A fee is an activity fee if:
(a) the fee relates to costs incurred by the trustee, or the trustees, of a superannuation entity that are directly related to an activity of the trustee, or the trustees:
(i) that is engaged in at the request, or with the consent, of a member; or
(ii) that relates to a member and is required by law; and
(b) those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.
(8) A fee is an advice fee if:
(a) the fee relates directly to costs incurred by the trustee, or the trustees, of a superannuation entity because of the provision of financial product advice to a member by:
(i) a trustee of the entity; or
(ii) another person acting as an employee of, or under an arrangement with, a trustee or trustees of the entity; and
(b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee , an activity fee or an insurance fee.
(9) A fee is an insurance fee if:
(a) the fee relates directly to either or both of the following:
(i) insurance premiums paid by the trustee, or the trustees, of a superannuation entity in relation to a member or members of the entity;
(ii) costs incurred by the trustee, or the trustees, of a superannuation entity in relation to the provision of insurance for a member or members of the entity; and
(b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefit to the member that is based on the performance of an investment rather than the realisation of a risk; and
(c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee.
32 Subsection 29VA(1)
After "may only charge a fee", insert "in relation to the MySuper product".
33 At the end of section 29VA
Add:
Advice fees
(9) This rule is satisfied if:
(a) the fee is an advice fee that relates directly to financial product advice provided to a member; and
(b) the member holds a MySuper product; and
(c) the fee is charged to the member.
Insurance fees
(10) This rule is satisfied if:
(a) the fee is an insurance fee that relates directly to either or both of the following:
(i) insurance premiums paid by the trustee, or the trustees, of a superannuation entity in relation to a member;
(ii) costs incurred by the trustee, or the trustees, of a superannuation entity in relation to the provision of insurance for a member; and
(b) the member holds a MySuper product; and
(c) the fee is charged to the member.
34 Paragraph 29VB(1)(d)
Repeal the paragraph, substitute:
(d) the fee is in accordance with subsection (2), (3) or (4); and
(e) the fee is in accordance with subsection (5).
35 At the end of section 29VB
Add:
(5) The total amount of the administration fee charged in relation to the employee members is at least equal to an amount that reasonably relates to costs that:
(a) are incurred by the trustee, or the trustees, of the fund in the administration and operation of the fund in relation to those members; and
(b) are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
36 At the end of Division 5 of Part 2C
Add:
29VC Activity fees and insurance fees to be charged on a cost recovery basis
(1) If the trustee, or the trustees, of a regulated superannuation fund charge an activity fee or an insurance fee to a member in relation to a MySuper product, the fee must be no more than it would be if it were charged on a cost recovery basis.
(2) The regulations may prescribe the way in which an activity fee or an insurance fee charged on a cost recovery basis is to be worked out.
(1) This section applies if:
(a) a regulated superannuation fund offers a MySuper product; and
(b) the trustee, or the trustees, of the fund enter into an arrangement with an investment manager for the investment of an asset or assets of the fund attributed, in whole or in part, to the MySuper product; and
(c) under the arrangement, a fee payable to the investment manager is determined, in whole or in part, by reference to the performance of the investments made by the investment manager on behalf of the trustee or trustees of the fund (a performance-based fee ).
(2) The trustee, or the trustees, of the regulated superannuation fund must ensure that the arrangement complies with this section.
Base fee must be set or adjusted to give incentive to obtain performance-based fee
(3) If, under the arrangement, a fee is or fees are payable to the investment manager in addition to the performance-based fee, the other fee or fees must be set or adjusted so that they are lower than they would be if the arrangement did not include the performance-based fee.
Period to which performance-based fee relates
(4) The period over which entitlement to the performance-based fee is determined under the arrangement must be appropriate to the kinds of investment to which the performance-based fee relates.
Performance of investment must be measured against an appropriate benchmark
(5) Under the arrangement, the performance of the investment must be measured by comparison with the performance of investments of a similar kind.
Performance-based fee to be worked out on after-costs, after-tax basis
(6) For the purposes of working out the performance-based fee payable under the arrangement, the performance of the investment must be determined on an after-costs and, where possible, an after-tax basis.
Disincentives to underperformance
(7) Under the arrangement, the performance-based fee must be calculated in a way that includes disincentives for poorly performing investments.
Best interests of MySuper members
(8) A trustee of a regulated superannuation fund does not breach this section to the extent that the asset or assets of the fund invested under the arrangement are attributed by the trustee or the trustees of the fund to a MySuper product if, despite the fact that the arrangement does not comply with one or more of the provisions of this section, the arrangement promotes the financial interests of the beneficiaries of the fund who hold the MySuper product.
37 After paragraph 31(2)(d)
Insert:
(da) the charging of fees (including the calculation of the amount of fees) to:
(i) members of a fund; and
(ii) members who hold a particular class of beneficial interest in a fund;
(db) the attribution of costs between classes of beneficial interest in a fund;
38 After section 33
Insert:
33A Relationship between operating standards, this Act and the regulations
(1) A standard applicable to the operation of a superannuation entity may be prescribed that elaborates, supplements or otherwise deals with any aspect of:
(a) a matter relating to the operation of the entity to which a covenant referred to in sections 52 to 53 or prescribed under section 54A relates; or
(b) a matter relating to the operation of the entity to which a provision of this Act or another provision of the regulations relates.
(2) However, a standard applicable to the operation of a superannuation entity is of no effect to the extent that it conflicts with this Act.
39 At the end of section 55B
Add:
;or (d) an election made in accordance with section 29SAC (election not to pass costs of paying conflicted remuneration onto MySuper members).
40 After Part 11
Add:
Part 11A -- General fees rules
The rules set out in this Part do not apply to self managed superannuation funds.
(1) The trustee, or the trustees, of a regulated superannuation fund or an approved deposit fund must not charge entry fees.
(2) An entry fee is a fee, other than a buy-sell spread, that relates, directly or indirectly, to the issuing of a beneficial interest in a superannuation entity to a person who is not already a member of the entity.
99C Buy-sell spreads, switching fees and exit fees to be charged on a cost recovery basis
(1) If the trustee, or the trustees, of a regulated superannuation fund or an approved deposit fund charge a buy-sell spread, a switching fee or an exit fee, the fee must be no more than it would be if it were charged on a cost recovery basis.
(2) The regulations may prescribe the way in which a buy-sell spread, a switching fee or an exit fee charged on a cost recovery basis is to be worked out.
99D Cost of advice to employers not to be borne by members
The trustee, or the trustees, of a regulated superannuation fund or an approved deposit fund must not include in any fee charged to any member of the fund an amount that relates to costs incurred by any person, directly or indirectly, in relation to personal advice provided by any person to an employer of one or more members of the fund.
If there is more than one class of beneficial interest in a regulated superannuation fund, the trustee, or the trustees, of the fund must attribute the costs of the fund between the classes fairly and reasonably.
99F Cost of financial product advice
(1) The trustee or the trustees of a regulated superannuation fund must not directly or indirectly pass the cost of providing financial product advice in relation to a member of the fund (the subject member ) on to any other member of the fund, to the extent that:
(a) the advice is provided by:
(i) a trustee of the fund; or
(ii) another person acting as an employee of, or under an arrangement with, a trustee or trustees of the fund; and
(b) the advice is personal advice; and
(c) the advice is provided in any of the following circumstances:
(i) the subject member has not yet acquired a beneficial interest in the fund when the advice is given, and the advice relates to whether the subject member should acquire such an interest;
(ii) the advice relates to a financial product that is not a beneficial interest in the fund, a related pension fund for the member and the fund, a related insurance product for the member and the fund or a cash management facility within the fund;
(iii) the advice relates to whether the subject member should consolidate that member's beneficial interests in 2 or more superannuation entities into a beneficial interest in a single superannuation entity;
(iv) at the time the advice is provided, the subject member reasonably expects that a person mentioned in subparagraph (a)(i) or (ii) will periodically review the advice, provide further personal advice or monitor whether recommendations in the original or any later advice are implemented and the results of that implementation;
(v) other prescribed circumstances.
(2) If:
(a) under the governing rules of a regulated superannuation fund (the first fund ):
(i) a member of another regulated superannuation fund (the second fund ) is entitled to become a member of the first fund on the satisfaction of a condition of release of benefits specified in a standard made under paragraph 31(2)(h); and
(ii) on becoming a member of the first fund, a pension would be payable out of the assets of the first fund to the member; and
(b) the RSE licensee for the first fund is, or is an associate of, the RSE licensee of the second fund;
then the first fund is a related pension fund of the second fund for a member of the second fund in relation to whom paragraph (a) is satisfied.
(3) If:
(a) the trustee, or the trustees, of a regulated superannuation fund provide a benefit to members of the fund who hold a particular class of beneficial interest in the fund by taking out insurance; and
(b) a person holds a beneficial interest of that class in the fund, or is considering acquiring a beneficial interest of that class in the fund;
a life policy or contract of insurance by which that benefit is or would be provided is a related insurance product for the person and the fund.
(4) In this section:
"cash management facility" has the same meaning as it has for the purposes of subsection 946B(1) of the Corporations Act 2001 .
"life policy" has the same meaning as in the Life Insurance Act 1995 .
41 Application of general fees rules
(1) Subject to subitems (2) and (3), the amendment made by item 40 of this Schedule applies in relation to:
(a) fees charged, and costs passed on, to members of regulated superannuation funds and approved deposit funds on and after 1 July 2013; and
(b) costs attributed to classes of beneficial interest in a regulated superannuation fund on and after 1 July 2013.
(2) The amendment made by item 40 of this Schedule does not apply to a fee charged, or a cost passed on, to a member of a regulated superannuation fund or an approved deposit fund to the extent that it relates to a life policy if:
(a) the life policy is one under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested; and
(b) the member was covered under the life policy immediately before 1 July 2013.
(3) The amendment made by item 40 of this Schedule does not apply to a fee charged, or a cost passed on, to a member of a regulated superannuation fund or an approved deposit fund to the extent that it relates to an investment account contract if:
(a) the investment account contract is one under which the only beneficiaries are the member, and relatives and dependants of the member; and
(b) the investment account contract was in force immediately before 1 July 2013.
(4) In this item:
investment account contract has the same meaning as in the Life Insurance Act 1995 .
life policy has the same meaning as in the Life Insurance Act 1995 .