Superannuation Industry (Supervision) Regulations 1994

PART 4 - MANAGEMENT AND TRUSTEESHIP OF SUPERANNUATION ENTITIES  

Division 4.1 - Prescribed matters  

REGULATION 4.04   GOVERNING RULES OF A SUPERANNUATION ENTITY - PRESCRIBED EXERCISE OF DISCRETION BY NON-TRUSTEE  

4.04(1)   [Circumstances for exercise of discretion]  

For the purposes of subparagraph 59(1)(b)(iii) of the Act, the circumstances in which a discretion under the governing rules of a superannuation entity other than a self managed superannuation fund may be exercised by a person other than the trustee are:

(a) where, after the exercise of the discretion:

(i) the fund (if a defined benefit fund) would not become technically insolvent within the meaning of subregulation 9.06(3) ; or

(ii) the fund (if an accumulation fund) would not become technically insolvent within the meaning of subregulation 9.35(3) ; and

(b) where the discretion could have been exercised by the trustee without contravening the Act (other than section 55 ) or these regulations; and

(c) where the discretion qualifies under subregulation (2).

4.04(2)   [Discretion qualifies]  

A discretion qualifies if:

(a) the contributions of the employer-sponsor to the fund include contributions that are not mandated employer contributions (within the meaning of Part 5 ) and the discretion relates solely to either or both of the following:

(i) those non-mandated employer contributions; or

(ii) benefits related to those non-mandated employer contributions; or

(b) whether or not paragraph (a) applies - the discretion relates solely to one or more of the following:

(i) the admission of new members to the fund; or

(ii) the category of members into which a new member or existing member is to be placed; or

(iii) allowing a person to become an employer-sponsor of the fund; or

(iv) the termination of the fund; or

(v) the appointment of a trustee to an entity that does not have a trustee.