Superannuation Legislation Amendment Regulation 2013 (No. 1) (26 of 2013)

Schedule 3   Amendment of the Superannuation Guarantee (Administration) Regulations 1993

[2]   Before regulation 4.08

Insert:

4.07C Definitions

In this Division:

anti-detriment payment means a tax saving amount for paragraph 295-485(1)(b) of the Income Tax Assessment Act 1997.

insured benefit , for a member, means a right, other than an anti-detriment payment, for the member's benefits to be increased on the realisation of a risk.

4.07D Operating standard - permitted types of insurance

(1)This regulation is made for subsection 31(1) of the Act.

(2)A trustee of a regulated superannuation fund must not provide an insured benefit in relation to a member of the fund unless the insured event is consistent with a condition of release specified in item 102, 102A, 103 or 109 of Schedule 1.

(3)However, subregulation(2) does not apply to:

(a)the continued provision of benefits to members who joined a fund before 1 July2014; or

(b)the provision of benefits under an approval granted before 1 July2014 under subparagraph 62(1)(b)(v) of the Act.

(4)If a trustee is unable to amend the governing rules of a fund, to make the governing rules comply with subregulation(2):

(a)the rules that do not comply with subregulation(2) are taken to have been omitted from the governing rules; and

(b)the rules omitted under paragraph (a) are taken to have been replaced by rules that allow the provision of benefits that are permitted under subregulation(2).

(5)This regulation does not apply until 1 July2014.

4.07E Operating standard - self-insurance

(1)This regulation is made for subsection 31(1) of the Act.

Note:See also paragraph 31(2)(eb) of the Act.

(2)If, on 1 July 2013, a regulated superannuation fund does not self-insure, in relation to a particular risk, a trustee of the fund may, on and after 1 July2013, provide an insured benefit, in relation to that risk,to members of the fund only if the provision of the benefit is fully supported by an insurance policy provided by an insurer.

(3)Subregulation(2) does not apply, on or before 1 July2016, to a member who is transferred from a fund that self-insured,in relation to the member and the risk, into:

(a)a successor fund that, immediately before the transfer, did not self-insure in relation to the risk; or

(b)under Part 33 of the Act - a fund that, immediately before the transfer, did not self-insure in relation to the risk.

(4)If, on 1 July2013, a regulated superannuation fund self-insures, in relation to a particular risk, a trustee of the fund may, on and after 1 July 2016, provide an insured benefit, in relation to that risk, to members of the fund only if the provision of the benefit is fully supported by an insurance policy provided by an insurer.

(5)If the governing rules of the fund mentioned in subregulation(4) do not allow the trustee to obtain the insurance policy mentioned in that subregulation, the trustee must, before 1 July 2016, amend the rules of the fund to allow the trustee to do so.

(6)If the trustee cannot amend the rules, the rules are taken to be amended to allow the trustee to obtain the insurance policy.

(7)Subregulation(4) does not apply if the Commonwealth Government, or the government of a State or Territory:

(a)provides an insured benefit to members of the fund; or

(b)guarantees the provision of an insured benefit to members of the fund.

(8)Subregulation(4) does not apply, in relation to defined benefit members of the fund, if:

(a)on or before 1 July 2013, APRA has not imposed, under subsection 29EA(1) of the Act, a condition on the licence of the RSE licensee of the fund that prohibits self-insurance in relation to defined benefit members; and

(b)on 1 July 2013, the fund self-insures in relation to the members.

(9)Despite subregulation(4), a beneficiary of the fund who is mentioned in column2 of the table has the entitlement mentioned in column3 of the table.

(10)In this regulation:

fund includes a sub-fund.

3 Subregulation6.01(2)(definition of permanent incapacity )

Repeal the definition.

4 At the end of subregulation6.29(1)

Add:

; or (d)for section 29SAA, 29SAB, 387, 388 or 394 of the Act the trustee of the fund is required by a prudential standard made under section 34C of the Actto transfer the benefits.

5 AfterPart 9

Insert:

Part 9A - Requirements relating to MySuper products

9.46 Notification - accrued default amount attributed to MySuper product

(1)For subsection 29SAA(3) of the Act,the RSE licensee must give the member a notice in writing in accordance with subregulation(3) at least 90 days before the attribution of the accrued default amount or the transferof the accrued default amount to another fund.

(2)However, this regulation does not apply to the RSE licensee if the attribution or transfer will not result in any of the following:

(a)an increase in a fee or charge that applies to the amount;

(b)a reduction in an insured benefit that is attributable to the member;

(c)an increase in an insurance premium that is attributable to the member;

(d)a change in the investment strategy that relates to the amount.

(3 )For subregulation(1), the notice must mention the following:

(a) the amount that is attributable to the member at the time the notice is sent;

(b) the name of the MySuper product to which the amount will be attributed or transferred;

(c) how the member can elect, in writing, to opt out of the attribution or transfer;

(d) how the member may obtain a product disclosure statement for the MySuper product;

(e) any change to a fee or charge that applies to the amount;