(b) identify any event relating to the fund that, if the event occurs during the period when the certificate is in force, should, in the opinion of the superannuation actuary, require the certificate to cease to have effect and a new certificate to be obtained; and
(c) specify the date on which the certificate expires, in accordance with subregulation (10); and
(d) certify the minimum contributions reasonably expected by the superannuation actuary to be required to secure the solvency of the fund at the end of the period of technical insolvency; and
(e) certify the improvement (if any) in the level of the minimum benefit index from its level at the effective date of the immediately preceding funding and solvency certificate relating to the fund.
(10) The date specified under paragraph (9)(c) as the date on which the certificate expires must be a date that is 12 months after the effective date of the certificate.
9.19 Technical insolvency programs—procedure
(1) This regulation sets out the procedure to be followed in relation to a defined benefit fund to which this Division applies during any period of technical insolvency of the fund.
(2) An employer‑sponsor of the fund must continue to pay contributions that are not less than the certified minimum contributions as required under regulation 9.08.
(3) The trustee of the fund must secure the services of a superannuation actuary for the fund who accepts responsibility for the actuarial management of the fund during the period of technical insolvency, including responsibility for the provision of special funding and solvency certificates and any approvals required under subregulation (4).
(4) The trustee must not make any payment from the fund unless, in respect of a payment:
(a) the responsible actuary gives written approval for that particular payment to be made; or
(b) the amount of the payment is determined in accordance with a scheme for payment approved in writing by the responsible actuary.
(5) If, during a period of technical insolvency of a fund, the responsible actuary for the fund is no longer willing or able to accept responsibility for the fund, the responsible actuary must, if practicable, inform the Regulator and the trustee that this is the case, giving the actuary’s reasons.
(6) As soon as a trustee of a fund becomes aware that the responsible actuary for the fund is no longer willing or able to accept responsibility for the fund, the trustee must secure the services of another responsible actuary in accordance with subregulation (3) and must inform the Regulator of the change in the fund’s responsible actuary.
Division 9.4—Winding‑up of defined benefit funds
9.20 Application
This Division applies only to defined benefit funds other than:
(a) funds that are part of one of the following schemes:
(i) the scheme established by the Superannuation Act 1976;
(ii) the scheme established under the provisions of the Superannuation Act 1990;
(iii) the Military Superannuation and Benefits Scheme; and
(b) funds that are part of an exempt public sector superannuation scheme; and
(c) funds that have never been used to reduce or remove the superannuation guarantee charge imposed by section 5 of the Superannuation Guarantee Charge Act 1992.
9.21 Interpretation
(1) In this Division:
benefit entitlements of former members has the same meaning as in subregulation 9.15(2).
funded minimum requisite benefit has the same meaning as in subregulation 9.15(2).
minimum benefit index at the winding‑up date, in relation to a defined benefit fund, means an index calculated in accordance with regulation 9.15 except that the net realisable value of the assets is, for the purposes of the calculation, taken to be the net realisable value of the assets at the winding‑up date as defined by this Division.
net realisable value of the assets at the winding‑up date, in relation to a defined benefit fund, means the amount calculated by deducting the sum of:
(a) the actual cost of disposing of the assets of the fund; and
(b) the administration, and other, costs associated with the winding‑up proceedings being carried out in relation to the fund in accordance with this Division;
from the amount received on realisation of the assets of the fund.
period of technical insolvency has the same meaning as in Division 9.3.
responsible actuary, in relation to a defined benefit fund, means an actuary who, under subregulation 9.19(3), accepted responsibility for the fund during its period of technical insolvency.
winding‑up date, in relation to a defined benefit fund, means the date at which the trustee determines the allocations to be made, under the winding‑up proceedings, to members of the fund in respect of their benefit entitlements.
(2) In this Division, a reference to the solvency of a fund is to be read as a reference to the fund’s minimum benefit index, as that term is defined in Division 9.3, being certified in accordance with that Division as not less than 1.
(3) In this Division, a reference to the technical insolvency of the fund is to be read as a reference to the fund’s minimum benefit index, as that term is defined in Division 9.3, not being able to be certified in accordance with that Division as not less than 1.
9.22 Prescription of standards
For the purposes of subsection 31(1) of the Act, the standards contained in regulations 9.23, 9.24 and 9.25 are prescribed as standards applicable to the operation of defined benefit funds to which this Division applies.
9.23 Winding‑up of defined benefit funds
(1) Subject to subregulation (4), the trustee of a defined benefit fund that is technically insolvent must initiate winding‑up proceedings in accordance with this Division if:
(a) the fund fails to comply with regulations 9.17, 9.18 or 9.19 during the period of technical insolvency; or
(b) the superannuation actuary is unable to certify the solvency of the fund at the end of that period;
and regulation 9.24 does not apply.
(2) Winding‑up proceedings initiated under subregulation (1) must be carried out in accordance with this Division.
(3) Subject to subregulation (4), if a trustee of a defined benefit fund to which this Division applies initiates winding‑up proceedings in relation to the fund otherwise than under subregulation (1), the winding‑up proceedings must be carried out in accordance with this Division.
(4) This regulation does not apply to a defined benefit fund in respect of which the Regulator formulates a scheme for the winding‑up of the fund.
9.24 Alternative programs approved by the Regulator
(1) If, as an alternative to commencing winding‑up proceedings, the responsible actuary of a defined benefit fund recommends in writing to the trustee of the fund a specified course of action, the trustee, if he or she wishes to accept the responsible actuary’s recommendations, must, within 21 days after receiving the recommendations, forward a copy of the recommendations to the Regulator, together with a request that the Regulator approve the recommendations.
(2) If the Regulator approves the responsible actuary’s recommendations, and notifies the trustee in writing of the approval, the trustee must follow the specified course of action as recommended.
9.25 Winding‑up proceedings—priorities
(1) If, under regulation 9.23, winding‑up proceedings in relation to a defined benefit fund are to be carried out in accordance with this Division, priority must be given to the liabilities of the fund in accordance with this regulation.
(2) The first charge on the assets of the fund must be the liability in respect of the administration and other costs associated with the winding‑up proceedings.
(3) In determining the priorities to be given to the remaining liabilities of the fund, the trustee must ensure compliance with subregulations (4) and (5).
(4) If the fund’s minimum benefit index at the winding‑up date is equal to or greater than 1, the benefit entitlement allocated to each individual member of the fund at the winding‑up date must be an amount that is not less than the sum of such part of:
(a) the funded minimum requisite benefit; and
(b) the benefit entitlements of former members;
as is attributable to that individual member.
(5) If the fund’s minimum benefit index at the winding‑up date is less than 1, the benefit entitlement allocated to each individual member of the fund at the winding‑up date must not be either:
(a) greater than the amount referred to in subregulation (4) in respect of that individual member; or
(b) less than an amount calculated by multiplying the amount referred to in subregulation (4) in respect of that individual member by the fund’s minimum benefit index at the winding‑up date.
Division 9.5—Actuarial standards relating to defined benefit funds that are self‑managed superannuation funds
9.26 Application
This Division applies to a defined benefit fund that is a self‑managed superannuation fund.
9.27 Interpretation
In this Division:
accrued benefits, in relation to a member of a defined benefit fund or a defined benefit sub‑fund:
(a) means the benefits to which the member has an absolute or potential entitlement at the valuation date on account of the length of time the member has been a member of the fund or sub‑fund; and
(b) includes any amount that would be payable out of the benefits mentioned in paragraph (a) to the member’s spouse or former spouse under a payment split.
new fund means:
(a) any defined benefit fund established on or after 1 July 1994; or
(b) any fund converted on or after 1 July 1994 to a defined benefit fund;
in respect of which no previous actuarial report has been made.
valuation date, in relation to a defined benefit fund or sub‑fund, means the date on which an investigation required under regulation 9.29 or 9.29A was carried out in relation to the fund or sub‑fund.
9.28 Prescription of standards
For the purposes of subsection 31(1) of the Act, the standards contained in regulations 9.29, 9.29A and 9.30 are prescribed as standards applicable to the operation of defined benefit funds that are self managed superannuation funds.
9.29 Actuarial investigation standard
(1) Subject to regulation 9.29A, a trustee of a defined benefit fund must require an initial actuarial investigation (the first actuarial investigation) to be made in relation to the fund as a whole or each defined benefit sub‑fund in the fund.
(2) If the first actuarial investigation is in relation to the fund as a whole it must be made:
(a) for a defined benefit fund in operation on 30 June 1994—at a date no later than 3 years after:
(i) the date at which the last actuarial investigation of the fund as a whole was made; or
(ii) if no actuarial investigation has been made—the date of establishment of the fund or conversion of the fund to a defined benefit fund; or
(b) for a new fund—at the date of establishment or conversion of the fund.
(3) If the first actuarial investigation is in relation to a defined benefit sub‑fund in the fund it must be made:
(a) for a defined benefit sub‑fund in operation on 30 June 1994—at a date no later than 3 years after:
(i) the date at which the last actuarial investigation of the sub‑fund was made; or
(ii) if no actuarial investigation was made—the date of establishment of the sub‑fund or conversion of the sub‑fund to a defined benefit sub‑fund; or
(b) for a new defined benefit sub‑fund—at the date of establishment or conversion of the sub‑fund.
(4) A trustee of a defined benefit fund or sub‑fund must, after the first actuarial investigation has been made in relation to the fund or sub‑fund, require regular actuarial investigations to be made in relation to the fund or sub‑fund at least every 3 years.
(5) The Commissioner of Taxation may direct the trustee of the fund or sub‑fund, in writing, to require an actuarial investigation to be made in relation to the fund or sub‑fund, if the Commissioner of Taxation considers, on reasonable grounds, that to do so would be:
(a) in the prudential interests of the fund or sub‑fund; and
(b) in the best interests of the members or beneficiaries of the fund or sub‑fund.
(6) The trustee of the fund or sub‑fund must comply with a written direction under subregulation (5).
9.29A Actuarial investigation standard—exemption
(1) Regulation 9.29 does not apply to a defined benefit fund or a defined benefit sub‑fund to which this regulation applies.
(2) This regulation applies to a defined benefit fund or a defined benefit sub‑fund that pays a defined benefit pension to at least one member.
(3) The trustee must require annual actuarial investigations to be made in relation to the fund or sub‑fund, starting from the day that is 1 year after the day on which the fund or sub‑fund made the first defined benefit pension payment.
9.30 Actuarial reporting standard
(1) A trustee of a defined benefit fund or a defined benefit sub‑fund must obtain an actuarial report in accordance with this regulation in relation to each investigation that is required to be made under regulation 9.29 or 9.29A in relation to the fund or sub‑fund.
(2) The actuarial report must be obtained within the period of 12 months commencing on the date immediately following the valuation date in relation to the fund or sub‑fund.
(3) The actuarial report must contain the information mentioned in regulation 9.31.
9.31 Contents of actuarial report
(1) For regulation 9.30, an actuarial report must contain, in addition to any other required information:
(a) a statement of the value of the assets of the fund or sub‑fund at the valuation date; and
(b) a statement of the SMSF actuary’s opinion on whether, at the valuation date, the value of the fund’s or sub‑fund’s assets is adequate to meet the value of the fund or sub‑fund’s liabilities in relation to the accrued benefits of members of the fund or sub‑fund; and
(c) for a regulated superannuation fund that has at least one defined benefit member who is being paid a defined benefit pension from the fund, but which has no defined benefit sub‑funds—a statement of the SMSF actuary’s opinion on whether, at the valuation date, there is a high degree of probability that the defined benefit fund will be able to pay the pension as required under the fund’s governing rules; and
(d) for a defined benefit sub‑fund from which at least one defined benefit member is being paid a defined benefit pension—a statement of the SMSF actuary’s opinion on whether, at the valuation date, there is a high degree of probability that the defined benefit sub‑fund will be able to pay the pension as required under the fund’s governing rules.
(e) a statement recommending, in relation to the 3‑year period immediately following the valuation date:
(i) the rate at which, or the range of rates within which, the SMSF actuary considers employer contributions should be made; or
(ii) if the SMSF actuary considers employer contributions should be made at different rates or within different ranges in respect of 2 or more periods within the 3‑year period—those rates or ranges of rates; and
(f) a statement, made in accordance with subregulations (3) and (4), regarding the financial position of the fund or the sub‑fund; and
(g) if the fund or sub‑fund, has been used to reduce or remove the superannuation guarantee charge imposed by section 5 of the Superannuation Guarantee Charge Act 1992:
(i) a statement that all funding and solvency certificates required under this Part during the period of the investigation to which the report relates were obtained; and
(ii) a statement of the SMSF actuary’s opinion regarding the likelihood of an actuary being able to certify the solvency of the fund or sub‑fund in any funding and solvency certificate that may be required under these regulations during the 3‑year period immediately following the valuation date; and
(h) if a prescribed event for paragraph 342(4)(a) has occurred in relation to the grant or transfer of a pre‑1 July 1988 funding credit—a statement that the prescribed event has occurred.
(2) In forming an opinion mentioned in paragraph (1)(b), (1)(c) or (1)(d), the SMSF actuary must consider:
(a) the position of the fund or sub‑fund at the valuation date; and
(b) the likely future position of the fund or sub‑fund during the 3 years immediately following the valuation date, based on the SMSF actuary’s reasonable expectations.
(3) In making a statement regarding financial position under paragraph (1)(f), the SMSF actuary must indicate whether the financial position of the fund or sub‑fund, is treated as unsatisfactory under regulation 9.04 and whether that position may, in the SMSF actuary’s opinion, be about to become unsatisfactory, taking into consideration the matters referred to in regulation 9.03.
(4) If, in a statement made under paragraph (1)(f), the SMSF actuary considers that the stated financial position of the fund or sub‑fund is dependent on certain actions being taken, or certain schemes being implemented, the SMSF actuary must indicate this and must include in the statement a detailed description of those actions or schemes.
Division 9.6—Solvency of accumulation funds
9.34 Application
This Division applies only to accumulation funds other than:
(a) funds that are part of an exempt public sector superannuation scheme; and
(b) funds that have never been used to reduce or remove the superannuation guarantee charge imposed by section 5 of the Superannuation Guarantee Charge Act 1992.
9.35 Interpretation
(1) In this Division:
fund’s actuary, in relation to an accumulation fund, means a superannuation actuary whose services are secured by the trustee of the fund under subregulation 9.39(2).
mandated employer‑financed benefits has the same meaning as in Part 5.
member financed‑benefits has the same meaning as in Part 5.