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Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019

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8655

2019

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

 

Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019

 

 

(1)     Schedule 1, item 1, page 3 (line 8),at the end of the heading to section 68AAB, add “ in relation to choice products ”.

[low-balance accounts and members under 25 years old]

(2)     Schedule 1, item 1, page 3 (line 11), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(3)     Schedule 1, item 1, page 3 (lines 26 and 27), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(4)     Schedule 1, item 1, page 4 (line 30), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(5)     Schedule 1, item 1, page 4 (line 33), at the end of the heading to section 68AAC, add “ in relation to choice products ”.

[low-balance accounts and members under 25 years old]

(6)     Schedule 1, item 1, page 5 (line 1), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(7)     Schedule 1, item 1, page 5 (lines 11 and 12), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(8)     Schedule 1, item 1, page 5 (after line 29), after section 69AAC, insert:

68AACA   Benefits providing by taking out insurance—MySuper members with low-balance account or who are under 25 years old

             (1)  Each trustee of a regulated superannuation fund must ensure that a benefit is not provided by the fund to, or in respect of, a member of the fund under a MySuper product held by the member by taking out or maintaining insurance if:

                     (a)  both of the following apply:

                              (i)  the member has an account balance with the fund that relates to the product that is less than $6,000;

                             (ii)  on or after 1 November 2019, the member has not had an account balance with the fund that relates to the product that was equal to or greater than $6,000; or

                     (b)  the member is under the age of 25 years.

             (2)  This section does not apply to:

                     (a)  a defined benefit member; or

                     (b)  an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015 ); or

                     (c)  a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992 , a chosen fund for contributions for the person’s superannuation by the Commonwealth; or

                     (d)  a member to whom the employer-sponsor contribution exception applies (see section 68AAE).

             (3)  Nothing in this section affects a right of a member of a regulated superannuation fund if:

                     (a)  the right relates to insurance cover; and

                     (b)  in compliance with this section, an insurance premium in relation to the member for that insurance cover ceases to be paid; and

                     (c)  the right exists because of insurance premiums paid in relation to the member before insurance premiums cease to be paid as mentioned in paragraph (b).

             (4)  Nothing in this section affects a right of a member of a regulated superannuation fund if:

                     (a)  the right is a right to insurance cover for a fixed term, subject only to the payment of insurance premiums; and

                     (b)  that fixed term begins before the time at which a trustee of the fund is required under subsection (1) to ensure that a benefit is not provided to, or in respect of, the member under a MySuper product held by the member by taking out or maintaining insurance.

[low-balance accounts and members under 25 years old]

(9)     Schedule 1, item 2, page 5 (line 32), omit “ and 68AAC ”, substitute “ 68AAC and 68AACA ”.

[low-balance accounts and members under 25 years old]

(10)   Schedule 1, item 3, page 5 (line 35), omit “and 68AAC”, substitute “68AAC and 68AACA”.

[low-balance accounts and members under 25 years old]

(11)   Schedule 1, item 5, page 6 (line 6), omit “or 68AAC”, substitute “, 68AAC or 68AACA”.

[low-balance accounts and members under 25 years old]

(12)   Schedule 1, page 6 (after line 6), after item 5, insert:

5A  After section 68AA

Insert:

68AB   Commonwealth to provide permanent incapacity benefit and death benefit to certain MySuper members

             (1)  This section applies to a member (the applicable member ) of a regulated superannuation fund under a MySuper product held by the member if:

                     (a)  section 68AACA applies in relation to the product; and

                     (b)  the member does not hold a choice product or another MySuper product with any regulated superannuation fund (including the first-mentioned fund) that provides permanent incapacity benefit and death benefit to the member.

             (2)  APRA, on behalf of the Commonwealth, must provide permanent incapacity benefit and death benefit to the applicable member in accordance with:

                     (a)  if the member holds a MySuper product with only one regulated superannuation fund—the policy of insurance that fund has taken out for the purposes of section 68AA; or

                     (b)  otherwise—the policy of insurance determined by APRA under subsection (3).

             (3)  If the applicable member holds a MySuper product with more than one regulated superannuation fund, APRA must determine, from the policies of insurance those funds have taken out for the purposes of section 68AA, the policy the provision of permanent incapacity benefit and death benefit must be in accordance with.

             (4)  In making a determination for the purposes of subsection (3), APRA must take into account any matters specified in the regulations made for the purposes of this subsection.

             (5)  The regulation s may prescribe circumstances in which APRA is not to provide permanent incapacity benefit and death benefit under this section.

[low-balance accounts and members under 25 years old]

(13)   Schedule 1, item 6, page 6 (lines 9 to 16), omit the item, substitute:

6  At the end of paragraph 20QA(1)(a)

Add:

                            (ix)  no benefit that despite section 68AAB of the SIS Act could, because of the application of subsection 68AAB(5) or (6) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

                             (x)  no benefit that despite section 68AACA of the SIS Act could, because of the application of subsection 68AACA(3) or (4) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

[low-balance accounts and members under 25 years old]

(14)   Schedule 1, item 7, page 6 (lines 17 to 19), omit the item, substitute:

7  Subsection 20QA(3)

Omit “subparagraphs (1)(a)(iv), (v) and (viii)”, substitute “subparagraphs (1)(a)(iv), (v), (viii), (ix) and (x)”.

[low-balance accounts and members under 25 years old]

(15)   Schedule 1, item 8, page 7 (line 9), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(16)   Schedule 1, item 8, page 8 (line 6), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(17)   Schedule 1, item 8, page 8 (line 22), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(18)   Schedule 1, item 9, page 9 (line 11), omit “or MySuper product”.

[low-balance accounts and members under 25 years old]

(19)   Schedule 1, page 9 (after line 13), after item 9, insert:

9A  Application of sections 68AACA and 68AB

(1)       Section 68AACA of the Superannuation Industry (Supervision) Act 1993 (the SIS Act ), as inserted by item 1 of this Schedule, applies in relation to a benefit provided by a regulated superannuation fund to, or in respect of, a member of the fund under a MySuper product held by the member, if the member becomes such a member on or after 1 February 2020.

(2)       Section 68AB of the SIS Act, as inserted by item 5A of this Schedule, applies in relation to a member of a regulated superannuation fund under a MySuper product held by the member to which that section applies if the Consolidated Revenue Fund is appropriated for the purposes of providing permanent incapacity benefit and death benefit to such a member under that section.

[low-balance accounts and members under 25 years old]