{"id":"F2023L01066","name":"Superannuation Technical Determination No. 1 of 2023 – Actual and benchmark return formulae modifications","slug":"superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":104724,"registerId":"commonwealth-F2023L01066-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Authority, commencement and interpretation","content":"# Part 1 – Authority, commencement and interpretation\n\n1 Name of legislative instrument\n\nThis instrument is Superannuation Technical Determination No. 1 of 2023 – Actual and benchmark return formulae modifications.\n\n2 Commencement\n\nThis instrument commences on the day after it is registered on the Federal Register of Legislation.\n\nNote: The register may be accessed at [www.legislation.gov.au](http://www.legislation.gov.au).\n\n3 Authority\n\nThis instrument is made under subregulations 9AB.12(4A) and 9AB.14(9A) of the Superannuation Industry (Supervision) Regulations 1994.\n\n4 Definitions\n\nIn this instrument:\n\nAct means Superannuation Industry (Supervision) Act 1993.\n\nactual return formula means the formula specified in subregulation 9AB.12(2) of the Regulations.\n\nbenchmark return formula means the formula specified in subregulation 9AB.14(2) of the Regulations.\n\nchange of lifestage, in relation to a lifecycle Part 6A product, means if the following circumstances exist:\n\n(a) the product has particular lifestages at the end of a quarter in a lookback period for the product in respect of a financial year; and\n\n(b) the product has different lifestages at the end of a later quarter in the lookback period.\n\nNote 1: A later quarter mentioned in paragraph (b) must immediately follow the quarter mentioned in paragraph (a).\n\nNote 2: For the lookback period, a lifecycle Part 6A product may undergo one or more changes of lifestage.\n\nchange event means the date of a change of lifestage in relation to a lifecycle Part 6A product other than due to:\n\n(a) the deletion of a lifestage catering to an older membership cohort due to insufficient members; or\n\n(b) the creation of a lifestage to cater for a younger membership cohort.\n\nday X means the day prior to the change event.\n\nlifecycle Part 6A product has the meaning given in regulation 9AB.3 of the Regulations.\n\nlookback period has the meaning given in regulation 9AB.6 of the Regulations.\n\nMySuper product has the meaning given in subsection 10(1) of the Act.\n\nPart 6A product has the meaning given in section 60B of the Act.\n\nRegulations means the Superannuation Industry (Supervision) Regulations 1994.\n\n5 Application\n\nThis instrument applies to an RSE licensee of a superannuation entity that offers a Part 6A product that is both a MySuper product and a lifecycle Part 6A product.","sortOrder":0},{"sectionNumber":"Part 2","sectionType":"part","heading":"Determination of modifications to the actual return formula and benchmark return formula","content":"# Part 2 - Determination of modifications to the actual return formula and benchmark return formula\n\n6 Circumstances where modifications to the formulae applies\n\nThe modifications to the actual return formula and benchmark return formula specified in sections 7 and 8 apply to a lifecycle Part 6A product if there has been a change of lifestage.\n\n7 Modifications to the actual return formula\n\n(1) The actual return for a lifecycle Part 6A product is the amount calculated using the actual return formula, as modified in the way specified in subsection (2).\n\n(2) In relation to a quarter during which a change event occurs, modify the actual return formula by substituting the definition of “lifestage weight” in subregulation 9AB.4(1) with:\n\n“(1) The lifestage weight of a Part 6A product for the period from:\n\n(a) the beginning of the quarter to Day X is:\n\n(i) the market value at the end of the previous quarter of all investments supporting the Part 6A product that are referable to the lifestage;\n\ndivided by;\n\n(ii) the market value at the end of the previous quarter of all investments supporting the Part 6A product that are referable to a lifestage of the Part 6A product;\n\n(b) the change event to the end of the quarter is:\n\n(i) the market value at the end of the current quarter of all investments supporting the Part 6A product that are referable to the lifestage;\n\ndivided by;\n\n(ii) the market value at the end of the current quarter of all investments supporting the Part 6A product that are referable to a lifestage of the Part 6A product.”\n\n8 Modifications to the benchmark return formula b\n\n(1) The benchmark return for a lifecycle Part 6A product is the amount calculated using the benchmark return formula, as modified in the way specified in subsections (2) to (5).\n\n(2) In relation to a quarter during which a change event occurs, modify the benchmark return formula by substituting the definition of “lifestage weight” in subregulation 9AB.4(1) of the Regulations with:\n\n“(1) The lifestage weight of a Part 6A product for the period from:\n\n(a) the beginning of the quarter to Day X is:\n\n(i) the market value at the end of the previous quarter of all investments supporting the Part 6A product that are referable to the lifestage;\n\ndivided by;\n\n(ii) the market value at the end of the previous quarter of all investments supporting the Part 6A product that are referable to a lifestage of the Part 6A product;\n\n(b) the change event to the end of the quarter is:\n\n(i) the market value at the end of the current quarter of all investments supporting the Part 6A product that are referable to the lifestage;\n\ndivided by;\n\n(ii) the market value at the end of the current quarter of all investments supporting the Part 6A product that are referable to a lifestage of the Part 6A product.”\n\n(3) In relation to a quarter during which a change event occurs, for the part of a quarter from change event to end of the quarter, modify the benchmark return formula by substituting “SAAa,j,t-1” with “SAAa,j,t”.\n\n(4) Subsection (5) applies if a change event occurs at a time other than the end of a quarter.\n\n(5) For the purposes of the definition of index in regulation 9AB.5A of the Regulations, if the value of the assumed index for a covered asset class with ‘unlisted’ in its description in the table in subregulation 9AB.17(7) of the Regulations is not available on Day X, for the periods from:\n\n(a) the start of the quarter to Day X; and\n\n(b) the change event to the end of the quarter,\n\nderive an index value at Day X through linear interpolation using the index values available immediately before and after Day X.\n\nNote: The derived index value will then be used in the formula specified in the definition of index in regulation 9AB.5A of the Regulations to calculate an index amount. The index amount will in turn be used in the benchmark return formula.","sortOrder":1}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The instrument does not expand which products are covered. It applies only to RSE licensees offering MySuper lifecycle Part 6A products (s5) and alters calculation mechanics for quarters with a lifestage change (ss 6–8), rather than changing the statutory scope of covered products or regulatory powers."},"complexity_factors":["Cross-references to multiple existing provisions (Regulations 9AB.4, 9AB.5A, 9AB.12, 9AB.14, 9AB.17) increase legal-technical coupling (see instrument authority and defs; ss 3–4, 7–8).","Timing precision: concept of a change event and 'Day X' requires splitting a quarter into two calculation periods and reconciling period-allocated values (definitions and ss 6–8).","Data requirements: market values at end of previous and current quarters for each lifestage are explicitly required for weight calculations (s7(2), s8(2)).","Benchmark adjustment: substitution of SAAa,j,t-1 with SAAa,j,t for the post-change portion alters the strategic asset allocation term for that subperiod (s8(3)).","Index availability and interpolation: linear interpolation for ‘unlisted’ indices if unavailable on Day X introduces numerical-estimation steps and potential rounding or data-timing issues (s8(5)).","Narrow applicability: applies only to products that are both MySuper and lifecycle Part 6A, but administrators must detect and treat change events specifically (s5–6).","Compliance burden and operational risk: requires system changes to compute split-period weights, switch allocation parameters mid-quarter, and derive indices by interpolation where market data are missing (ss 7–8)."],"plain_english_summary":"Modifies how actual and benchmark returns are calculated for MySuper lifecycle Part 6A products when a product’s lifestage changes mid‑quarter. It splits lifestage weights into two subperiods (before and after the change) using market values at the previous and current quarter ends, adjusts the benchmark’s strategic allocation term for the post‑change period, and requires linear interpolation for missing unlisted asset indices on Day X.\n\nApplies to RSE licensees offering such products; it changes measured returns and benchmarking during intra‑quarter lifestage moves, so administrators must use specified market values and interpolation to compute weights and indices, affecting performance reporting and compliance."},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The instrument remains tightly scoped to its original purpose. It addresses a specific technical gap in performance calculations for lifecycle MySuper products during lifestage transition periods. The modifications are precisely targeted at the formulae in regulations 9AB.12 and 9AB.14, with no expansion beyond the mathematical adjustments needed for mid-quarter lifestage changes."},"complexity_factors":["Heavy reliance on defined terms from external regulations (9 defined terms, 7 of which reference other legislative instruments)","Nested conditional logic: modifications only apply if specific circumstances exist (change of lifestage) AND the change isn't due to specific excluded reasons (deletion due to insufficient members or creation for younger cohorts)","Mathematical formula modifications requiring substitution of definitions within definitions","Temporal complexity: splits single quarters into two distinct periods with different calculation bases","Cross-references to at least 6 different provisions across the Superannuation Industry (Supervision) Act 1993 and Regulations 1994","Technical financial concepts requiring domain knowledge: strategic asset allocation (SAA), linear interpolation, market value attribution to lifestages, index derivation for unlisted asset classes"],"plain_english_summary":"This instrument fixes how performance and benchmark returns are calculated for lifecycle MySuper products when an age-based lifestage changes mid-quarter. It treats the quarter as two periods, uses the appropriate post-change strategic asset mix, and permits linear interpolation for unlisted asset values so mid-quarter estimates are workable.\n\nIt affects RSE licensees running lifecycle MySuper options and fund members by ensuring fairer, more accurate reporting during lifestage transitions."}},"importantCases":[],"_links":{"self":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio","history":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio/history","analysis":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio/analysis","conflicts":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio/conflicts","importantCases":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio/important-cases","documents":"/api/acts/superannuation-technical-determination-no-1-of-2023-actual-and-benchmark-return-formulae-modificatio/documents"}}