Explanatory Statement
Issued by the Authority of the Assistant TreasurerExplanatory Statement
Retirement Savings Accounts Act 1997
Retirement Savings Accounts Amendment Regulations 1999 (No. 1)
The Retirement Savings Accounts Act 1997 (the Act) and the Retirement Savings Accounts Regulations (the Principal Regulations) allow banks, building societies, credit unions and life insurance companies to provide superannuation without a trust structure in the form of retirement savings accounts (RSAs), and provide for the functional supervision of RSAs and RSA providers by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
Section 200 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.
The Regulations amend the Principal Regulations to make miscellaneous technical refinements to the operating requirements for RSAs. The amendments have been prepared in light of administrative experience and/or industry representations. In summary, the Regulations:
- •
- enable superannuation benefit transfers to and from exempt public sector superannuation schemes (EPSSSs). Those transfers have not been legal under the Principal Regulations because EPSSSs are not included in the current definition of 'transferred' in the Principal Regulations. As EPSSSs are, otherwise, recognised in the Superannuation Industry (Supervision) (SIS) legislation and RSA system, this anomaly is rectified by making amendments to refer to EPSSSs where relevant in the Principal Regulations (All Schedule Items except Item 1); and
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- make a stylistic change to the title of the Principal Regulations to be consistent with the style reference to the name of the Act (Schedule Item 1).
The Regulations are described in detail in the Attachment.
The Regulations commence on gazettal.
RETIREMENT SAVINGS ACCOUNTS AMENDMENT REGULATIONS 1999 (No. 1)
Regulation 1 - Name of Regulations
The name of these regulations is the Retirement Savings Accounts Amendment Regulations 1999 (No. 1)
Regulation 2 provides that the regulations commence on gazettal.
Regulation 3 - Amendment of Retirement Savings Accounts Regulations
Regulation 3 provides that the Retirement Savings Accounts Regulations are amended as in Schedule 1.
Schedule 1 Amendment of Retirement Savings Accounts Regulations
Item 1 amends regulation 1.01 of the Principal Regulations to effect a stylistic change to the name of the Principal Regulations to be consistent with the style reference to the name of the Act.
Item [2] Subregulation 1.03(1), definition of withdrawal benefit, subparagraph (b)(ii)
Item 2 inserts a new paragraph (ii) to the definition of 'withdrawal benefit' in subregulation 1.03(1). This new paragraph enables an exempt public sector superannuation scheme (EPSSS) to be a recipient of an amount of superannuation benefits in respect of an RSA holder, if the RSA holder voluntarily ceased to be an RSA holder and transferred his or her benefits to an EPSSS.
Item [3] Subregulation 1.03(1)
Item 3 inserts a definition 'EPSSS' into subregulation 1.03(1). EPSSS is defined as meaning an 'exempt public sector superannuation scheme'.
Item 4 replaces paragraph (c) of the Explanatory Note that follows regulation 1.06 of the Principal Regulations, in order to recognise that RSA holders may now be transferred to an EPSSS. Paragraph (c) now provides that if an RSA holder is transferred to a superannuation entity or an EPSSS, the transferring RSA provider must provide the trustee of the superannuation entity or EPSSS with certain information about the RSA holder (as prescribed in Division 2.8 of the Principal Regulations).
Item [5] Subregulation 2.28(3)
Item 5 amends subregulation 2.28(3) of the Principal Regulations to require the transferring RSA provider to give information to an RSA holder in the event of the benefits of the RSA holder being transferred to an EPSSS. This event is in addition to those of the RSA holder being transferred to another superannuation entity or RSA (as currently provided).
Item [6] Subregulation 2.29(1)
Item [7] Subregulation 2.29(1)
Item [9] Subregulation 2.29(3)
Regulation 2.29 of the Principal Regulations requires the RSA provider to give appropriate information relating to the transfer to RSA holders who may be transferred to an eligible rollover fund by default after a specified period. The information will assist the RSA holder to choose another RSA institution, a superannuation entity within that period.
Item 6 to 9 amend Regulations 2.29 of the Principal Regulations to provide for the above requirement to apply to the additional situation where the RSA holder may have the choice of an EPSSS. This is done by inserting EPSSS as appropriate in regulation 2.29.
Item [10] Subparagraph 2.43(3)(b)(ii)
Item [11] After subparagraph 2.43(3)(b)(ii)
Regulation 2.43 of the Principal Regulations provides that where an RSA holder is being transferred to another RSA or a superannuation entity, the RSA provider need not give to the RSA holder information under Division 2.7 (Information on closing RSA) of the Principal Regulations if.
- a)
- the transferring RSA provider has given the RSA holder sufficient information under subregulation 2.28(3) (Information on transfer); or
- b)
- the RSA holder is likely to receive from the RSA institution, the trustee of the superannuation entity, information that will cover the RSA holder's exit reporting period.
Item 10 amends subparagraph 2.43(3)(b)(ii) of the Principal Regulations by substituting 'period; or' for 'period.' due to the insertion of a new Subparagraph 2.43(3)(b)(iii) by item 11.
Item 11 amends regulation 2.43 to extend the exception under b) above to cover the case where the RSA holder is transferred to an EPSSS and is likely to receive, from the trustee of the EPSSS, information to the same effect as that under subdivision 2.4.2 of the SIS Regulations in respect of the RSA holder's exit reporting period.
Item [12] Subregulation 3.01(1), definition of superannuation system, paragraph (h)
Item 12 amends the definition of 'superannuation system' in paragraph 3.0 1 (1) of the Principal Regulations by substituting'EPSSSs' for 'exempt public sector superannuation schemes' in paragraph (h) for consistency with the introduction of the definition of 'EPSSSs' in Item 3.
Item [13] Subregulation 3.01(1), definition of transferred
Item 13 amends the definition of 'transferred' in paragraph 3.01(1) of the Principal Regulations to include an EPSSS as an entity which may receive or be paid RSA holder's benefits. This provides for the transfer of benefits from an RSA to an EPSSS.
Item [14] Subregulation 4.01(6)
Item 14 amends subregulation 4.01(6) of the Principal Regulations to include an EPSSS as an entity from and to which benefits are rolled over or transferred in the references to 'preserved benefits', 'restricted non-preserved benefits', 'unrestricted non-preserved benefits' and 'post-65 employer-financed benefits' in Part 4 (Payment standards) of the Principal Regulations.
Item [15] Paragraph 4.10(1)(b)
Item 15 amends paragraph (1)(b) of regulation 4. 10 of the Principal Regulations to refer to 'EPSSS' in lieu of 'exempt public sector superannuation scheme' for consistency with the use of 'EPSSS' in the Principal Regulations as introduced by Item 3.
Item [16] Sub-subparagraph 4.24(2)(a)(iii)(C)
Item [17] After sub-subparagraph 4.24(2)(a)(iii)(C)
Item [18] Sub-subparagraph 4.24(2)(b)(iii)(C)
Item [19] After sub-subparagraph 4.24(2)(b)(iii)(C)
Regulation 4.24 of the Principal Regulations prescribes the events on whose occurrence benefits in an RSA must be cashed.
Items 17 and 19 insert a new sub-subparagraph '(D) an EPSSS' after sub-subparagraphs 4.24(2)(a)(iii)(C) and 4.24(2)(b)(iii)(C) so that in the event the RSA holder has attained age 65 or 70, the RSA holder is not gainfully employed and mandated employer contributions have ceased to be made and are not liable to be made in respect of the RSA holder, to an EPSSS, the post-65 employer-financed benefits must be cashed out of an RSA.
Items 16 and 18 amend respectively sub-subparagraphs 4.24(2)(a)(iii)(C) and 4.24(2)(b)(iii)(C) of the Principal Regulations by substituting 'fund; or' for 'fund;' due to the insertion of new subsubparagraphs (D) by Items 17 and 19.
Item [20] Paragraph 4.24(5)(b)
Consequent to the amendments to subregulation 4.24(2) by Items 16 to 19 above, Item 20 amends the interpretation of 'post-65 employer-financed benefits' in subregulation 4.24(5) of the Principal Regulations to include mandated employer contributions made to an EPSSS by inserting 'EPSSS' in paragraph 4.24(5)(b).
Item 21 amends regulation 4.31 of the Principal Regulations to extend the prohibition on rollover or transfer of benefits into a receiving RSA institution from another RSA or a superannuation entity if the receiving RSA institution has not received the RSA holder's or member's consent to the transfer. The extension will include an EPSSS as a transferring entity.
Item [22] Subparagraph 4.32(b)(ii)
Item 22 amends regulation 4.32 of the Principal Regulations to extend the prohibition on rollover of benefits from an RSA unless the RSA holder has given consent to the rollover to another RSA institution or a superannuation entity and it is likely that the receiving RSA institution or superannuation entity has received from the RSA holder consent to the rollover. The extension will include an EPSSS as a receiving entity.
Item [231 Subparagraph 4.33(b)(ii)
Item 23 amends regulation 4.33 of the Principal Regulations to extend the prohibition on transfer from an RSA unless the RSA holder has given consent to the transfer to another RSA institution or a superannuation entity and it is likely that the receiving RSA institution or superannuation entity has received from the RSA holder consent to the transfer. The extension will include an EPSSS as a receiving entity.