Commonwealth Numbered Regulations - Explanatory Statements

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

SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1997 NO.221

STATUTORY RULES 1997 No. 221

Issued by the authority of the Assistant Treasurer

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Regulations (Amendment)

Section 353 of the Superannuation Industry (Supervision) Act 1993 (the Act) provides that the Governor-General may make Regulations for the purposes of the Act

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.

The Regulations are necessary! as a consequence of the enactment of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTAC Act) and related Acts which implements; the 1996-97 Budget initiative to introduce a superannuation contributions surcharge (the surcharge) for high income earners, payable on their superannuation contributions. The SCTAC Act provides that the surcharge is, in most instances. liable to be paid by the superannuation provider (for example, the trustee of the superannuation fund) who received the superannuation contributions.

Subregulation 13.16(1) of the Principal Regulations provides that the accrued benefits of a member of a regulated superannuation fund must not be adversely altered by an amendment to the governing rules of the fund, or by an act carried out or consented to by the trustee of the fund, except in certain circumstances (prescribed in subregulation 13.16(2)).

Regulation 2 amends subregulation 13.16(2) of the Principal Regulations to insert a new exception to the general prohibition in subregulation 13.16(1) of the Principal Regulations. This will remove the restriction on trustees adversely altering the accrued benefits of members where the alteration serves to enable the trustee to be reimbursed for an amount paid, or to be paid, under the SCTAC Act or the Superannuation Contributions Tax (Imposition) Act 1997, or to charge interest on the amount paid before the reimbursement. The alteration may only affect the benefits of members in respect of whom surcharge assessments under section 15 of the SCTAC Act have been made. (Section 15 of the SCTAC Act provides for the Commissioner of Taxation to make an assessment of liability to pay surcharge).

That is, the general effect of regulation 2 is to remove the restriction on trustees reducing the accrued benefits of members through an amendment to the governing rules to enable the trustee to recover surcharge amounts paid, or to be paid, or interest on that amount. It does not require the governing rules of the fund to be altered, nor authorise the reduction of member's benefits. Nor can the governing rules be altered to enable the trustee to recoup from members generally, as distinct from members whose contributions give rise to the surcharge liability, the amount of surcharge paid.

The Regulations commence on gazettal.