295‑265.01 Application of pre‑1 July 88 295‑265.01 Application of pre‑1 July 88 funding credits—limit on choice

295‑265.01 Application of pre‑1 July 88 funding credits—limit on choice

(1) For the purposes of paragraph 295‑265(7)(a) of the Act, this section prescribes the manner in which a superannuation provider in relation to a superannuation fund is to work out the amount applicable to the fund, under subsection 295‑265(6) of the Act, for an income year. (2) The superannuation provider must use an actuary to work out the amount applicable to the fund for an income year. Method 1—Funding credit valuation process (3) The method in section 295‑265.02 (method 1) must be used for an income year, unless: (a) the conditions mentioned in subsection (8) of this section for using the method in section 295‑265.05 (method 2) are met; and (b) the superannuation provider’s actuary decides that using method 2 is appropriate. Amount applicable to the fund (4) Subject to subsection (5), the amount applicable to the fund for an income year is the least of the following amounts: (a) the amount of pre‑1 July 88 funding credits unused at the end of the previous income year; (b) the value of unfunded pre‑1 July 88 liabilities for the income year, determined by the superannuation provider’s actuary in accordance with step 3 of method 1 or method 2; (c) the pre‑1 July 88 taxable contributions for the income year, worked out in accordance with step 4 of method 1 or method 2. (5) The amount identified in accordance with subsection (4) must then be adjusted for all transfers of funding credits and relevant liabilities into or out of the fund. (6) The amounts mentioned in paragraphs (4)(a), (b) and (c), and the amount as adjusted under subsection (5), must be certified by the superannuation provider’s actuary. (7) The superannuation provider must ensure that, on request, the actuary that certifies an amount under subsection (6) provides the superannuation provider with sufficient information to enable another actuary to check the certification. Method 2—Notionally updated funding credit valuation process (8) The superannuation provider may use method 2 for an income year if: (a) the superannuation provider’s actuary can identify, at the start of the income year, that the value of unfunded pre‑1 July 88 liabilities for the income year exceeds the amount that the superannuation provider wishes to specify for the purposes of subsection 295‑265(1) of the Act; and (b) the income year is the first or second year after an income year for which method 1 was used to calculate the amount applicable to the fund. Professional standards must be followed etc. (9) The superannuation provider must ensure that, in making a calculation under or applying method 1 or 2, the superannuation provider’s actuary: (a) follows any professional standards prepared by the Institute of Actuaries of Australia; and (b) has regard to any professional guidance notes prepared by the Institute of Actuaries of Australia; that relate to the determination of accrued benefits mentioned in method 1 or 2. Superannuation provider must provide information to support working out, if requested (10) The superannuation provider must, if requested to do so by the Commissioner, provide the Commissioner with sufficient information to support the provider’s working out of the amount applicable to the fund under subsection 295‑265(6) of the Act for an income year.