Superannuation Industry (Supervision) Amendment Regulations 2001 (No. 3) (353 of 2001)

Schedule 1   Amendments

[43]   After Part 7

insert

Part 7A Superannuation interests subject to payment split

Division 7A.1 General

7A.01 Purpose of Part 7A

The purpose of this Part is:

(a) to facilitate the payment splitting arrangements established under Part VIIIB of the Family Law Act 1975; and

(b) to provide for additional options that may be exercised in relation to superannuation interests that are subject to a payment split under that Act.

7A.02 Operating standards

For subsections 31 (1) and 32 (1) of the Act, the standards set out in this Part are applicable to the operation of regulated superannuation funds and approved deposit funds.

7A.03 Trustee to give payment split notice

(1) If an interest in a regulated superannuation fund or an approved deposit fund becomes subject to a payment split, the trustee of the fund must notify the member spouse and the non-member spouse in relation to the interest that the interest is subject to a payment split.

(2) The notice must:

(a) be in writing; and

(b) state the date on which it is given.

(3) The notice must be given:

(a) for a payment split under a superannuation agreement or flag lifting agreement - within 28 days after the operative time for the payment split; and

(b) for a payment split under a splitting order - by the later of:

(i) the end of 28 days after the operative time for the payment split; and

(ii) the end of 28 days after the trustee receives a copy of the order.

(4) Despite subregulation (1), the trustee is not required to give a payment split notice in respect of an interest if the interest ceases to be subject to the payment split before the end of the period applying under subregulation (3).

Note See Divisions 2.5A and 2.6 in relation to other information that the trustee must give to a non-member spouse in relation to a superannuation interest that is subject to a payment split.

Division 7A.2 Options available for certain superannuation interests

7A.04 Application of Division 7A.2

This Division applies in relation to a superannuation interest (the original interest ) in a regulated superannuation fund, or an approved deposit fund, if:

(a) the original interest is subject to a payment split; and

(b) either:

(i) the original interest is an accumulation interest that is in the growth phase; or

(ii) an allocated pension is being paid in respect of the original interest.

7A.05 Request for new interest

The non-member spouse may request the trustee to create a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held.

7A.06 Request for transfer of benefits

(1) The non-member spouse may request the trustee to roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or RSA, specified in the request, to be held for the benefit of the non-member spouse.

(2) If the original interest is in a self managed superannuation fund, the non-member spouse, or the member spouse, may request the trustee to roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or RSA, specified in the request, to be held for the benefit of the non-member spouse.

7A.07 Request for lump sum payment

(1) This regulation applies if the non-member spouse has satisfied a relevant condition of release at the operative time for the payment split.

(2) The non-member spouse may request the trustee to pay to the non-member spouse, as a lump sum, the amount to which the non-member spouse is entitled under the payment split.

(3) For this regulation:

(a) relevant condition of release means a condition of release mentioned in item 101, 102, 103, 106, 201, 202, 203 or 206 of Schedule 1; and

(b) a non-member spouse satisfies a condition of release if the event specified in the condition has occurred in relation to the non-member spouse; and

(c) in the application of item 101, 103, 201 or 203 of Schedule 1 to a non-member spouse, a reference to a member in:

(i) the definition of permanent incapacity in subregulation 6.01 (2); or

(ii) the definition of retirement in subregulations 6.01 (2) and (7);

is taken to be a reference to the non-member spouse.

7A.08 Requirements for requests

(1) A request by a person under this Division must be made:

(a) before the end of 28 days after the trustee gives a payment split notice to the person; or

(b) if the trustee allows a longer period, before the end of the longer period allowed.

(2) The request must be made by written notice given to the trustee.

(3) The notice must:

(a) be signed by the person making the request; and

(b) state the date when it is given to the trustee; and

(c) for a request by the non-member spouse, include his or her name, date of birth and postal address; and

(d) for a request by the member spouse, include a written nomination by the non-member spouse of the regulated superannuation fund, approved deposit fund, EPSSS or RSA specified in the request.

(4) The trustee may allow the request to be withdrawn.

7A.09 Giving effect to request

(1) This regulation applies if a trustee receives a request under this Division within the time allowed under regulation 7A.08.

(2) The trustee must give effect to the request unless:

(a) the trustee has received an earlier request under this Division in respect of the same interest and the earlier request has not been withdrawn; or

(b) for a request under regulation 7A.05 - the governing rules of the regulated superannuation fund or approved deposit fund in which the original interest is held do not allow a new interest to be created for the non-member spouse in the fund; or

(c) for a request under regulation 7A.06 - the regulated superannuation fund, approved deposit fund, EPSSS or RSA specified in the request does not accept the rollover or transfer of benefits for the non-member spouse.

(3) If paragraph (2) (b) or (c) applies, the trustee must roll over or transfer the transferable benefits to:

(a) another regulated superannuation fund, approved deposit fund, EPSSS or RSA nominated by the non-member spouse; or

(b) an eligible rollover fund.

(4) If transferable benefits are rolled over or transferred to an eligible rollover fund under paragraph (3) (b), the trustee must give to the non-member spouse a written notice stating:

(a) that the benefits have been rolled over or transferred to an eligible rollover fund; and

(b) the name and contact details for the fund.

7A.10 Trustee options if no request received

(1) If the trustee does not receive a request under this Division within the time allowed under regulation 7A.08, the trustee may:

(a) create a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held; or

(b) subject to subregulation (2), roll over or transfer the transferable benefits to another regulated superannuation fund or approved deposit fund, or to an EPSSS or an RSA, nominated by the non-member spouse (subject to the governing rules of the other regulated superannuation fund, approved deposit fund or EPSSS or the terms and conditions of the RSA), to be held for the benefit of the non-member spouse; or

(c) if the trustee does not, within the 28-day period specified in paragraph (2) (a), receive from the non-member spouse a written notice nominating a regulated superannuation fund, approved deposit fund, EPSSS or RSA to which the transferable benefits may be rolled over or transferred, roll over or transfer the transferable benefits to an eligible rollover fund.

(2) Before rolling over or transferring the transferable benefits to a regulated superannuation fund, approved deposit fund, EPSSS or RSA under paragraph (1) (b), the trustee must give to the non-member spouse a written notice stating that:

(a) the non-member spouse has 28 days from the date of the notice in which to nominate, by written notice to the trustee, a regulated superannuation fund, approved deposit fund, EPSSS or RSA to which the transferable benefits may be rolled over or transferred; and

(b) if the non-member spouse does not, within that 28-day period, nominate a regulated superannuation fund, approved deposit fund, EPSSS or RSA for that purpose, the trustee will roll over or transfer the transferable benefits to an eligible rollover fund.

(3) A notice given by the trustee under subregulation (2) must state the name and contact details of the eligible rollover fund to which the non-member spouse's transferable benefits may be rolled over or transferred.

7A.11 Creating a new interest

(1) This regulation applies if the trustee creates a new interest for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held:

(a) to give effect to a request under regulation 7A.05; or

(b) on the trustee's initiative under paragraph 7A.10 (1) (a).

(2) Subject to subregulations (3) and (4), the value of the benefits that the non-member spouse has in the new interest must be equal to the value of:

(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non-member spouse when the new interest is created - the adjusted base amount less the amount of any fees charged in respect of the payment split; or

(b) if the payment split is a base amount payment split and an adjusted base amount does not apply to the non-member spouse when the new interest is created - the base amount allocated to the non-member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees charged in respect of the payment split; or

(c) if the payment split is a percentage payment split - the value of the original interest at the time when the new interest is created multiplied by the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order, less the amount of any fees charged in respect of the payment split.

(3) If a splittable payment becomes payable in respect of the member spouse's interest before the new interest is created, the value of the benefits that the non-member spouse has in the new interest must be the amount applying under subregulation (2) less the amount the non-member spouse is entitled to be paid in respect of the splittable payment.

(4) The value of the benefits that the non-member spouse has in the new interest must not be more than the value of the withdrawal benefit in relation to the member spouse and the original interest immediately before the payment split.

(5) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the benefits that the non-member spouse has in the new interest.

(6) In creating the new interest, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(7) The benefits held in the new interest are unrestricted non-preserved benefits, restricted non-preserved benefits or preserved benefits in accordance with the character that they had in the member spouse's interest.

(8) A new interest created to give effect to a request under regulation 7A.05 is taken to be created on the day when the trustee receives the request in accordance with regulation 7A.08.

(9) A new interest created on the trustee's initiative under paragraph 7A.10 (1) (a) is taken to be created on the twenty-ninth day after the date when the payment split notice in relation to the payment split was given by the trustee.

(10) Within 28 days after the new interest is created, the trustee must notify the non-member spouse that the new interest has been created.

7A.12 Rolling over or transferring transferable benefits

(1) This regulation applies if the trustee rolls over or transfers transferable benefits:

(a) to give effect to a request under regulation 7A.06; or

(b) on the trustee's initiative under paragraph 7A.10 (1) (b) or (c).

(2) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the transferable benefits.

(3) In rolling over or transferring the transferable benefits, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(4) The trustee must roll over or transfer the transferable benefits as follows:

(a) if the rollover or transfer is to give effect to a request under regulation 7A.06, it must be done within:

(i) 90 days after receiving the request; or

(ii) any longer period allowed by the Regulator;

(b) if the rollover or transfer is to be done on the trustee's initiative under paragraph 7A.10 (1) (b), it must be done within 90 days after the trustee receives the nomination from the non-member spouse under subregulation 7A.10 (2);

(c) if the rollover or transfer is to be done on the trustee's initiative under paragraph 7A.10 (1) (c), it must be done within 90 days after the end of the 28-day period mentioned in subregulation 7A.10 (2).

(5) Within 28 days after the transferable benefits are rolled over or transferred, the trustee must:

(a) notify the non-member spouse that the benefits have been rolled over or transferred; and

(b) if the rollover or transfer was requested by the member spouse, notify the member spouse that the benefits have been rolled over or transferred.

7A.13 Paying a lump sum

(1) This regulation applies if, to give effect to a request under regulation 7A.07, the trustee pays to the non-member spouse, as a lump sum, the amount to which the non-member spouse is entitled under the payment split.

(2) Subject to subregulations (3) and (4), the value of the lump sum to be paid to the non-member spouse must be equal to the value of:

(a) if the payment split is a base amount payment split and an adjusted base amount applies to the non-member spouse at the date of the payment - the adjusted base amount less the amount of any fees charged in respect of the payment split; or

(b) if the payment split is a base amount payment split and an adjusted base amount does not apply to the non-member spouse at the date of the payment - the base amount allocated to the non-member spouse, within the meaning of regulation 45 of the Family Law (Superannuation) Regulations 2001, less the amount of any fees charged in respect of the payment split; or

(c) if the payment split is a percentage payment split - the value of the original interest at the date of the payment multiplied by the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order, less the amount of any fees charged in respect of the payment split.

(3) If a splittable payment becomes payable in respect of the member spouse's interest before the lump sum is paid to the non-member spouse, the value of the lump sum to be paid to the non-member spouse must be the amount applying under subregulation (2) less the amount the non-member spouse is entitled to be paid in respect of the splittable payment.

(4) The value of the lump sum to be paid to the non-member spouse must not be more than the value of the withdrawal benefit in relation to the member spouse and the original interest immediately before the payment split.

(5) The value of the benefits that the member spouse has in his or her interest must be reduced by the value of the lump sum paid to the non-member spouse.

(6) In paying the lump sum to the non-member spouse, amounts must be taken proportionately from the unrestricted non-preserved benefits, restricted non-preserved benefits and preserved benefits of the member spouse.

(7) The trustee must pay the lump sum within:

(a) 90 days after receiving the request under regulation 7A.07; or

(b) any longer period allowed by the Regulator.

Division 7A.3 Splittable payments - payment standards for non-member spouse entitlements

7A.14 Application of Division 7A.3

This Division applies if:

(a) an interest (the original interest ) in a regulated superannuation fund or approved deposit fund is subject to a payment split; and

(b) the non-member spouse is entitled to be paid an amount from the original interest because a splittable payment in respect of the interest has become payable; and

(c) a new interest has not been created for the non-member spouse, or the transferable benefits of the non-member spouse have not been transferred or rolled out of the fund, under Division 7A.2.

7A.15 Meaning of relevant condition of release

For this Division:

(a) relevant condition of release means a condition of release mentioned in item 101, 102, 103, 106, 201, 202, 203 or 206 of Schedule 1; and

(b) a non-member spouse satisfies a condition of release if the event specified in the condition has occurred in relation to the non-member spouse; and

(c) in the application of item 101, 103, 201 or 203 of Schedule 1 to a non-member spouse, a reference to a member in:

(i) the definition of permanent incapacity in subregulation 6.01 (2); or

(ii) the definition of retirement in subregulations 6.01 (2) and (7);

is taken to be a reference to the non-member spouse.

7A.16 Preservation of non-member spouse entitlements

(1) Subject to regulation 7A.17, this regulation applies if the non-member spouse has not satisfied a relevant condition of release at the time of the splittable payment.

(2) The trustee of the regulated superannuation fund or approved deposit fund in which the original interest is held must:

(a) allocate the amount to an interest that the trustee creates for the non-member spouse in the regulated superannuation fund or approved deposit fund; or

(b) roll over or transfer the amount to another regulated superannuation fund or an RSA, to be held for the benefit of the non-member spouse.

(3) If the non-member spouse's entitlement under the payment split is to be paid as a lump sum, the trustee must allocate, roll over or transfer the lump sum within:

(a) 90 days after the splittable payment becomes payable; or

(b) any longer period allowed by the Regulator.

(4) If the non-member spouse's entitlement derives from a pension being paid to the member spouse (other than a pension to which regulation 7A.17 applies), the trustee must allocate, roll over or transfer the amounts to which the non-member spouse is entitled:

(a) if the governing rules of the fund provide for the frequency with which pension payments are to be made to the member spouse - in accordance with those rules; or

(b) in any other case - at least annually.

(5) Subject to subregulation (6), the amount must not be allocated, rolled over or transferred unless the trustee of the transferor fund:

(a) has received, from the non-member spouse, consent to the allocation, rollover or transfer; or

(b) believes, on reasonable grounds, that the trustee of the receiving regulated superannuation fund or RSA has received from the non-member spouse consent to the allocation, rollover or transfer.

(6) If the trustee of the transferor fund believes, on reasonable grounds and after making reasonable inquiries, that the non-member spouse has not given a consent mentioned in subregulation (5):

(a) the trustee must apply, under subsection 243 (2) of the Act, for the issue to the non-member spouse of an interest in an eligible rollover fund that is a regulated superannuation fund; and

(b) the amount must be rolled over or transferred to that fund.

(7) The consent of the member spouse to a rollover or transfer under this regulation is not required.

(8) In subregulation (5):

consent means:

(a) written consent; or

(b) any other form of consent determined by the Regulator as sufficient in the circumstances.

7A.17 Payment of non-member spouse entitlements from pension

(1) This regulation applies if:

(a) the non-member spouse has not satisfied a relevant condition of release at the time of the splittable payment; and

(b) the member spouse was being paid a pension in respect of the original interest on or before the operative time for the payment split.

(2) When the splittable payment becomes payable, the trustee of the regulated superannuation fund or approved deposit fund in which the original interest is held must pay the amount to which the non-member spouse is entitled to the non-member spouse.

7A.18 Cashing of non-member spouse entitlements

(1) This regulation applies if the non-member spouse has satisfied a relevant condition of release at the time of the splittable payment.

(2) When the splittable payment becomes payable, the trustee of the fund must:

(a) pay the amount to which the non-member spouse is entitled to the non-member spouse; or

(b) if the amount is not a pension, and the non-member spouse so requests:

(i) allocate the amount to an interest the trustee creates for the non-member spouse in the regulated superannuation fund or approved deposit fund in which the original interest is held; or

(ii) roll over or transfer the amount to another regulated superannuation fund or an RSA, nominated by the non-member spouse, to be held for the benefit of the non-member spouse.