Reform Legislation

The last major reform related to the regulation of the compulsory superannuation system, was the Superannuation Safety Amendment Act 2004.The Explanatory Memorandum for the Bill can be found here {Link}.

This Act amended the Superannuation Industry (Supervision) Act 1993 to empower APRA to register large superannuation funds and to licence the Trustees of these funds.

Regulation 11.08 was added to the Superannuation Industry (Supervision) Regulations 1994 which was described in the Explanatory Memorandum as follows:

Subsection 31(1) of the SIS Act allows operating standards to be prescribed in relation to the operation of regulated superannuation funds and to trustees and RSE licensees of those funds.

Regulation 11.08 prescribes an operating standard under which funds must give to APRA early notice, in writing, of an intention to undertake a successor fund transfer or merger.

The transfer, under regulation 6.29 of the SIS Regulations of a member’s benefits to another fund, for example in a fund merger situation, may be undertaken without member consent if the transfer is to a successor fund (as defined in regulation 1.03). The transfer may or may not culminate in the winding up of the fund, depending on whether all or only some members and their benefits are transferred.

For the purposes of subsections 31(1) and 32(1) of the SIS Act, it will be prescribed that a trustee is required to give notice in writing to APRA of a decision to transfer any member’s benefits from the fund without the member’s consent.

Notice to APRA must be given as soon as practicable after making the decision, and in the case of the winding-up of the fund, before the winding-up is commenced. For successor fund transfers, notice should be given to APRA when the decision to seek a successor fund is made, rather than when a final decision is made about the identity of the successor fund.

APRA is then able to maintain up-to-date information and monitor the transfer or merger, thereby ensuring that the rights of beneficiaries are protected.

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This tab updated on 31 August 2015