Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1995 NO. 240

STATUTORY RULES 1995 No. 240

Issued by the authority of the Treasurer

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Regulations (Amendment)

The Superannuation Industry (Supervision) Act 1993 (the Act) and the Superannuation Industry (Supervision) Regulations (the Principal Regulations) provide for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by the Insurance and Superannuation Commissioner.

Section 353 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.

These regulations amend the Principal Regulations by inserting a new schedule into the Principal Regulations for the purpose of listing those Public Sector superannuation schemes that are exempt from the Act and Principal Regulations in respect of their 1994/95 and 1995/96 years of income.

By way of background, the Commonwealth is negotiating with the States and Territories on the means by which State and Territory public sector superannuation schemes will conform to the principles of the Superannuation Industry (Supervision) (SIS) legislation without formally being subject to the SIS Act. This recognises that these public sector superannuation schemes are already subject to State and Territory Government supervision. Accordingly, the SIS Act contains a provision for regulations to be made specifying certain schemes as 'exempt public sector schemes'.

Public sector schemes which are not "complying superannuation funds" during a year of income do not count for superannuation guarantee (SG) purposes during that year and also lose tax concessions for the year.

In order for a public sector scheme to be a complying superannuation fund for a year of income it must either:

(i)       be categorised as an exempt public sector scheme for the whole of that year of income; or

(ii)       elect to be regulated under SIS.

In practice, the public sector schemes listed in Schedule 1AA have not elected to be regulated under SIS. As these funds have received contributions intended to satisfy SG obligations, they will need to be exempted from SIS. If the schemes are not exempted for the 1994/95 and 1995/96 years of income, then the SG contributions made by the relevant State and Territory employers will not count, and the employers will become liable to a further SG charge.

Negotiations between the states and Territories and the Commonwealth have not been finalised. As a temporary measure, the proposed regulation amendment ensures that the listed public sector schemes will be complying superannuation schemes for taxation and SG purposes until the end of the 1995/96 year of income.

The regulations are described in detail in the attachment.

The regulations commence on gazettal.

ATTACHMENT

Superannuation Industry (Supervision) Regulations (Amendment)

Regulation 1 - Amendment

Regulation 1 provides that the Superannuation Industry (Supervision) Regulations (the Principal Regulations) are amended as set out in these Regulations.

The Regulations will commence on gazettal.

Regulation 2 - Regulation 1.04 (Section 10 of the Act - prescribed matters)

Regulation 1.04 of the Principal Regulations prescribes matters for the purposes of various definitions in section 10 of the Act.

Subregulation 1.04(4A) provides that for the purposes of the definition of "exempt public sector scheme" in section 10 of the Act, the schemes listed in Schedule 1AA are specified.

Subregulation 1.04(4B) provides that if a scheme listed in schedule 1AA is renamed, that the reference to that scheme includes the scheme as it is renamed.

Subregulation 1.04(4C) provides that subregulation (4A) has effect in relation to the 1994-95 and 1995-96 years of income.

Regulation 3 - New Schedule 1AA

Regulation 3 inserts the new Schedule 1AA which lists those Public Sector superannuation schemes which will be exempt from the requirements of the Act and Principal Regulations in respect of their 1994-95 and 1995-96 years of income.