Obligation to Obtain RSE Licence

Responding to public concerns about the safety of their superannuation, the Parliament of Australia enacted the Superannuation Safety Amendment Act 2004 which amended the provisions of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

These amendments empowered APRA to license trustees and to register the funds they administered.

There are three classes of licence, namely:

  • public offer entity licence – enables holders to operate public offer RSE;
  • non-public offer licence – enables holders to operate RSEs that are not covered by the first class of licence, such as corporate superannuation funds,and
  • extended public entity licences – enabling holders to operate both public offer RSEs and non-public offer RSEs under one RSE Licence.

    If a fund has over 200 members then Section 93 of the SIS Act then the following provisions apply:

    Public offer funds

    If the fund is a public offer fund, then either:

  • The trustee must be an “independent” trustee, or
  • The fund must comply with the basic equal representation rules (Section 89).
  •  

    If the trustee is an “independent” trustee, then a “Policy Committee” must be established for each “sub-fund” in the following circumstances {SIS Regulation 3.05}:

    (a) the trustee of the fund must take all reasonable steps to ensure that, if there are more than 49 of its members (a group ), each of whom:

  • (i) is a standard employer-sponsored member; and
  • (ii) has a standard employer-sponsor who is the, or is an associate of a, standard employer-sponsor of each other member of that group;
  •  

    there is at least 1 policy committee established for that group;

    The functions of a “Policy Committee” are prescribed by SIS Regulation 3.06.

    A fund can be both an employer-sponsored fund and a public offer fund simultaneously. When this occurs, the fund must have an approved trustee regardless of the fact that the fund is a standard employer sponsored fund with equal representation on the trustee board.

    Non-Public offer funds

    If the fund is not a public offer fund, then the fund must comply with the basic equal representation rules (Section 89).

    Basic Equal Representation Rules

    If the fund has a single corporate trustee;

    (ii) the board of the corporate trustee consists of equal numbers of employer representatives and member representatives.

    If a vacancy occurs then the vacancy must be filled within 90 days.

    If the case of a corporate trustee “member representative” means:”

    “a member of the board, nominated by”:

  • (a) the members of the fund; or
  • (b) a trade union, or other organisation, representing the interests of those members
  •  

    The SIS Act does not define “member” for these purposes. Any person with a beneficial interest in the fund should be recognised as a member of the fund and entitled to the protection of the SIS Act. This includes pensioners and beneficiaries with deferred benefits.

    It is not necessary for a “member representative” to be a member of the fund.

    The Voting Rule

    SIS Regulation 4.08 prescribes that where a fund is required to comply with trustee structure rules, no decision can be made by the board in the case of a corporate trustee, unless two-thirds of the total number of directors on the board vote in favour of the decision. Trustees must record the voting or note in the minutes of the meeting that all resolutions were made in accordance with Regulation 4.08.

     

    CUB Policy Committee

    Carlton & United Breweries Superannuation Plan – Policy Committee Rules

    APRA has published guidelines on “Trustee Arrangements”:

    III-A-2-Trustee-Arrangements-for-Superannuation-Funds-other-than-Public-Offer-Funds

    III-A-3-Trustee-Arrangements-Public-Offer-Superannuation-Funds

    What-are-Public-Offer-Entities-Circular-III-A-5


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    This tab updated on 26 January 2016