Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 4) (148 of 2004)

Schedule 3   Amendments commencing on 20 September 2004

[24]   After subregulation 1.06 (7)

insert

(8) Rules that provide a benefit (the market linked pension ) meet the standards of this subregulation if the rules ensure that:

(a) the market linked pension:

(i) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary's life expectancy on the commencement day of the pension, rounded up to the next whole number if the primary beneficiary's life expectancy does not consist of a whole number of years; or

(ii) is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary's life expectancy mentioned in subparagraph (i) calculated, at the option of the primary beneficiary, as if the primary beneficiary were up to 5 years younger on the commencement day; or

(iii) if:

(A) the pension is a pension that reverts to a surviving spouse on the death of the primary beneficiary; and

(B) the life expectancy of the primary beneficiary's spouse is greater than the life expectancy of the primary beneficiary; and

(C) the primary beneficiary has not chosen to make an arrangement mentioned in subparagraph (i) or (ii) for the pension;

the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to:

(D) the life expectancy of the spouse on the commencement day; or

(E) the life expectancy of the spouse calculated, at the option of the primary beneficiary, as if the spouse were up to 5 years younger on the commencement day;

at the option of the primary beneficiary, and rounded up to the next whole number if the life expectancy of the spouse does not consist of a whole number of years; and

(b) the total amount of the payments to be made in a year (excluding payments by way of commutation but including payments made under a payment split) is determined in accordance with Schedule 6; and

(c) the market linked pension does not have a residual capital value; and

(d) the market linked pension cannot be commuted except:

(i) if the pension:

(A) is not funded from the commutation of:

(I) an annuity that is provided under a contract that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or

(II) another pension that is provided under rules that meet the standards of this subregulation, or subregulation 1.06 (2), (3) or (7); or

(III) another pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations; and

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

(ii) subject to subparagraph (iii), on the death of the primary beneficiary or reversionary beneficiary, by payment of:

(A) a lump sum or a new pension to one or more dependants of either the primary beneficiary or reversionary beneficiary; or

(B) a lump sum to the legal personal representative of either the primary beneficiary or reversionary beneficiary; or

(C) if, after making reasonable enquiries, the provider of the pension is unable to find a person mentioned in sub-subparagraph (A) or (B) - a lump sum to another individual; or

(iii) for subparagraph (ii), if the primary beneficiary has opted, under subparagraph (a) (iii), for a period worked out in relation to the life expectancy of the primary beneficiary's spouse - the market linked pension cannot be commuted until the death of both the primary beneficiary and the spouse; or

(iv) if the eligible termination payment resulting from the commutation is transferred directly to the purchase of another benefit that is:

(A) an annuity provided under a contract that meets the standards of subregulation 1.05 (2), (3), (9) or (10); or

(B) a pension that is provided under rules that meet the standards of this subregulation, or subregulation 1.06 (2), (3) or (7); or

(C) a pension that is provided under terms and conditions that meet the standards of subregulation 1.07 (3A) of the RSA Regulations; or

(v) to pay a superannuation contributions surcharge; or

(vi) to give effect to an entitlement of a non-member spouse under a payment split; and

(e) if the market linked pension reverts - it does not have a reversionary component greater than 100% of the account balance immediately before the reversion; and

(f) if the market linked pension is commuted - the commutation amount cannot exceed the account balance immediately before the commutation; and

(g) the market linked pension can be transferred only:

(i) on the death of the primary beneficiary:

(A) to 1 of the dependants of the primary beneficiary; or

(B) to the legal personal representative of the primary beneficiary; or

(ii) on the death of the reversionary beneficiary:

(A) to 1 of the dependants of the reversionary beneficiary; or

(B) to the legal personal representative of the reversionary beneficiary; and

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

(9) Rules mentioned in subregulation (8) are not prevented from meeting the standards of that subregulation by reason only that the rules provide that, if the commencement day of the pension is on or after 1 June in a financial year, no payment is required to be made for that financial year.

(10) Despite regulation 9 of the Income Tax Regulations 1936, for a pension that has a commencement day on or after 20 September 2004 and on or before 31 December 2004, one of the following life tables are to be used in ascertaining the life expectancy of a person under this regulation:

(a) the most recently published Australian Life Tables;

(b) the 1995-97 Australian Life Tables.