Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello MP)Chapter 2 - Retirement savings accounts
Outline of chapter
2.1 Schedule 2 amends the Retirement Savings Accounts Act 1997 to add a regulation making power to the 'no employer kick back' provision.
Context of amendments
2.2 The Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004 inserted a 'no employer kick back' rule in the Superannuation Industry (Supervision) Act 1993 based on the existing provision in the Retirement Savings Accounts Act 1997. A regulation making power was included in the Superannuation Industry (Supervision) Act 1993 provision, allowing exemptions to the rule to be made. Similar exemptions should be allowed for retirement savings account providers as for superannuation fund trustees.
Summary of new law
2.3 A regulation making power will be added to the 'no employer kick back' provision in the Retirement Savings Accounts Act 1997. This will enable exemptions to be made for retirement savings account providers or associates of retirement savings account providers from the requirement in the legislation to not supply or offer to supply goods or services to an employer on the condition that one or more of their employees holds a retirement savings account with the provider.
Comparison of key features of new law and current law
| New law | Current law |
|---|---|
| Section 78 of the Retirement Savings Accounts Act 1997 will allow regulations to be made to exempt providers from the provision. | Section 78 of the Retirement Savings Accounts Act 1997 does not allow regulations to be made to exempt providers from the provision. |
Detailed explanation of new law
2.4 A regulation making power will be added to subsections 78(1) [Schedule 2, item 1] and 78(2) [Schedule 2, item 2] of the Retirement Savings Accounts Act 1997 to enable exemptions to be made to prescribe certain exemptions to the general rule. This will make section 78 of the Retirement Savings Accounts Act 1997 consistent with section 68A of the Superannuation Industry (Supervision) Act 1993.