Explanatory Statement

Issued by authority of the Minister for Revenue and Assistant Treasurer

Retirement Savings Accounts Act 1997

The purpose of these regulations is to support the implementation of the Government's Simplified Superannuation reforms announced in the 5 September 2006 statement A Plan to Simplify and Streamline Superannuation - Outcomes of Consultation. These regulations complement other regulations supporting the reforms which were registered on 27 April 2007.

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (RSA Act) provides in part that the Governor-General may make regulations prescribing matters required or permitted by the RSA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the RSA Act.

The Retirement Savings Accounts Regulations 1997 set out the contribution acceptance rules.

The Regulations modify to whom amounts should be returned when a holder's contribution is unable to be accepted.

Details of the Regulations are set out in the Attachment.

The RSA Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations commence on 1 July 2007.

The Regulations outlined above are legislative instruments for the purposes of the Legislative Instruments Act 2003.

No public consultation was undertaken on the draft Regulations. However, discussions took place with industry during the development stage of the regulations.

ATTACHMENT

Details of the Retirement Savings Accounts Amendment Regulations 2007(No. 2)

Regulation 1 specifies the name of the Regulations as the Retirement Savings Accounts Amendment Regulations 2007 (No. 2).

Regulation 2 provides that the Regulations commence on 1 July 2007.

Regulation 3 provides that Schedule 1 amends the Retirement Savings Accounts Regulations 1997 (RSA Regulations) as amended by the Retirement Savings Accounts Amendment Regulations 2007 (No. 1).

Schedule 1 Amendments

Item 1

The RSA Regulations as amended by the Retirement Savings Accounts Amendment Regulations 2007 (No.1) provide that where an amount paid to a retirement savings account (RSA) institution cannot be accepted under the contribution acceptance rules set out in subregulations 5.03(1), (2) or (3), the amount is returned to the RSA holder regardless of who paid the amount on the RSA holder's behalf.

Item 1 amends subregulations 5.03(4) and (5) such that where an RSA holder does not meet the contribution acceptance rules, the amount paid is returned to the entity or person that paid the amount.

This avoids the unintended consequences that would arise if the amount were returned to the RSA holder, such as an increased tax liability.