Retirement Savings Accounts Act 1997

The primary purpose is to pay you money when you retire or reach a certain age. It can also pay benefits if you die before retirement (to your dependants), if you become seriously ill, or if your employment is terminated.

Life insurance companies can only offer RSAs as insurance policies, while banks offer them as deposit accounts.

Who Does This Law Affect?

If you hold an RSA:

• Your savings are protected — the balance cannot be reduced by investment losses
• You cannot use your RSA as security for a loan (no mortgages or charges over it)
• Your benefits cannot be signed over (assigned) to someone else
• You have access to a formal complaints system if something goes wrong

If you are an employer:

• You must comply with data and payment standards when making contributions to employees' RSAs
• You must deal with contribution payments and information in prescribed electronic formats
• APRA or the Tax Office can direct you to fix non-compliance

If you work for a bank, insurer, or other RSA provider:

• Your organisation must keep detailed records for at least 5–10 years
• Independent auditors must review compliance annually
• Auditors have legal obligations to report suspected law-breaking to regulators
• Penalties apply for misconduct, false records, or misleading auditors

Who Regulates RSAs?

Three different government bodies share oversight — which can be confusing:

• APRA — approves and supervises RSA institutions, handles prudential (financial safety) matters
• ASIC (Australian Securities and Investments Commission — the corporate and financial markets watchdog) — handles disclosure of information to consumers and record-keeping
• Commissioner of Taxation (ATO) — handles tax file number rules, portability (transferring money between accounts), and employer contribution data/payment standards

Key Protections for You

1. Your money is safe from losses — capital guarantee is legally enforced
2. Your RSA cannot be used as collateral for debt
3. Complaint resolution — providers must be members of a recognised external dispute resolution scheme (AFCA) and have internal complaint procedures
4. Strict penalties for providers who break the rules — including fines and imprisonment for serious misconduct

Why Does This Matter?

RSAs are a low-cost, low-risk alternative to traditional superannuation funds. This law ensures that the retirement savings of everyday Australians held in RSAs are protected, properly managed, and subject to government oversight. The law essentially mirrors many protections found in superannuation law, adapted for the simpler bank/insurer product structure.