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Superannuation Safety Amendment Bill 2004

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2002-2003-2004

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

THE SENATE

 

SUPERANNUATION SAFETY AMENDMENT BILL 2003

SUPPLEMENTARY EXPLANATORY MEMORANDUM

Amendments to be moved on behalf of the Government

(Circulated by authority of the Minister for Revenue and Assistant Treasurer,

Senator the Hon Helen Coonan)



 



Table of Contents

Glossary ............................................................................................................ 1

General outline and financial impact .................................................................... 2

Explanation of Amendments ............................................................................... 3

 



 



 

1

Glossary

1.1     The following abbreviations and acronyms are used throughout this explanatory memorandum.

RSA Act

Retirement Savings Accounts Act 1997

SIS Act

Superannuation Industry (Supervision) Act 1993

 



 

2

General outline and financial impact

2.1       The amendments to the Superannuation Safety Amendment Bill 2003 (the Bill):

·        extend the Regulator’s powers to modify or exempt trustees from certain provisions contained in the SIS Act so that they also apply to amendments concerning compliance with equal representation requirements; and

·        clarify the operation of materiality provisions relating to reporting by actuaries and auditors so that it is clear they apply to reporting to the Regulator and not to trustees.

2.2       Date of Effect:   The amendments will commence on proclamation at the same time as the amendments contained in Schedule 1, Part 1 and Schedule 3 of the Bill.

2.3       Proposal announced:   The reforms contained in the Bill were announced in the Minister for Revenue and Assistant Treasurer’s Press Release C114/02 of 28 October 2002.  The amendments to the Bill have not been previously announced.

2.4       Financial impact:   The amendments to the Bill will not have any financial impact.

2.5       Regulation impact statement:   The impact of the reforms to the prudential regulation of superannuation contained in the Bill was set out in the Regulation Impact Statement included in the Explanatory Memorandum to the Bill.  The amendments to the Bill do not alter the Regulation Impact Statement.

 



 

3

Explanation of Amendments

Amendment 1

3.1       Amendment 1 amends the definition of ‘modifiable provision’ in section 327 of the SIS Act so that the provisions contained in Item 47 of Schedule 1, Part 1 of the Bill are modifiable provisions for the purposes of the exemption and modification powers given to the Regulator under Part 29 of the SIS Act.

3.2       Item 47 of Schedule 1, Part 1 of the Bill includes new provisions in section 63 of the SIS Act to make it mandatory for non-public offer funds not to accept contributions from an employer-sponsor while they are in breach of the equal representation rules contained in Part 9 of the SIS Act.

3.3       Amendment 1 gives the Regulator the power to exercise some discretion to modify or exempt trustees from these requirements if particular circumstances merited such an exemption or modification.

Amendments 2 to 37

3.4       Amendments 2 to 37 clarify the operation of materiality provisions relating to reporting by actuaries and auditors contained in Schedule 3 of the Bill so that it is clear they apply to reporting to the Regulator and not to reporting to trustees.

Amendments to the RSA Act

3.5       Amendments 2 to 12 clarify the operation of materiality provisions with respect to reporting under section 66 of the RSA Act.  Section 66 establishes requirements for auditors to report likely contraventions of the RSA Act and regulations.  These amendments will require that all matters that fall within section 66 of the RSA Act must be reported to RSA providers.  This is consistent with the current operation of section 66 of the RSA Act.  The amendments will also require that the Regulator must be informed of matters that fall within section 66 only if they may affect the interests of holders of Retirement Savings Accounts.  The amendments reflect these distinctive reporting requirements by creating separate offences with respect to providing misinformation regarding having reported matters under section 66 to the RSA provider and having reported material matters under section 66 to the Regulator.

Amendments to the SIS Act

3.6       Amendments 13 to 23 clarify the operation of materiality provisions with respect to reporting under section 129 of the SIS Act.  Section 129 establishes requirements for actuaries and auditors to report likely contraventions of the SIS Act and regulations.  These amendments will require that all matters that fall within section 129 of the SIS Act must be reported to a trustee of the entity.  This is consistent with the current operation of section 129 of the SIS Act.  The amendments will also require that the Regulator must be informed of matters that fall within section 129 only if they may affect the interests of members or beneficiaries of the entity.  The amendments reflect these distinctive reporting requirements by creating separate offences with respect to providing misinformation regarding having reported matters under section 129 to a trustee of the entity and having reported material matters under section 129 to the Regulator.  These amendments include technical amendments which clarify that provisions inserted by Item 7 of the Bill apply to trustees of entities and are not restricted to applying only to trustees of funds.

3.7       Amendments 24 and 25 are technical amendments which clarify that provisions inserted by Item 9 of the Bill apply to trustees of entities and are not restricted to applying only to trustees of funds.

3.8       Amendments 26 to 37 clarify the operation of materiality provisions with respect to reporting under section 130C to be inserted by Item 14 of Schedule 3, Part 2 of the Bill.  Section 130C establishes requirements for actuaries and auditors to report failures to implement actuarial recommendations regarding contributions by employer-sponsors to defined benefit funds.  These amendments will require that all matters that fall within section 130C of the SIS Act must be reported to a trustee of the fund.  The amendments will also require that the Regulator must only be informed of matters that fall within section 130C if they may affect the interests of members or beneficiaries of the fund.  These amendments reflect these distinctive reporting requirements by creating separate offences with respect to providing misinformation regarding having reported matters under section 130C to a trustee of the fund and having reported material matters under section 130C to the Regulator.