Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 1) (74 of 2007)

Schedule 3   Amendments commencing on 1 July 2007

[80]   Regulations 7.04 and 7.05

substitute

7.04 Acceptance of contributions - regulated superannuation funds

(1) A regulated superannuation fund may accept contributions only in accordance with the following table and subregulations (2), (3), (4) and (6).

(2) In addition to subregulation (1), the regulated superannuation fund must not accept any member contributions if the member’s tax file number has not been quoted (for superannuation purposes) to the trustee of the fund.

(3) In addition to subregulation (1), the regulated superannuation fund must not accept any fund-capped contributions in a financial year in respect of a member that exceed:

(a) if the member is 64 or less on 1 July of the financial year - three times the amount of the non-concessional contributions cap; or

(b) if the member is 65 but less than 75 on 1 July of the financial year - the non-concessional contributions cap.

(4) If a regulated superannuation fund receives an amount in a manner that is inconsistent with subregulation (1), (2) or (3):

(a) the fund must return the amount to the member within 30 days of becoming aware that the amount was received in a manner that is inconsistent with subregulation (1), (2) or (3), unless:

(i) for an amount received in a manner that is inconsistent with subregulation (2) - the member’s tax file number is quoted (for superannuation purposes) within 30 days of this amount being received by the trustee of the fund; or

(ii) for an amount received in a manner that is inconsistent with subregulation (3) - a valid notice under section 290-170 of the Income Tax Assessment Act 1997 is received by the trustee of the fund within 30 days of this amount being received by the trustee of the fund; and

(b) the fund is also authorised to take any of the following action to the extent that the rules of the fund allow:

(i) if the price at which the interest could have been acquired on the day on which the amount is returned is less than the price on the day on which the interest was acquired, the amount that would otherwise be returned to the member may be reduced by the amount of the difference between the prices;

(ii) if the price at which the interest could have been acquired on the day of return of the amount is greater than the price on the day on which the interest was acquired, the amount that would otherwise be returned to the member may be increased by the amount of the difference between the prices;

(iii) if the price at which the interest could be acquired cannot be determined in accordance with the contract or legal relationship on the day on which the amount is returned, the price is to be determined:

(A) on the basis of the most recent day on which a price was calculated in accordance with the contract or legal relationship; or

(B) if there is no day of that kind - as soon as practicable after the decision is made to return the amount;

(iv) in addition to subparagraph (i), the amount that would, but for this subparagraph, be returned to the member may be reduced to account for reasonable administration costs and transaction costs, incurred by the fund, that:

(A) are reasonably related to the acquisition of the interest and the return of the amount; and

(B) do not exceed the true cost of an arms’ length transaction;

other than costs related to commissions or similar benefits;

(v) if:

(A) the interest is a risk insurance interest, or the part of an interest that is a risk insurance interest; and

(B) the interest has been issued for a specific period, or the premium for the interest has been paid in relation to cover for a specific period; and

(C) a proportion of the specific period has already passed when the decision is made to return the amount to the member;

the amount that would otherwise be returned to the member may be reduced by the sum of:

(D) that part of any amount received in a manner inconsistent with subregulation (1), (2) or (3) as has been paid by the fund to any person in connection with the risk insurance product and which is not recoverable by the fund from that person; and

(E) the proportion equal to the proportion of the period that has passed of the difference between the amount that would otherwise be returned and the amount referred to in (a).

(5) If a regulated superannuation fund acts under subregulation (4), the fund is taken not to have contravened the Act or these Regulations in relation to the acceptance of the amount or in relation to the return of the amount to the member of the fund.

(6) A regulated superannuation fund may accept contributions in respect of a member if the trustee is reasonably satisfied that the contribution is in respect of a period during which, under an item in the table in subregulation (1), the fund may accept the contribution in respect of that member, even though the contribution is actually made after that period.

(7) In this regulation:

administration costs has the same meaning as in subregulation 5.01 (1).

employer contributions has the same meaning as in subregulation 1.03 (1).

mandated employer contributions has the same meaning as in subregulation 5.01 (1).

member contributions has the same meaning as in subregulation 5.01 (1).

fund-capped contributions means the member contributions described in the definition of that expression in subregulation 5.01 (1), other than the following:

(a) a contribution to which a valid and acknowledged notice under section 290-170 of the Income Tax Assessment Act 1997 relates;

(b) a contribution that meets the requirements of paragraph 292-95 (1) (d) of the Income Tax Assessment Act 1997;

(c) a contribution that meets the requirements of subsection 292-100 (9) of the Income Tax Assessment Act 1997;

(d) a payment made by the Commissioner of Taxation under section 65 of the Superannuation Guarantee (Administration) Act 1992;

(e) a payment made by the Commissioner of Taxation under section 61 or 61A of the Small Superannuation Accounts Act 1995;

(f) a Government co-contribution made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003;

(g) a contribution that is a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997.

non-concessional contributions cap means the amount mentioned in subsection 292-85 (2) of the Income Tax Assessment Act 1997.

quoted (for superannuation purposes) has the same meaning as in the Income Tax Assessment Act 1997.

superannuation provider means:

(a) the trustee of a complying superannuation fund; or

(b) the trustee of a constitutionally protected fund, within the meaning of the Income Tax Assessment Act 1997.

tax file number has the meaning given by section 299W of the Act.

transaction costs means any of the following:

(a) brokerage paid because of an investment transaction;

(b) a cost arising from maintenance of a property investment;

(c) stamp duty on an investment transaction.

7.05 Accrual of benefits - defined benefit funds

(1) Subject to subregulation (5), a defined benefit fund may grant an accrual of benefits in respect of a member of the fund who is under age 65.

(2) Subject to subregulation (5), a defined benefit fund may grant an accrual of benefits in respect of a member of the fund who has reached age 65 but not age 70 only if:

(a) the accrual is attributable to mandated employer contributions; or

(b) the member has been gainfully employed on at least a part-time basis during the financial year in which the contributions are made.

(3) Subject to subregulation (5), a defined benefit fund may grant an accrual of benefits in respect of a member of the fund who has reached age 70 but not age 75 only if:

(a) the accrual is attributable to mandated employer contributions; or

(b) the accrual is attributable to:

(i) contributions made by the member in respect of the member; or

(ii) contributions made by the employer that are not mandated employer contributions;

and the member has been gainfully employed on at least a part-time basis during the financial year in which the contributions are made.

(4) Subject to subregulation (5), a defined benefit fund may grant an accrual of benefits in respect of a member who has reached age 75 only if the accrual is attributable to mandated employer contributions.

(5) A defined benefit fund may grant an accrual of benefits in respect of a member if the trustee is reasonably satisfied that the accrual is in respect of a period during which, under subregulation (1), (2), (3) or (4), the fund may grant an accrual of benefits in respect of that member, even though the grant occurs after that period.