OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS 1987 (REPEALED)

PART I - PRELIMINARY  

REGULATION 3F   MEANING OF PENSION - SUBSECTION 3(1) OF THE ACT  

3F(1)   [ When benefit a pension ]  

A benefit is taken to be a pension for the purposes of the Act if it is a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (2), (4) or (6).

3F(2)   [ Standards for rules ]  

Rules meets the standards of this subregulation if they contain provisions that ensure:

(a) that the pension is paid at least annually throughout the life of the primary beneficiary in accordance with paragraphs (b) and (c) and, if there is a reversionary beneficiary:

(i) throughout the reversionary beneficiary ' s life; or

(ii) if he or she is a child of the primary beneficiary or of a former reversionary beneficiary under the pension - at least until his or her 16th birthday; or

(iii) if the person referred to in subparagraph (ii) is a full-time student at age 16 - at least until the end of his or her full-time studies or until his or her 25th birthday (whichever occurs sooner); and

(b) that the size of the payments of benefit in a year is fixed, allowing for variation only as specified in the rules; and

(c) that, unless the Commissioner otherwise approves, the sum payable as benefit to the primary beneficiary or to the reversionary beneficiary, as the case may be, increases year by year by at least the lesser of:

(i) 5 % ; or

(ii) a rate equal to the rate of increase (if any) determined by comparing the quarterly CPI first published by the Australian Statistician for the second-last quarter preceding the date on which payment is to be made with the quarterly CPI first published by the Australian Statistician for that quarter in the preceding year; and

(d) that the pension does not have a residual capital value; and

(e) that the pension cannot be commuted except:

(i) if the commutation is made within 6 months after the commencement day of the pension; or

(ii) if the commutation is made within 10 years after the commencement day of the pension to the benefit of a reversionary beneficiary on the death of the primary beneficiary; or

(iii) if section 15S of the Act applies - in accordance with the section; and

(iv) if the ETP resulting from the commutation is transferred directly to the purchase of another benefit provided under rules that meet the standards of this subregulation or subregulation (3) or provided under a contract that meets the standards of subregulation 3E(2) or (3) ; and

(f) that, if the pension reverts or is commuted, it does not have a reversionary component greater than 100 % of the benefit that was payable before the reversion or the commutation; and

(g) that the pension is not able to be transferred to a person other than a reversionary beneficiary on the death of the primary beneficiary or of another reversionary beneficiary; and

(h) that the capital value of the pension and the income from it, cannot be used as security for a borrowing.

3F(3)   [ Effect of additional requirements ]  

Rules are not taken not to meet the standards in subregulation (2) for the reason only that, although making provision meeting the standards of that subregulation, they additionally provide that:

(a) if the primary beneficiary dies within 10 years after the commencement day of the pension, a surviving reversionary beneficiary may obtain a payment equal to the total payments that the primary beneficiary would have received, if the primary beneficiary had not died, from the day of the death until the end of the period of 10 years; and

(b) if the primary beneficiary dies within 10 years after the commencement day of the pension and there is no surviving reversionary beneficiary, an amount, not exceeding the difference between the sum of the amounts paid to the primary beneficiary and the sum of the amounts that would have been so payable in the period of 10 years, is payable to the primary beneficiary ' s estate; and

(c) if the primary beneficiary dies within 10 years after the commencement day of the pension and there is a surviving reversionary beneficiary who also dies within that period, there is payable to the reversionary beneficiary ' s estate an amount determined as described in paragraph (b) as if that paragraph applied to the reversionary beneficiary.

3F(4)   [ Rules failing subreg (2) with no fixed benefit ]  

Rules:

(a) that do not meet the standards in subregulation (2); and

(b) that do not fix the size of payments of benefit in a year; and

meet the standards of this subregulation if they contain provisions that at least ensure that:

(c) the standards in paragraphs (2)(g) and (h) are met; and

(d) payments are made at least annually; and

(e) on and after the commencement of section 76 of the Taxation Laws Amendment (Superannuation) Act 1992 - the payments in a year, except a payment by way of commutation, are not larger or smaller in total than, respectively, the maximum and minimum limits calculated in accordance with Schedule 1A .

Note:

The Taxation Laws Amendment (Superannuation) Act 1992 commenced on 22 December 1992.

3F(5)   [ Subreg (5) standards still met ]  

Rules are not taken not to meet the standards in subregulation (4) for the reason only:

(a) that:

(i) the commencement day of the pension occurs on or after 1 April in a financial year; and

(ii) the rules do not provide for the payment of an amount in that financial year that meets the standard for the minimum amount in that subregulation; or

(b) that the rules do not ensure that the payments in the year in which the pension is to end meet the standard for the minimum amount in that subregulation.

3F(6)   [ Rules failing subreg (2) with fixed benefit ]  

Rules:

(a) that do not meet the standards in subregulation (2); and

(b) that provide that the size of the payments of benefit in a year is fixed, allowing for variation only as specified in the rules; and

(c) under which the commencement day is on or after 1 July 1994;

meet the standards in this subregulation if they at least ensure that:

(d) the standards in paragraphs (2)(f), (g) and (h) are met; and

(e) variation in payments from year to year does not exceed, in any year, the average rate of increase of the CPI in the preceding 3 years; and

(f) payments in accordance with the contracted size are made at least annually; and

(g) if, under the rules, the pension can be commuted - the conversion to a lump sum is limited to a sum that is not greater than the sum determined by applying the appropriate pension valuation factor under Schedule 3 to the pension as if the commencement day were the day on which the commutation occurs.