OCCUPATIONAL SUPERANNUATION STANDARDS REGULATIONS 1987 (REPEALED)

PART II - SUPERANNUATION FUNDS  

Division 1 - General  

REGULATION 16   INVESTMENT STANDARDS  

16(1)   [ Standards ]  

For the purposes of subsection 7(1) of the Act, the following standards are prescribed in relation to the investment of assets of superannuation funds and borrowing by trustees:

(a) subject to subregulation (2), money of a superannuation fund shall not be lent to any of the fund ' s members, either directly or by means of arrangements being entered into for lending money to the members in the exercise of a general power of investment of assets of the fund;

(b) subject to subregulation (3), the trustees of a superannuation fund shall not borrow, or maintain an existing borrowing of, money, whether by way of a secured or unsecured loan, otherwise than to secure temporary finance;

(c) all investments of any of the assets of a superannuation fund, other than an investment in an in-house asset within the meaning of regulation 16A , shall be made on an arms length basis.

16(2)   [ Exemption re certain loans to members ]  

If under the governing rules of a superannuation fund:

(a) in the case of a private sector fund - established before 16 December 1985; and

(b) in the case of a public sector fund - established before 25 May 1988;

the trustees of the fund, on or before 16 December 1985 in the case of a private sector fund or 25 May 1988 in the case of a public sector fund:

(c) had express power to lend money to members; or

(d) lent money to members and that lending was not expressly prohibited;

then:

(e) paragraph (1)(a) does not apply to the fund; and

(f) the power of the trustees to lend money to members must not be varied except to limit that power or to remove it.

16(3)   [ Exemption re certain borrowings ]  

If:

(a) the trustees of a private sector fund had, on or before 11 June 1986; or

(b) the trustees of a public sector fund had, on or before 1 July 1990;

borrowed money in a manner that does not comply with the standard set out in paragraph (1)(b), the trustees must, as soon as practicable but in any event not later than the end of the applicable day, make such arrangements as are necessary to comply with that standard and, until such arrangements are made or the end of the applicable day, whichever happens first, that standard does not apply to the fund in respect of the money borrowed by the trustees on or before the day specified in paragraph (a) or (b), as the case requires.

16(3A)   [ " applicable day " ]  

In subregulation (3), " the applicable day " means:

(a) in relation to a private sector fund - 30 June 1995; or

(b) in relation to a public sector fund - 30 June 2000.

16(4)    
(Omitted by SR No 185 of 1990)

16(5)   [ " temporary finance " ]  

In subregulation (1), " temporary finance " means finance arranged by borrowing in order to overcome cash flow problems in the payment of superannuation benefits.