OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS 1987 (REPEALED)

PART II - SUPERANNUATION FUNDS  

Division 1 - General  

REGULATION 18B   STANDARDS RELATING TO CONTRIBUTIONS  

18B(1)   [ Prescribed standards ]  

For the purposes of subsection 7(1) of the Act, the standards set out in this regulation are prescribed.

18B(2)   [ Limit on acceptance of deductible contributions ]  

A superannuation fund must not accept deductible contributions during a year of income that exceed the maximum deductible contributions applicable to the fund under this regulation in relation to that year of income.

18B(3)   [ Age limit ]  

A superannuation fund must not accept a contribution towards a superannuation pension or an ETP for a person, unless:

(a) the person:

(i) has not turned 65; or

(ii) if the governing rules of the fund as at 30 June 1990 provide that the person must retire for the purposes of the fund not later than 12 months after the person turns 65 - has not reached the age at which he or she must retire for those purposes; or

(iii) turned 60 on or before 30 June 1990 and has not turned 70; or

(b) the contribution is made:

(iii) in respect of the member for the purposes of the Guarantee Act in an amount that does not exceed the minimum amount required by that Act so that superannuation guarantee charge is not payable by the employer making the contribution; or

(iv) as payment of the shortfall component in relation to the member; or

(v) in accordance with a prescribed agreement or award.

18B(4)   [ Age for maximum funding limit ]  

Subject to subregulation (4A), subregulation (6) has effect in relation to a person who was at least:

(a) 60 years old on 1 July 1990; and

(b) 65 years old at the time referred to in that subregulation;

as if references in that subregulation to the age of 65 years were references to the age of 70 years.

18B(4A)   [ Contributions for retirement at less than 65 years ]  

If, in accordance with guidelines issued by the Commissioner that were current as at:

(a) 25 May 1988; or

(b) the day when the fund was constituted (if the fund was constituted after 25 May 1988 and before 1 July 1990);

the acceptance of contributions in relation to persons on the basis of a retirement age of less than 65 years was permitted, subregulation (6) has effect until 30 June 1995 in relation to the person as if references in that subregulation to the age of 65 years were references to the lower age so permitted.

18B(5)   [ Applicable reasonable benefit limit ]  

For the purposes of this regulation:

(a) if the rules of a superannuation fund do not prohibit the fund providing pensions or rolling-over amounts to purchase annuities on behalf of members, the reasonable benefit limit of a member of the fund is whichever of the following amounts the fund chooses:

(i) the amount worked out by multiplying the person ' s HAS by the person ' s pension reasonable benefit multiple using an eligible service period ending:

(A) in a case to which subregulation (4A) applies - at the end of the day on when the person turns the lower age referred to in that paragraph; or

(B) in any other case - at the end of the day when the person turns 65; or

(ii) the amount specified in paragraph (b) of the definition of pension RBL in subregulation 4A(1) ; or

(iii) the amount worked out by multiplying 90 % of the person ' s salary as last advised to the trustees of the fund by an employer of the person of whom the person is not an associate by the number that would be the person ' s pension reasonable benefit multiple, if it were worked out using:

(A) in a case to which subregulation (4A) applies - an eligible service period ending at the end of the day when the person turns the lower age referred to in that subregulation; or

(B) in any other case - an eligible service period ending at the end of the day when the person turns 65;

and as if the person ' s HAS were 90 % of that salary; and

(b) if the rules of a superannuation fund prohibit the provision of pensions and the rolling-over of amounts to purchase annuities on behalf of members, the reasonable benefit limit of a member of the fund is whichever of the following amounts the fund chooses:

(i) the amount worked out by multiplying the person ' s HAS by the person ' s lump sum reasonable benefit multiple using an eligible service period ending:

(A) in a case to which subregulation (4A) applies - at the end of the day when the person turns the lower age referred to in that subregulation; or

(B) in any other case - at the end of the day when the person turns 65; or

(ii) the amount specified in subparagraph (a)(ii) of the definition of lump sum RBL in subregulation 4A(1) ; or

(iii) the amount worked out by multiplying 90 % of the person ' s salary as last advised by an employer of the person of whom the person is not an associate, by the number that would be the person ' s lump sum reasonable benefit multiple if it were worked out using:

(A) in a case to which subregulation (4A) applies - an eligible service period ending at the end of the day when the person turns the lower age referred to in that subregulation; or

(B) in any other case - an eligible service period ending at the end of the day on when the person turns 65;

and as if the person ' s HAS were 90 % of that salary.

18B(6)   [ Maximum funding limit ]  

For the purposes of this regulation, the maximum funding limit of a person, other than a person referred to in subregulation (6A) at a particular time is to be worked out using the formula:

RBL × (AGE + 5 − ENTRY AGE) (65 − ENTRY AGE)

where:

RBL
means the person ' s reasonable benefit limit at that time worked out in accordance with subregulation (5); and

AGE
means:

(a) 60, or the person ' s age in days at that time or on the day on which the person joined the fund, whichever is the later, divided by 365, whichever is the lower; or

(b) if paragraph (4)(a) applies to the person - 65, or the person ' s age in days at his or her last birthday divided by 365, whichever is the lower; or

(c) if subregulation (4A) applies to the person:

(i) 5 less than the lower age in years referred to in that subregulation; or

(ii) the person ' s age in days at that time or on the day when the person joined the fund, whichever is the later, divided by 365;

whichever is the lower; and

ENTRY AGE
means the number obtained by dividing:

(a) the person ' s age in days at the time when the person joined the fund; or

(b) if the person rolled-over into the fund the whole of a benefit (other than undeducted contributions, concessional components or non-qualifying components) from another superannuation fund or from an approved deposit fund, a life assurance company or a registered organisation - the person ' s age in days at the time when the person joined the fund, company or organisation from which the person first rolled-over the whole of a benefit (other than undeducted contributions, concessional components or non-qualifying components);

by 365.

18B(6A)   [ Maximum funding limit for pension recipient ]  

For the purposes of this regulation, the maximum funding limit of a person who has commenced to receive a superannuation pension from a superannuation fund is 0.

18B(7)   [ Maximum deductible contributions - defined benefit fund ]  

The maximum deductible contributions that may be accepted by a defined benefit superannuation fund in respect of all members of the fund is:

(a) for the period from the beginning of 1 July 1990 to the end of the year of income of the fund when the first calculation day on or after 1 July 1990 occurs - the amount worked out in accordance with the rate determined by an actuary as at the last calculation date before 1 July 1990; and

(b) for a particular year of income in each period of 3 years of income of the fund the first of which commences immediately after the year of income referred to in paragraph (a) - the amount worked out in accordance with subregulation (7A) in respect of the year.

18B(7A)   [ Formula ]  

The amount referred to in paragraph (7)(a) or (b) is an amount worked out in accordance with the formula:

R × S

where:

R
is the actuarial rate worked out using the formula in subregulation (8);

S
is the sum of:

(a) the sum of the salary amounts of all members of the fund as at the beginning of that year; and

(b) the sum of the salary amounts of each person who became a member of the fund between the beginning and the end of that year, as at the day when the person became a member.

18B(8)   [ " Actuarial rate " ]  

The actuarial rate for the purposes of subregulation (7) is the rate worked out by dividing the number worked out by an actuary using the formula:

MFL − AMV + B + C − E − G N × 0.85

+ D + F

by the number of dollars in the sum of the salary amounts of all members of the fund as at the calculation day,

where:

MFL
means the sum of each member ' s maximum funding limits as at the calculation day; and

AMV
means the sum of:

(a) the amount of any cash or deposits at call that the fund holds on behalf of members of the fund; and

(b) the face value of any capital guaranteed life insurance policies that the fund holds; and

(c) the cost or the surrender value, whichever is the greater, of any other life policies that the fund holds, not being policies that are in the form of units:

(i) to which value is added at rates that:

(A) are determined by the insurers concerned from time to time; and

(B) are used to fix unit prices; or

(ii) the value of which is directly related to the value of assets specified in the respective policies; and

(d) 85 % of the market value of the other assets of the fund;

as at the calculation day; and

B
means the amount determined by an actuary that represents the sum of the present values of the amounts required to be paid by the fund in respect of:

(a) postponed retirements; and

(b) deferred benefits for former members or dependants of former members; and

(c) pensions payable to existing members, dependants of existing members or dependants of former members;

as at the calculation day; and

C
means the total amounts of undeducted contributions and concessional components held by the fund as at the calculation day; and

D
means the amount that represents the total of:

(a) the sum of:

(i) the expected cost to the fund during the year of income, from the beginning of the calculation day, of insurance premiums in respect of death or permanent disability benefits; and

(ii) the amount determined by an actuary as the cost to the fund during that year of meeting the liability referred to in paragraph 279(2)(b) of the Tax Act (in this definition called " self insurance " );

to cover the difference between the sum of the reasonable benefit limits of all members of the fund, as at the calculation day, and AMV in the formula; and

(b) the sum of:

(i) the expected cost to the fund during that year of insurance premiums; and

(ii) the amount determined by an actuary as the cost to the fund during that year of self insurance;

to cover the payment of salary continuance benefits to which component G in the formula does not apply; and

E
means the total amount of benefits that have, after 30 June 1990 and before the calculation day, been transferred by the fund to other superannuation funds on behalf of persons who are members of the fund as at the calculation day; and

F
means the expected cost of administration of the fund during the period of 12 months commencing on the calculation day; and

G
means the sum of the amounts of any salary continuance benefits that have, after 30 June 1990 and before the calculation day, been paid by the fund in respect of persons who were members of the fund as at the calculation day, being benefits that:

(a) are greater than 75 % of the salaries to which they relate; or

(b) had been payable for more than 2 years; and

N
means the number worked out by dividing the sum of the period to retirement of each member of the fund as at the calculation day by the number of members of the fund.

18B(9)   [ Maximum deductible contributions - other funds ]  

The maximum deductible contributions that may be accepted by a superannuation fund that is not a defined benefit superannuation fund during a year of income (in this subregulation called the " current year of income " ) in relation to a member of the fund is the amount worked out using the formula:

MFL − AMV + B + C − E − G N × 0.85

+ D + F

where:

MFL
means the member ' s maximum funding limit as at the beginning of the current year of income; and

AMV
means the amount worked out by multiplying the sum of:

(a) the amount of any cash or deposits at call that the fund holds on behalf of members of the fund; and

(b) the face value of any capital guaranteed life insurance policies that the fund holds; and

(c) the cost or the surrender value, whichever is the greater, of any other life policies that the fund holds, not being policies that are in the form of units:

(i) to which value is added at rates that:

(A) are determined by the insurers concerned from time to time; and

(B) are used to fix unit prices; or

(ii) the value of which is directly related to the value of assets specified in the respective policies; and

(d) 85 % of the market value of the other assets of the fund;

as at the beginning of the current year of income by the member ' s pro rata factor for the current year of income; and

B
means the amount worked out by multiplying the sum of the present values of the amounts required to be paid by the fund in respect of:

(a) postponed retirements; and

(b) deferred benefits for former members or dependants of former members; and

(c) pensions payable to existing members, dependants of existing members or dependants of former members;

by the member ' s pro rata factor for the current year of income; and

C
means the amount of undeducted contributions and concessional components held by the fund in respect of the member at the beginning of the current year of income; and

D
means the amount that represents the total of:

(a) the sum of:

(i) the expected cost to the fund during the current year of income of insurance premiums in respect of death or permanent disability benefits; and

(ii) the cost to the fund during that year of meeting the liability referred to in paragraph 279(2)(b) of the Tax Act (in this definition called " self insurance " );

to cover the difference between the member ' s reasonable benefit limits and the member ' s account balance as at the beginning of the year of income; and

(b) the sum of:

(i) the expected cost to the fund during the current year of income of insurance premiums; and

(ii) the cost to the fund during that year of self insurance;

to cover the payment to the member of salary continuance benefits to which component G in the formula does not apply; and

E
means the amount of benefits that have, after 30 June 1990 and before the current year of income, been transferred by the fund to other superannuation funds on behalf of the member; and

F
means:

(a) if the fund allocates a cost to the member in respect of the expected cost of administration of the fund during the current year of income - the amount so allocated; or

(b) in any other case - the amount worked out by multiplying the expected cost of administration of the fund during the current year of income by the member ' s pro rata factor for the current year of income; and

G
means the sum of the values of any salary continuance benefits paid by the fund after 30 June 1990 and before the current year of income in respect of the member that:

(a) are greater than 75 % of the salary to which they relate; or

(b) had been payable for more than 2 years; and

N
means the period to retirement of the member at the beginning of the current year of income.

18B(10)   [ Member joining fund part way through year ]  

Subregulation (9) applies to a member of a superannuation fund who joined the fund after the beginning of a year of income as if references in that subregulation to the beginning of the current year of income were references to the day on which the member joined the fund.

18B(11)   [ Reduction for in-house assets ]  

If a superannuation fund has in-house assets at any time during a year of income, the amount worked out under subregulation (8) or (9) in relation to the fund for that year of income is to be reduced by the percentage worked out in accordance with the following table:

Peak level of in-house assets	Reduction
up to 10 %	0 %
10 % to 20 %	10 %
20 % to 30 %	20 %
30 % to 40 %	30 %
40 % to 50 %	40 %
50 % to 60 %	50 %
60 % to 70 %	60 %
70 % to 80 %	70 %
80 % to 90 %	80 %
over 90 %	90 %

18B(12)   [ No contributions to be accepted: defined benefit fund ]  

If an application of the formula in subregulation (8) in relation to a superannuation fund produces zero or a negative number in relation to a year in an actuarial period, the fund must not accept deductible contributions during that year.

18B(13)   [ No contributions to be accepted: other funds ]  

If an application of the formula in subregulation (9) in relation to a superannuation fund produces zero or a negative amount in relation to a year of income in relation to a member of the fund, the fund must not accept deductible contributions during that year in relation to that member.

18B(14)   [ Interpretation ]  

In this regulation:

account balance
, in relation to a member of a superannuation fund, means amounts allocated to the member under the rules of the fund, and includes amounts that have not vested in the member;

actuarial period
, in relation to a defined benefit superannuation fund, means a period, not exceeding 3 years, commencing at the beginning of a year of income of the fund;

calculation day
, in relation to a defined benefit superannuation fund, means the first day of an actuarial period of the fund;

deductible contributions
means contributions towards a benefit that are deductible for tax purposes under section 82AAC or 82AAT of the Tax Act;

HAS
has the same meaning as in subregulation 4A(1) ;

in-house asset
has the same meaning as in subregulation 16A(1) ;

period to retirement
, in relation to a member of a superannuation fund, means:

(a) 5 or the number worked out by dividing by 365:

(i) in a case to which subregulation (4) or (4A) applies - the number of days before the member reaches the age applicable to him or her under that subregulation; or

(ii) in any other case - the number of days before the member turns 65;

whichever is the lower number; or

(b) if the number ascertained in accordance with paragraph (a) is less than 1, 1.

pro rata factor
, in relation to a member of a superannuation fund in relation to a year of income, means the number worked out by dividing the member ' s account balance at the beginning of the year of income or, if the member joined the fund after that time, at the time the member joined, by the sum of the account balances of all members of the fund at the beginning of the year of income;

salary amount
, in relation to a member of a superannuation fund, means the amount of the salary of the member for the purposes of the governing rules of the fund;

salary continuance benefit
means an income benefit payable by a superannuation fund because of the disability of a member of the fund, being a benefit that:

(a) is not a superannuation pension; and

(b) is not payable on or after the day when the member turns 65.