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superannuation leg (choice of funds) bill 1998

Contents

1............ Short title............................................................................................

2............ Commencement..................................................................................

3............ Schedule(s).........................................................................................

Schedule 1—Choice of superannuation funds                                                        

Part 1—Superannuation Guarantee (Administration) Act 1992                     

Part 2—Retirement Savings Accounts Act 1997                                               

Part 3—Superannuation Industry (Supervision) Act 1993                             

Schedule 2—Workplace Relations Amendment (Superannuation) Act 1998         

 



A Bill for an Act to amend the law relating to superannuation, and for related purposes

The Parliament of Australia enacts:

1   Short title

                   This Act may be cited as the Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 1998 .

2   Commencement

             (1)  Subject to this section, this Act commences on the day on which it receives the Royal Assent.

             (2)  Items 33 to 36, 41, 42, 51, 52, 55, 56, 60, 62 to 64 and 66 of Schedule 1 commence on 1 July 1999.

             (3)  Schedule 2 commences, or is taken to have commenced, immediately after section 2 of the Workplace Relations Amendment (Superannuation) Act 1998 commences.

3   Schedule(s )

                   Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.



 

1  Subsection 5(1)

Omit “Commonwealth is”, substitute “Commonwealth, Commonwealth Departments and untaxable Commonwealth authorities are”.

2  Subsection 5(2)

Repeal the subsection, substitute:

             (2)  However, subject to this Act and to such modifications as are prescribed, this Act applies in all other respects, in respect of any matter or thing in respect of the employment of a Commonwealth employee, as if:

                     (a)  the employee were employed by the responsible Department and not by the Commonwealth; and

                     (b)  the responsible Department were a company and each other Department, and each authority of the Commonwealth, were a company related to the responsible Department; and

                     (c)  the responsible Department were a government body.

          (2A)  In addition, subject to such modifications as are prescribed, this Act applies in relation to an untaxable Commonwealth authority in the same way as it applies in relation to a Commonwealth Department.

          (2B)  The Minister for Finance may give such directions in writing as are necessary or convenient to be given for carrying out or giving effect to this section and, in particular, may give directions in relation to the transfer of money within the Public Account.

          (2C)  Directions under subsection (2B) have effect, and must be complied with, notwithstanding any other law of the Commonwealth.

3  Subsection 5(3)

After “Commonwealth”, insert “, a Commonwealth Department or an untaxable Commonwealth authority”.

4  Subsection 5(4)

After “Commonwealth”, insert “, Commonwealth Departments or untaxable Commonwealth authorities”.

5  At the end of section 5

Add:

             (5)  In this section:

Commonwealth Department means:

                     (a)  a Department of State; or

                     (b)  a Department of the Parliament; or

                     (c)  a branch or part of the Australian Public Service in relation to which a person has, under an Act, the powers of, or exercisable by, the Secretary to a Department of the Australian Public Service.

modifications includes additions, omissions and substitutions.

responsible Department , in relation to the employment of a Commonwealth employee, means:

                     (a)  where the remuneration in respect of that employment is or was paid wholly or principally out of money appropriated under an annual Appropriation Act—the Commonwealth Department in respect of which the money was appropriated; and

                     (b)  where the remuneration in respect of that employment is or was paid wholly or principally out of money appropriated under an Act other than an annual Appropriation Act:

                              (i)  if the employee performs or performed the duties of that employment in, or in respect of, a Commonwealth Department—that Commonwealth Department; or

                             (ii)  in any other case—the Department of State administered by the Minister who administers the Act under which that money was appropriated, insofar as the Act appropriated that money; and

                     (c)  where the remuneration in respect of that employment is or was paid wholly or principally out of money appropriated by the Constitution—the Department of Finance and Administration.

untaxable Commonwealth authority means an authority of the Commonwealth that cannot, by a law of the Commonwealth, be made liable to taxation by the Commonwealth.

6  Subsection 6(1)

Insert:

capital guaranteed fund has the same meaning as in the Superannuation Industry (Supervision) Regulations.

7  Subsection 6(1)

Insert:

Commonwealth employee means an employee of the Commonwealth.

8  Subsection 6(1)

Insert:

Commonwealth industrial award means:

                     (a)  an industrial award or determination made under a law of the Commonwealth; or

                     (b)  an industrial agreement approved or registered under such a law.

9  Subsection 6(1)

Insert:

CSS means the scheme known as the Commonwealth Superannuation Scheme.

10  Subsection 6(1)

Insert:

defined benefit member means a member entitled on retirement to be paid a benefit defined, wholly or in part, by reference to either or both of the following:

                     (a)  the amount of the member’s salary:

                              (i)  at the date of the member’s retirement or an earlier date; or

                             (ii)  averaged over a period before retirement;

                     (b)  a specified amount.

11  Subsection 6(1)

Insert:

defined benefit superannuation scheme has the meaning given by section 6A.

12  Subsection 6(1)

Insert:

employer-sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

13  Subsection 6(1)

Insert:

exempt public sector superannuation scheme has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

14  Subsection 6(1) (definition of industrial award )

Repeal the definition, substitute:

industrial award means a Commonwealth industrial award, a State industrial award or a Territory industrial award.

15  Subsection 6(1)

Insert:

industry-based superannuation fund means a complying superannuation fund or complying superannuation scheme that has 2 or more employer-sponsors and that:

                     (a)  complies with subsection 89(1) of the Superannuation Industry (Supervision) Act 1993 (basic equal representation rules); or

                     (b)  is nominated in a Commonwealth award, a State award or a Territory award immediately before the commencement of section 2 of the Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 1998 ; or

                     (c)  is approved in writing by the Commissioner as an industry-based superannuation fund.

16  Subsection 6(1)

Insert:

PSS means the Public Sector Superannuation Scheme within the meaning of the Superannuation Act 1990 .

17  Subsection 6(1)

Insert:

public offer superannuation fund means a fund that is a public offer superannuation fund for the purposes of the Superannuation Industry (Supervision) Act 1993 .

18  Subsection 6(1)

Insert:

standard employer-sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

19  Subsection 6(1)

Insert:

standard employer-sponsored fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

20  Subsection 6(1)

Insert:

State industrial award means:

                     (a)  an industrial award or determination made under a law of a State; or

                     (b)  an industrial agreement approved or registered under such a law.

21  Subsection 6(1)

Insert:

Territory industrial award means:

                     (a)  an industrial award or determination made under a law of a Territory; or

                     (b)  an industrial agreement approved or registered under such a law.

22  Subsection 6(1)

Insert:

unfunded public sector scheme means a public sector scheme that is a defined benefit superannuation scheme:

                     (a)  in respect of which no fund is established for the purposes of the scheme; or

                     (b)  under which all or some of the amounts that will be required for the payment of benefits are not paid into the fund established for the purposes of the scheme or are not paid until the members become entitled to receive the benefits.

23  Subsection 19(2)

Omit “subsection (4)”, substitute “subsections (2A) and (4)”.

24  After subsection 19(2)

Insert:

          (2A)  If an employer makes one or more contributions (the no choice contributions ) to a fund other than a defined benefit superannuation scheme, or an RSA, on behalf of an employee during a quarter and the contributions are not made in compliance with the choice of fund requirements, the quarterly shortfall for the employer in respect of the employee is increased by the amount worked out with the formula:

where:

notional quarterly shortfall is the amount that would have been worked out under subsection (2) if the no choice contributions had not been made.

Note:          Part 3A sets out the choice of fund requirements.

          (2B)  If:

                     (a)  a reduction of the charge percentage for an employee for a quarter is made under subsection 22(2) in respect of a defined benefit superannuation scheme; and

                     (b)  there is at least one relevant day in the quarter where, if contributions (the notional contributions ) had been made to the scheme by the employer for the benefit of the employee on the day, the notional contributions would have been made not in compliance with the choice of fund requirements; and

                     (c)  section 19A (which deals with certain cases where no contributions are required) does not apply to the employer in respect of the employee in respect of the scheme for the quarter;

the quarterly shortfall for the employer in respect of the employee is increased by the amount worked out with the formula:

where:

notional quarterly shortfall is the amount that would have been worked out under subsection (2) if no reduction were made under subsection 22(2) in respect of the scheme.

number of breach of conditions days is the number of relevant days in the quarter on which, if a contribution had been made to the scheme by the employer for the benefit of the employee, those contributions would have been made not in compliance with the choice of fund requirements.

Note:          Part 3A sets out the choice of fund requirements.

          (2C)  The following days in a quarter are relevant days for the purposes of subsection (2B):

                     (a)  if the value of B in the formula in subsection 22(2) for the quarter is 1—every day in the quarter; or

                     (b)  in any other case—every day in the quarter that is in the shorter of the scheme membership period or the certificate period referred to in subsection 22(2).

          (2D)  A reference in subsections (2A) and (2B) to the quarterly shortfall being increased includes a reference to the shortfall being increased from nil.

25  After section 19

Insert:

19A   Scheme in surplus or member has accrued maximum benefit

             (1)  This section applies to an employer in respect of an employee in respect of a defined benefit superannuation scheme for a quarter if the employee is a defined benefit member of the scheme and either subsection (2) or (3) is satisfied.

Scheme in surplus

             (2)  This subsection is satisfied if:

                     (a)  the employee was an employee of the employer immediately before 1 July 1999 and has not ceased to be an employee of the employer since that time and before the start of the quarter; and

                     (b)  the employee was a defined benefit member of the fund immediately before 1 July 2000 and has not ceased to be such a member since that time and before the start of the quarter; and

                     (c)  an actuary has provided a certificate in accordance with regulations under the Superannuation Industry (Supervision) Act 1993 stating that the employer is not required to make contributions for the quarter and there has been such a certificate covering all times since 1 July 2000; and

                     (d)  an actuary has provided a certificate stating that, in the actuary’s opinion, at all times from 1 July 2000 until the end of the quarter, the assets of the scheme are, and will be, equal to or greater than 110% of the greater of the scheme’s liabilities in respect of vested benefits and the scheme’s accrued actuarial liabilities.

The certificate under paragraph (d) must have been provided no earlier than 15 months before the end of the quarter.

Member has accrued maximum benefit

             (3)  This subsection is satisfied if, after the start of the quarter, the defined benefit that has accrued to the employee will not increase other than:

                     (a)  as a result of increases in the employee’s salary or remuneration; or

                     (b)  by reference to accruals of investment earnings; or

                     (c)  by reference to indexation based on, or calculated by reference to, a relevant price index or wages index; or

                     (d)  in any other way prescribed for the purposes of this paragraph.

Meaning of scheme’s accrued actuarial liabilities and scheme’s liabilities in respect of vested benefits

             (4)  In this section:

scheme’s accrued actuarial liabilities ,at a particular time, means the total value, as certified by an actuary, of the future benefit entitlements of members of the scheme in respect of membership up to that time based on assumptions about future economic conditions and the future of matters affecting membership of the scheme, being assumptions made in accordance with applicable professional actuarial standards (if any).

scheme’s liabilities in respect of vested benefits , at a particular time, means the total value of the benefits payable from the scheme to which the members of the scheme would be entitled if they all voluntarily terminated their service with their employers at that time.

26  At the end of subsection 23(2)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s notional earnings base is adjusted: see section 32W.

27  At the end of subsection 23(3)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s notional earnings base is adjusted: see section 32W.

28  At the end of subsection 23(4)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s notional earnings base is adjusted: see section 32W.

29  At the end of subsection 23(4A)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s notional earnings base is adjusted: see section 32W.

30  At the end of subsection 23(4D)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s notional earnings base is adjusted: see section 32W.

31  At the end of subsection 23(5)

Add:

Note:          In certain cases, the choice of fund requirements provide that the employee’s ordinary time earnings are adjusted: see section 32W.

32  After Part 3

Insert:

Division 1 Overview of Part

32A   Purpose of Part

                   This Part sets out the circumstances in which contributions are made in compliance with the choice of fund requirements. This is important because a quarterly shortfall amount for an employer may be increased where contributions do not comply.

32B   Structure of Part

                   The structure of this Part is as follows:

 

Structure of Part

Division

Topic

Division 1

Overview of Part

Division 2

Which contributions satisfy the choice of fund requirements?

Division 3

Eligible choice funds

Division 4

Employee chosen funds

Division 5

Default funds

Division 6

Offering choices to employees

Division 7

Miscellaneous

Division 2 Which contributions satisfy the choice of fund requirements?

32C   Contributions that satisfy the choice of fund requirements

Contributions to certain funds

             (1)  A contribution to a fund by an employer for the benefit of an employee is made in compliance with the choice of fund requirements if the contribution is made to a fund that, at the time that the contribution is made, is:

                     (a)  a chosen fund for the employee (see Division 4); or

                     (b)  a default fund for the employee (see Division 5); or

                     (c)  if the employee is not a Commonwealth employee who is a member of the CSS or the PSS—an unfunded public sector scheme.

Contributions under AWAs or certified agreements

             (2)  A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made under, or in accordance with, an AWA or a certified agreement under the Workplace Relations Act 1996 or a certified agreement under the Industrial Relations Act 1988 .

Contributions under certain Victorian agreements

             (3)  A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made under, or in accordance with, an employment agreement that was in force under the Employee Relations Act 1992 of Victoria and which continues to be in operation by virtue of section 515 of the Workplace Relations Act 1996 .

Employees under State awards

             (4)  A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the employee is employed by the employer under a State industrial award.

Contributions under prescribed legislation

             (5)  A contribution to a fund by an employer for the benefit of an employee at a particular time is also made in compliance with the choice of fund requirements if the contribution is made under a law of the Commonwealth, of a State or of a Territory and the law is prescribed in relation to that time under regulations made for the purpose of this subsection.

Contributions before certain dates

             (6)  A contribution to a fund by an employer for the benefit of an employee is also made in compliance with the choice of fund requirements if the contribution is made:

                     (a)  before 1 July 1999; or

                     (b)  if the employee was an employee of the employer immediately before 1 July 1999 and has not ceased to be an employee of the employer since that time and before the contribution is made—before 1 July 2000; or

                     (c)  to the CSS or the PSS before 1 July 2000.

Contributions made after employees cease employment

             (7)  If:

                     (a)  an employee ceases to be employed by an employer; and

                     (b)  after the employment ceases, the employer makes a contribution to a fund for the benefit of the employee and in respect of the employment;

then, for the purposes of this section, the contribution is taken to have been made immediately before the employment ceases.

Note:          This section is used in determining if a quarterly shortfall for an employer is increased under subsection 19(2A) or 19(2B). Where subsection 19(2B) is relevant, the contributions referred to in this section are the notional contributions referred to in paragraph 19(2B)(b).

Division 3 Eligible choice funds

32D   What funds are eligible choice funds?

             (1)  A fund is an eligible choice fund for an employer at a particular time if:

                     (a)  it is a complying superannuation fund at that time; or

                     (b)  it is a complying superannuation scheme at that time; or

                     (c)  it is an RSA; or

                     (d)  at that time, a benefit certificate in relation to the fund is conclusively presumed under section 24, in relation to the employer, to be a certificate in relation to a complying superannuation scheme; or

                     (e)  contributions made by the employer to the fund at that time are conclusively presumed under section 25 to be contributions to a complying superannuation scheme.

             (2)  However, a fund ceases to be an eligible choice fund for an employer if the employer requests an employee to obtain, in accordance with section 32U, a statement in relation to the fund and the employer does not receive the statement before the time specified in that section.

32E   Meaning of funds —includes RSAs and schemes

             (1)  In this Part:

fund means:

                     (a)  a superannuation fund; and

                     (b)  a superannuation scheme; and

                     (c)  an RSA.

             (2)  For the purposes of this Part, the holder of an RSA is taken to be a member.

Division 4 Employee chosen funds

32F   What is a chosen fund—employer offers choices

             (1)  A fund is a chosen fund for an employee if the employee has selected the fund in accordance with the choice process set out in Division 6.

             (2)  The fund becomes a chosen fund for the employee 2 months after the employee gives the section 32S notice to the employer or at such earlier time after the notice is given as the employer determines.

32G   What is a chosen fund—employee proposes fund

             (1)  A fund is also a chosen fund for an employee if:

                     (a)  the employee has given the employer a written notice proposing that fund as a chosen fund for the employee; and

                     (b)  as a result of that proposal, the employer has given the employee a written notice accepting that fund as a chosen fund for the employee.

             (2)  The fund becomes a chosen fund for the employee 2 months after the employer gives the paragraph (1)(b) notice to the employee or at such earlier time after the notice is given as the employer determines.

32H   When fund ceases to be a chosen fund

             (1)  A fund (the old fund ) ceases to be a chosen fund for an employee if:

                     (a)  there is another fund that is a chosen fund for the employee; and

                     (b)  the employee has given the employer a written notice stating that the old fund is no longer a chosen fund for the employee.

             (2)  A fund also ceases to be a chosen fund if the employee requests the employer, under subsection 32M(2), to give him or her an offer of a choice of funds and the employer does not do this by the time specified in that subsection.

             (3)  A fund also ceases to be a chosen fund if it is impossible for the employer to contribute on behalf of the employee to the chosen fund. This may occur immediately after the fund becomes a chosen fund for the employee.

Example:    The chosen fund is closed to new members or ceases to accept further contributions.

             (4)  A fund also ceases to be a chosen fund if the fund ceases to be an eligible choice fund for the employer. This may occur immediately after the fund becomes a chosen fund for the employee.

Division 5 Default funds

32J   When there is a default fund

             (1)  There is a default fund for an employee at a particular time if:

                     (a)  at that time, there is not a chosen fund for the employee; and

                     (b)  that time is within 28 days of the employee first commencing employment with the employer.

             (2)  There is also a default fund for an employee if:

                     (a)  there is not a chosen fund for the employee; and

                     (b)  the employer has offered a choice of funds to the employee in accordance with section 32M, and either:

                              (i)  the period specified in section 32S has not ended; or

                             (ii)  the period has ended and the employee has given the employer a notice choosing a fund but the fund has not yet become a chosen fund for the employee.

Note:       A fund will not become a chosen fund for up to 2 months after the notice is given: see subsection 32F(2).

             (3)  There is also a default fund for an employee if:

                     (a)  there is not a chosen fund for the employee; and

                     (b)  the employer has offered a choice of funds to the employee in accordance with section 32M; and

                     (c)  the period specified in section 32S has ended without the employee giving the employer a written notice choosing a fund.

There ceases to be a default fund if the employer is required under subsection 32M(2) or (4) to give the employee a choice of funds and the employer does not do this by the time specified in the subsection concerned.

             (4)  There is also a default fund for an employee in the period of 2 months after the employer gives the employee a notice under paragraph 32G(1)(b) (employer accepting employee nominated fund) and before the fund becomes a chosen fund for the employee.

             (5)  There is also a default fund for an employee in the period of 28 days after the employer becomes aware that there ceased to be any chosen fund for the employee because of subsection 32H(3) (employer unable to contribute to fund) or subsection 32H(4) (chosen fund ceasing to be eligible choice fund).

             (6)  There is also a default fund for an employee if there ceased to be any chosen fund for the employee because of subsection 32D(2) (chosen fund ceasing to be an eligible choice fund). There ceases to be a default fund if the employer is required under subsection 32M(2) or (4) to give the employee a choice of funds and the employer does not do this by the time specified in the subsection concerned.

32K   What fund is a default fund?

             (1)  If:

                     (a)  the employer has previously contributed to an eligible choice fund for the employer for the benefit of the employee in compliance with the choice of fund requirements; and

                     (b)  it is possible for the employer to contribute to the fund on behalf of the employee; and

                     (c)  since the employer last contributed to that fund for the benefit of the employee, the employer has not contributed to any other fund that, at the time the employer contributed to it, was a chosen fund for the employee;

the fund is a default fund for the employee.

Note:          All such contributions made before 1 July 1999 (and for certain employees, before 1 July 2000) are in compliance with the choice of fund requirements: see subsection 32C(6).

             (2)  If there is not a default fund for the employee under subsection (1), the employer may select any eligible choice fund for the employer to which it is possible for the employer to contribute on behalf of the employee as a default fund for the employee.

             (3)  A fund ceases to be a default fund if it is impossible for the employer to contribute on behalf of the employee to the default fund. If this occurs, the new default fund is to be determined under subsections (1) and (2) on the basis that the fund that ceased to be a default fund no longer exists.

Example:    The default fund is closed to new members or ceases to accept further contributions.

             (4)  A fund also ceases to be a default fund if the fund ceases to be an eligible choice fund for the employer. If this occurs, the new default fund is to be determined under subsections (1) and (2) on the basis that the fund that ceased to be a default fund no longer exists.

             (5)  For the purposes of this section, a contribution is taken to be made to a defined benefit superannuation scheme by an employer on behalf of an employee on each day in a quarter for which a reduction in the charge percentage for the employee is made under subsection 22(2).

Note:          The default funds are specified in offers of choice of fund under section 32N.

Division 6 Offering choices to employees

32L   The choice process

                   This Division sets out the process to be followed in offering a choice of funds to employees under section 32F. An employer must comply with this Division for there to be a chosen fund or a default fund for an employee. However, in certain cases, an employer may be contributing in compliance with the choice of funds requirements even if there is no chosen fund or default fund (see section 32C).

32M   When choice must be offered

             (1)  An employer must offer a choice of funds to an employee within 28 days of the employee first commencing employment with the employer.

             (2)  An employer must also offer a choice of funds to an employee within 28 days of the employee giving the employer a written request to do so. However, a request is taken never to have been made if the employee has been given an offer of a choice of funds, or has been given a notice under paragraph 32G(1)(b), within the previous 12 months.

             (3)  An employer must also offer a choice of funds to an employee within 28 days of the employer becoming aware that there ceased to be any chosen fund for the employee because of:

                     (a)  subsection 32H(3) (employer unable to contribute to fund); or

                     (b)  subsection 32H(4) (fund ceasing to be eligible choice fund) (other than where the fund ceases to be an eligible choice fund because of subsection 32D(2)).

             (4)  An employer must also offer a choice of funds to an employee within 28 days of the employer becoming aware that a fund ceased to be a default fund for the employee because of:

                     (a)  subsection 32K(3) (employer unable to contribute to fund); or

                     (b)  subsection 32K(4) (fund ceasing to be eligible choice fund).

             (5)  An employer may also offer a choice of funds at any time.

32N   Offers of choice of funds

                   The offer of the choice of funds must either be:

                     (a)  a limited choice offer (see section 32P); or

                     (b)  an unlimited choice offer (see section 32R).

32P   Limited choice offer

             (1)  A limited choice offer must be given to the employee in writing and contain the following information:

                     (a)  the name of the funds from which the employee may choose a chosen fund for the employee (section 32Q sets out the choices that must be provided);

                     (b)  the day on which the offer is made and the day by which the employee must make a choice (as specified by section 32S);

                     (c)  the name of each fund that will be a default fund if the employee does not make a choice under section 32S;

Note:       Section 32K sets out the funds that will be default funds.

                     (d)  information in relation to each of the funds (including the default funds) that is required, under the regulations, to be included in the offer;

                     (e)  if the regulations require additional information in relation to each of the funds (including the default funds) to be made available to the employee—where and when that additional information may be accessed by the employee;

                      (f)  if the employee is a member of a defined benefits scheme—information in relation to that scheme that is required, under the regulations, to be included.

             (2)  The regulations may require additional information in relation to funds to be made available to employees and may prescribe where and when such information is to be made available.

32Q   Choices that must be offered in a limited choice offer

             (1)  For a limited choice offer to be valid, the offer must give the employee at least 4 choices from which to choose. Each choice must be an eligible choice fund for the employer. The choices must comply with the requirements of this section at the time that the offer is made.

             (2)  The employee must be eligible to be a member of each of the funds offered.

             (3)  At least one public offer superannuation fund must be a choice.

             (4)  At least one RSA or capital guaranteed fund must be a choice.

             (5)  If there is one or more:

                     (a)  standard employer-sponsored funds of which the employer is a standard employer-sponsor and of which the employee is eligible to be a member; or

                     (b)  exempt public sector superannuation schemes of which the employee is eligible to be a member as a result of the employee’s employment with the employer;

at least one of those funds or schemes must be a choice.

             (6)  If there is one or more industry-based superannuation funds of which the employee is eligible to be a member—at least one of those funds must be a choice.

             (7)  If a fund is covered by 2 or more of subsections (3) to (6), the fund may only be used to satisfy one of those subsections. The employer may select the subsection that the fund satisfies.

32R   Unlimited choice offer

             (1)  An unlimited choice offer must be given to the employee in writing and contain the following information:

                     (a)  a statement that the employee may choose any eligible choice fund for the employer as a chosen fund for the employee;

                     (b)  the day on which the offer is made and the day by which the employee must make a choice (as specified by section 32S);

                     (c)  the name of each fund that will be a default fund if the employee does not make a choice under section 32S;

Note:       Section 32K sets out the funds that will be default funds.

                     (d)  information in relation to the default funds that is required, under the regulations, to be included in the offer;

                     (e)  if the regulations require additional information in relation to the default funds to be made available to the employee—where and when that additional information may be accessed by the employee;

                      (f)  if the employee is a member of a defined benefits scheme—information in relation to that scheme that is required, under the regulations, to be included.

             (2)  The regulations may require additional information in relation to funds to be made available to employees and may prescribe where and when such information is to be made available.

32S   Time for response

                   If the employee wants a fund to be a chosen fund for the employee, the employee must give the employer written notice to that effect within 28 days of being given the offer by the employer. A choice made after this time is not effective unless the employer agrees to accept it.

32T   Limits on funds that may be chosen

             (1)  If the employer has given the employee a limited choice offer under section 32P, the fund chosen by the employee must be one of the choices offered by the employer.

             (2)  If the employer has given the employee an unlimited choice offer under section 32R, the fund chosen by the employee must be an eligible choice fund for the employer at the time that the choice is made.

32U   Employer may request notice that fund is complying

                   If the employer has given the employee an unlimited choice offer under section 32R and the employee has chosen a fund, the employer may request the employee to provide to the employer, within 28 days of the request:

                     (a)  a written statement of the kind referred to in subsection 24(1) in relation to the fund; or

                     (b)  a written statement of the kind referred to in subsection 25(1) in relation to the fund.

Note:          If the employer does not receive the statement within the time specified, the fund will cease to be an eligible choice fund and will therefore cease to be a chosen fund of the employee.

Division 7 Miscellaneous

32V   Application of Part to different employers of an employee

                   This Part applies separately to each employer of an employee. For example, a fund that is a chosen fund of an employee as a result of an offer by an employer is only a chosen fund in relation to the operation of these provisions to that employer.

32W   Notional earnings base to continue to be used

             (1)  This section applies if:

                     (a)  an employer is contributing to a fund (the choice fund ) that is a chosen fund or a default fund of an employee; and

                     (b)  it is reasonable to assume that, if the choice of fund requirements did not apply, the employer would instead have contributed to a different fund (the other fund ) for the benefit of that employee; and

                     (c)  contributions to the other fund would not have been covered by subsection 23(5).

             (2)  This section also applies if:

                     (a)  an employer is contributing to a fund (the choice fund ) that is a chosen fund or a default fund of an employee; and

                     (b)  it is reasonable to assume that, if the choice of fund requirements did not apply, that a reduction in the charge percentage for the employer would have been made under subsection 22(2) as a result of a scheme (the other fund ) for the benefit of that employee.

             (3)  In working out the reduction in the charge percentage under subsection 23(2), (3), (4), (4A) or (4D) as a result of a contribution to the choice fund, the employee’s notional earnings base is taken to be equal to the lesser of that notional earnings base and the amount that would have been the employee’s notional earnings base if the contribution had been made to the other fund, or the reduction had been made under subsection 22(2) as a result of the other fund (as the case requires).

             (4)  In working out the reduction in the charge percentage under subsection 23(5) as a result of a contribution to the choice fund, the employee’s ordinary time earnings are taken to be equal to the lesser of those ordinary time earnings and the amount that would have been the employee’s notional earnings base if the contribution had been made to the other fund, or the reduction had been made under subsection 22(2) as a result of the other fund (as the case requires).

32X   Contributions satisfy Commonwealth or Territory industrial award requirements

                   A requirement in a Commonwealth industrial award or a Territory industrial award that an employer make contributions to a superannuation fund on behalf of an employee is not enforceable to the extent that the employer instead makes the contributions on behalf of the employee, in compliance with this Part, to another superannuation fund that is a chosen fund or a default fund.

32Y   Employers not liable for damages

                   An employer is not liable to compensate any person for loss or damage arising from anything done by the employer in complying with this Part.



 

33  Section 52

Repeal the section.

34  Subsection 53(3)

Repeal the subsection.

35  Subsection 56(1)

Omit “52,”.

36  Subsection 62(1)

After “employee”, insert “unless the RSA is a chosen fund for the employee under Part 3A of the Superannuation Guarantee (Administration) Act 1992 ”.



 

37  Section 10 (definition of regulated document )

Omit “public offer”, substitute “superannuation”.

38  Section 10 (paragraph (v) of the definition of reviewable decision )

Omit “164”, substitute “148D”.

39  Section 10 (paragraph (w) of the definition of reviewable decision )

Omit “166”, substitute “148F”.

40  Section 10 (definition of stop order )

Omit “164”, substitute “148D”.

41  Before section 114

Insert:

Division 1 Preliminary

42  After section 114

Insert:

Division 2 Certain information to be given to prospective beneficiaries etc. of superannuation entities

114A   Information to be given before superannuation interests issued

             (1)  Subject to subsections (2), (3) and (4), the trustee of a superannuation entity must not, intentionally or recklessly, issue a superannuation interest in the entity to a person unless the trustee is satisfied, on reasonable grounds, that the person has received documents issued, or authorised to be issued, by the trustee that:

                     (a)  contain all the information that the regulations and determinations referred to in section 114D require to be given to the person; and

                     (b)  comply with the formal requirements specified in those regulations and determinations.

Penalty:  100 penalty units.

             (2)  Despite subsection (1), the trustee does not have to be satisfied that the person has received information that relates to an event or change of circumstances that happened after the trustee received the application for the interest.

             (3)  Subsection (1) does not apply if the interest is issued pursuant to an application under Part 24 of this Act or Part 9 of the Retirement Savings Accounts Act 1997 .

             (4)  Subsection (1) does not apply if the interest is issued in circumstances specified in the regulations.

114B   Information to be given on first occasion when superannuation interests are issued under Part 24 , or Part 9 of the Retirement Savings Accounts Act 1997

When section applies

             (1)  This section applies to the issue of a superannuation interest by the trustee of a superannuation entity (the first trustee ) pursuant to an application under Part 24, or Part 9 of the Retirement Savings Accounts Act 1997 , if the application is the first application under those Parts made to the trustee by the applicant. For this purpose, the applicant is the trustee of the transferor fund or RSA provider, as the case requires, referred to in section 243 of this Act or section 89 of the Retirement Savings Accounts Act 1997 .

Information to be given

             (2)  The first trustee must not, intentionally or recklessly, issue the superannuation interest unless the first trustee is satisfied, on reasonable grounds, that the applicant has received documents issued, or authorised to be issued, by the first trustee that:

                     (a)  contain all the information that the regulations and determinations referred to in section 114D require to be given to the applicant; and

                     (b)  comply with the formal requirements specified in those regulations and determinations.

Penalty:  100 penalty units.

Change of circumstances etc.

             (3)  Despite subsection (2), the first trustee does not have to be satisfied that the applicant has received information that relates to an event or change of circumstances that happened after the first trustee received the application.

114C   Information to be given before persons become standard employer-sponsors

             (1)  Subject to subsections (2) and (3), the trustee of a superannuation entity must not, intentionally or recklessly, permit a person to become a standard employer-sponsor of the entity unless the trustee is satisfied, on reasonable grounds, that the person has received documents issued, or authorised to be issued, by the trustee that:

                     (a)  contain all the information that the regulations and determinations referred to in section 114D require to be given to the person; and

                     (b)  comply with the formal requirements specified in those regulations and determinations.

Penalty:  100 penalty units.

             (2)  Despite subsection (1), the trustee does not have to be satisfied that the person has received information that relates to an event or change of circumstances that happened after the trustee received the person’s application to become a standard employer-sponsor of the entity.

             (3)  Subsection (1) does not apply if the person becomes a standard employer-sponsor in circumstances specified in the regulations.

114D  Regulations and determinations requiring the giving of information

             (1)  For the purposes of sections 114A, 114B and 114C, the regulations may:

                     (a)  require that particular information is to be given to persons; and

                     (b)  specify formal requirements that documents used to give information to persons must comply with.

             (2)  Subject to subsection (3), the Commissioner may, for the purposes of sections 114A, 114B and 114C, by written determination:

                     (a)  require that particular information is to be given to persons; and

                     (b)  specify formal requirements that documents used to give information to persons must comply with.

             (3)  A determination must not be inconsistent with regulations referred to in subsection (1).

             (4)  A determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

             (5)  In this section:

formal requirements includes, for example, requirements about layout or type size.

114E   Documents taken to contain information referred to

             (1)  If:

                     (a)  a person has received a document (the received document ) issued, or authorised to be issued, by the trustee of a superannuation entity; and

                     (b)  the received document refers to particular information (the referred information ) being contained in another document issued, or authorised to be issued, by the trustee; and

                     (c)  the requirements of subsections (2), (3) and (4) are satisfied;

then, for the purposes of sections 114A, 114B and 114C, the received document is taken to contain the referred information.

             (2)  The received document must clearly identify:

                     (a)  the other document; and

                     (b)  the nature of the referred information.

             (3)  The received document must include a statement to the effect that the trustee will provide a copy of the other document, free of charge, to a person who asks for it.

             (4)  The trustee must not have failed or refused to provide a copy of the other document free of charge when asked by the person for a copy of it.

Division 3 Miscellaneous

43  Part 18 (heading)

Repeal the heading, substitute:

44  Before section 143

Insert:

Division 1 Preliminary

45  Subsection 143(1)

After “interests”, insert “and regulated documents”.

46  At the end of subsection 143(2)

Add:

             ; and (c)  criminal liability arising from the issue of false or misleading regulated documents (section 148A); and

                     (d)  civil liability arising from the issue of false or misleading regulated documents (section 148B); and

                     (e)  criminal liability arising from the issue of certain statements by experts (section 148C); and

                      (f)  the issue of stop orders in certain circumstances (sections 148D to 148G).

47  Paragraph 144(f)

Omit “public offer entity”, substitute “superannuation entity”.

48  After section 144

Insert:

Division 2 Criminal and civil liability

49  Subsection 148(2)

Omit “162”, substitute “148B”.

50  After section 148

Insert:

148A   Regulated documents not to be false or misleading—criminal liability

                   The trustee of a superannuation entity must not, intentionally or recklessly, issue, or authorise the issue of, a regulated document in relation to the entity if the trustee knows:

                     (a)  that the document contains a material statement that is false or misleading; or

                     (b)  that there has been a material omission from the document.

Penalty:  Imprisonment for 5 years.

148B   Regulated documents not to be false or misleading—civil liability

             (1)  The trustee of a superannuation entity must not issue, or authorise the issue of, a regulated document in relation to the entity:

                     (a)  in which there is a material statement that is false or misleading; or

                     (b)  from which there is a material omission.

             (2)  If:

                     (a)  the trustee of a superannuation entity contravenes subsection (1); and

                     (b)  a person suffers loss or damage because of the contravention;

the person may recover the amount of the loss or damage by action against the trustee.

             (3)  The action may be begun even if the trustee has been convicted of an offence in respect of the conduct constituting the contravention.

             (4)  The action must be begun within 6 years after the day on which the cause of action arose.

             (5)  It is a defence to the action if the trustee proves that, before the person suffered the loss or damage, the person:

                     (a)  if the contravention relates to a false or misleading statement—knew that the statement was false or misleading; or

                     (b)  if the contravention relates to an omission—was aware of the omitted matter.

             (6)  This section does not affect any liability under any other provision of this Act or under any other law.

148C   Statements by experts

             (1)  The trustee of a superannuation entity must not, intentionally or recklessly, issue, or authorise the issue of, a regulated document in relation to the entity that includes a statement made by, or purporting to be based on a statement made by, an expert, unless:

                     (a)  the expert has given written consent to the issue of the document with the statement included in the form and context in which it is included; and

                     (b)  that consent has not been withdrawn before the issue of the document.

Penalty:  Imprisonment for 6 months.

             (2)  The trustee must not, without reasonable excuse, fail to keep the consent, or a copy of it, for the period, and in the manner, required by the regulations.

Penalty:  10 penalty units.

Division 3 Stop orders

148D   Order to stop contracts etc. for issue of superannuation interests in superannuation entities

             (1)  If it appears to the Commissioner that any of the circumstances mentioned in subsection (2) exist in respect of a regulated document in relation to a superannuation entity, the Commissioner may, by written order (a stop order ) given to the trustee of the entity, direct that no contract or agreement for the issue of superannuation interests in the entity may be entered into while the stop order is in force.

             (2)  The circumstances are as follows:

                     (a)  there is a material statement in the document that is false or misleading; or

                     (b)  there is a material omission from the document.

148E   When a stop order is in force

                   A stop order:

                     (a)  comes into force when it is made, or, if a later time is specified in the order as the time when the order comes into force, at that later time; and

                     (b)  remains in force until it is revoked under section 148F.

148F   Revocation of stop order

                   The Commissioner may, in writing, revoke a stop order if the Commissioner is satisfied, for whatever reason, that the stop order should no longer have effect.

148G   Effect of stop order

                   While a stop order is in force in relation to a superannuation entity, the trustee of the entity must not, intentionally or recklessly, enter into a contract or agreement for the issue of a superannuation interest in the entity.

Penalty:  Imprisonment for 2 years.

Division 4 Effect of contravention of Part

51  Part 19 (heading)

Repeal the heading, substitute:

52  Paragraph 150(2)(b)

Repeal the paragraph.

53  Subdivision A of Division 3 of Part 19 (heading)

Repeal the heading.

54  Subdivision B of Division 3 of Part 19

Repeal the Subdivision.

55  Division 3 of Part 19

Repeal the Division.

56  Subsection 171(2)

Omit “after the issue of the interest”, substitute “of the applicant being given a notice in accordance with regulations made for the purpose of this subsection”.

57  Division 4 of Part 19

Repeal the Division.

58  Subsection 323(1)

Omit “162(2)”, substitute “148B(2)”.

59  Section 327 (paragraph (a) of the definition of modifiable provision )

After “section 54”, insert “or 148A to 148G”.

60  Section 327 (after paragraph (a) of the definition of modifiable provision )

Insert:

                    (aa)  Division 2 of Part 14; or

61  Section 327 (paragraph (c) of the definition of modifiable provision )

Omit “that section”, substitute “any of those sections”.

62  Section 327 (paragraph (c) of the definition of modifiable provision )

After “provision of”, insert “that Division or”.

63  Section 327 (paragraph (a) of the definition of temporarily modifiable provision )

After “Part 1”, insert “or Division 3 of Part 14”.

64  Section 327 (paragraph (b) of the definition of temporarily modifiable provision )

Omit “, 14”.

65  Section 327 (paragraph (b) of the definition of temporarily modifiable provision )

After “18”, insert “(other than sections 148A to 148G)”.

66  Section 327 (paragraph (c) of the definition of temporarily modifiable provision )

Omit “that Division”, substitute “either of those Divisions”.

67  Application

(1)        The amendments made by items 41, 42, 51, 52, 55, 56, 60, 62 to 64 and 66 of this Schedule apply to acts and omissions on or after 1 July 1999.

(2)        The other amendments made by this Part apply to acts and omissions on or after the commencement of this item.



 

   

1  Subsection 2(2)

Omit “ Taxation Laws Amendment Act (No. 3) 1998 ”, substitute “ Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 1998 ”.

2  Subsection 2(2)

Omit “Schedule 5 to”, substitute “section 2 of”.

3  Subsection 2(2)

Omit “that Schedule”, substitute “that section”.

4  Item 2 of Schedule 2 (heading)

Omit “ 32U ”, substitute “ 32X ”.