Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]


OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT) 1991 NO. 150

EXPLANATORY STATEMENT

Statutory Rules 1991 No. 150

ISSUED BY AUTHORITY OF THE TREASURER

OCCUPATIONAL SUPERANNUATION STANDARDS ACT 1987

OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS (AMENDMENT)

LEGISLATIVE BASIS FOR THE REGULATIONS

Section 22 of the Occupational Superannuation Standards Act 1987 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

BACKGROUND

The Act provides operating standards and other relevant conditions with which superannuation funds, approved deposit funds and pooled superannuation trusts are required to comply in order to be eligible for taxation concessions under the Income Tax Assessment Act 1936.

The Regulations amend the Occupational Superannuation Standards Regulations (the Principal Regulations) to give effect to changes to the operating standards recently announced by the Government. The background to those changes is given below.

The amendments were developed in consultation with representatives of the superannuation industry, and related professional organisations.

DETAILS OF THE REGULATIONS

Regulation 1 provides that subregulation 5.2 operates from 2 July 1990 to correct an anomaly created by an earlier amendment; subregulations 3.1, 3.5, 3.6, 5.1, 5.3, 5.4, and 5.5 take effect from 1 July 1991 (since it is administratively desirable if the provisions apply for a full financial year); the remainder of the proposed regulations are effective from the date of gazettal.

Regulation 2 is a formal provision.

Regulation 3 amends existing regulation 3 by inserting a number of new definitions in the Principal Regulations and by making several grammatical changes.

Regulation 4 amends existing subregulations 5AC(2), (3) and (4) to make it clear that, where a benefit becomes payable in accordance with the provisions of the Principal Regulations, if it is a lump sum benefit it may or must be paid in full, and if it is a pension benefit it may or must commence to be paid. It also amends subregulation 5AC(3) to extend the transitional provisions applying to members of funds established under former paragraph 23 (ja) of the Income Tax Assessment Act 1936 to all persons who are members of such funds as at 1 July 1991.

Regulation 5 amends regulation 9 so that the application of the preservation requirement to member-financed benefits is made clear. The regulation:

       provides that benefits arising from contributions made by a member to a fund during any period in which the member did not have employer support in the fund are preservable if that period commenced on or after 13 March 1989 (if the fund is a private sector fund) or on or after 1 July 1990 (if the fund is a public sector fund);

       provides that from 2 July 1990 where the only employer support that a member of a fund has in that fund is award superannuation, and the member has other, non-award support in another fund which is not an eligible scheme, preservation does not apply to the benefits arising from the member's contributions. This amendment would operate with retrospective effect to overcome an unintended effect caused by a previous amendment. The amendment would have the effect of not requiring the preservation of certain benefits which were previously required to be preserved. The amendment is not detrimental to any person;

       inserts a definition of a member having employer support in a fund during a period to mean that, during that period, the person acquired an entitlement or a potential entitlement to receive employer financed benefits from the fund other than those arising from award superannuation contributions;

       defines "potential entitlement" as meaning an entitlement to benefits which only vest in the member on the occurrence of an event specified in the governing rules of a fund;

       amends existing subregulation 9(2) to refer to both subregulations 9(3) and 9(4). The current reference is only to subregulation 9(3); and

       replaces existing subregulation 9(4) to require that all benefits arising from contributions made by a member to an eligible scheme must be preserved.

Regulation 6 amends existing regulation 13 to remove the references to establishment dates of funds, so that the regulation applies to all large funds. The proposed regulation also clarifies the application of the equal trustee representation requirement to cases where a body corporate acts as sole trustee of a large superannuation fund, and introduces a transitional arrangement for the period before 1 July 1995, which in effect provides for the continuation of current requirements until that date.


[Index] [Related Items] [Search] [Download] [Help]