Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 1) (74 of 2007)

Schedule 3   Amendments commencing on 1 July 2007

[12]   After subregulation 1.05 (11)

insert

(11A) A contract for the provision of a benefit (the annuity ) meets the standards of this subregulation if the contract ensures that payment of the annuity is made at least annually, and also ensures that:

(a) for an annuity in relation to which there is an account balance attributable to the annuitant - the total of payments in any year (including under a payment split) is at least the amount calculated under clause 1 of Schedule 7; and

(b) for an annuity that is not described in paragraph (a):

(i) both of the following apply:

(A) the contract does not provide for a residual capital value, commutation value or withdrawal benefit greater than 100% of the purchase price of the annuity;

(B) the total of payments in any year (including under a splitting order) is at least the amount calculated under clause 2 of Schedule 7; or

(ii) each of the following applies:

(A) the annuity is payable throughout the life of the beneficiary (primary or reversionary), or for a fixed term of years that is no greater than the difference between the primary beneficiary’s age on the commencement day and age 100;

(B) the amount paid as the purchase price is wholly converted into annuity payments;

(C) there is no arrangement for an amount (or a percentage of the purchase price) prescribed by the contract to be returned to the recipient when the annuity ends;

(D) the total of payments from the annuity in the first year (including under a payment split) is at least the amount calculated under clause 2 of Schedule 7;

(E) the total of payments from the annuity in a subsequent year cannot vary from the total of payments in the previous year unless the variation is as a result of an indexation arrangement or the transfer of the annuity to another person;

(F) if the annuity is commuted, the commutation amount cannot exceed the benefit that was payable immediately before the commutation; or

(iii) the standards of subregulation (2) are met; and

(c) the annuity is transferable to another person only on the death of the beneficiary (primary or reversionary, as the case may be); and

(d) the capital value of the annuity and the income from it cannot be used as a security for a borrowing.

(11B) A contract for the provision of a benefit does not meet the standards of any of subregulations (2) to (11A) if, in relation to the death of the annuity recipient on or after 1 July 2007, the annuity is transferred to a person who would not be eligible to be paid a benefit in the form of an annuity under subregulation 6.21 (2A).