minimum guaranteed benefit, in relation to a member of an accumulation fund, means an amount that is the sum of:
(a) the member‑financed benefits of the member; and
(b) the mandated employer‑financed benefits of the member; and
(c) any minimum benefits of the member under regulation 5.06B, that are not included in paragraph (a) or (b).
net realisable value, in relation to the assets of an accumulation fund, means the amount calculated by deducting the estimated cost of disposing of the assets of the fund from the market value of those assets.
period of technical insolvency, in relation to an accumulation fund, means the period starting on the first day of the year of income in which the fund becomes technically insolvent or in which the trustee makes an election under subregulation 9.38(2) and ending on:
(a) in the case where the fund is solvent at the beginning of a year of income that is earlier than the sixth year of income following the year of income in which the period starts—the first day of that first‑mentioned year of income;
(b) in any other case—the first day of that sixth year of income.
(2) In this Division, a reference to an accumulation fund being solvent is to be read as a reference to the net realisable value of the assets of the fund being equal to or greater than the minimum guaranteed benefits of members of the fund.
(3) In this Division a reference to an accumulation fund being technically insolvent is to be read as a reference to the net realisable value of the assets of the fund being less than the minimum guaranteed benefits of members of the fund.
9.36 Prescription of standards—accumulation funds
For the purposes of subsection 31(1) of the Act, the standards contained in regulations 9.37, 9.38 and 9.39 are prescribed as standards applicable to the operation of accumulation funds to which this Division applies.
9.37 Accumulation funds solvency standard
(1) Subject to subregulation (2), in a year of income the trustee of an accumulation fund that is solvent at the beginning of the year of income must not add such an amount to the minimum guaranteed benefits of members of the fund, in respect of the earnings of the fund, that would result in the fund being technically insolvent at the end of the year of income.
(2) In a year of income, the trustee of an accumulation fund to which subregulation (1) applies may add an amount referred to in subregulation (1) if the amount is added in accordance with a program referred to in subregulation 9.38(2).
(3) In a year of income, the trustee of an accumulation fund that is technically insolvent at the beginning of the year of income must only add amounts to the minimum guaranteed benefits of members of the fund in accordance with a program referred to in subregulation 9.38(1).
9.38 Technical insolvency of accumulation funds—operating standard
(1) The trustee of an accumulation fund that is technically insolvent must either:
(a) initiate a program in accordance with this Division that is designed by a superannuation actuary to ensure that the fund is in a solvent position not later than at the end of the fifth year of income following the year of income in which the fund became technically insolvent; or
(b) initiate winding‑up proceedings.
(2) The trustee of an accumulation fund to which subregulation (1) does not apply may elect to have the fund comply with a program comparable with a program referred to in paragraph (1)(a), except that the program is designed to ensure that the fund is in a solvent position not later than at the end of the fifth year of income following the year of income in which the trustee made the election.
9.39 Technical insolvency program for accumulation funds—procedure
(1) This regulation sets out the procedure to be followed, in relation to an accumulation fund to which this Division applies, during any period of technical insolvency.
(2) The trustee of the fund must secure the services of a superannuation actuary for the fund, who must, as soon as practicable, design a program of the kind referred to in paragraph 9.38(1)(a) or subregulation 9.38(2) (whichever is applicable) and inform the trustee of the requirements of that program.
(3) The trustee of the fund must not add an amount to the minimum guaranteed benefits of members of the fund during any period of technical insolvency unless:
(a) the addition is approved in writing by the fund’s actuary; or
(b) the amount is added in accordance with a scheme approved in writing by the fund’s actuary for the adding of such amounts.
(4) During any period of technical insolvency of the fund, the trustee of the fund must not make any payment from the fund unless:
(a) the fund’s 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 fund’s actuary.
Division 9.7—Winding‑up of accumulation funds
9.40 Application
This Division applies only to accumulation funds to which Division 9.6 applies.
9.41 Interpretation
(1) In this Division:
fund’s actuary means a superannuation actuary whose services are secured under subregulation 9.39(2).
minimum guaranteed benefit, in relation to a member of an accumulation fund, has the same meaning as in Division 9.6.
net realisable value of the assets at the winding‑up date, in relation to an accumulation fund, means the amount calculated by deducting from the amount received on realisation of those assets the sum of:
(a) the actual cost of disposing of the assets of the fund; and
(b) the administration and other costs associated with winding‑up proceedings in respect of the fund.
period of technical insolvency, in relation to an accumulation fund, has the same meaning as in Division 9.6.
winding‑up date, in relation to an accumulation 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 an accumulation fund being solvent at the winding‑up date is to be read as a reference to the net realisable value of the assets at the winding‑up date being equal to or greater than the minimum guaranteed benefits of members of the fund at that date.
(3) In this Division, a reference to an accumulation fund being technically insolvent at the winding‑up date is to be read as a reference to the net realisable value of the assets at the winding‑up date being less than the minimum guaranteed benefits of members of the fund at that date.
9.42 Prescription of standards—winding‑up of accumulation funds
For the purposes of subsection 31(1) of the Act, the standards contained in regulations 9.43, 9.44 and 9.45 are prescribed as standards applicable to the operation of accumulation funds which this Division applies.
9.43 Winding‑up of accumulation funds
(1) Subject to subregulation (4), the trustee of an accumulation fund to which this Division applies that is in a period of technical insolvency must initiate winding‑up proceedings in accordance with this Division if;
(a) the fund fails to comply with regulation 9.38 or 9.39 during a period of technical insolvency; or
(b) the fund is not solvent within the meaning of that term in subregulation 9.35(2) on the date on which that period ends;
and regulation 9.44 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 an accumulation 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 an accumulation fund in respect of which the Regulator formulates a scheme for the winding‑up of the fund.
9.44 Alternative programs approved by the Regulator for accumulation funds
(1) If, as an alternative to commencing winding‑up proceedings, the fund’s actuary recommends in writing to the trustee of the fund a specified course of action, the trustee, if he or she wishes to accept the recommendations of the fund’s actuary, 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 recommendations of the fund’s actuary and notifies the trustee in writing of the approval, the trustee must follow the specified course of action as recommended.
9.45 Accumulation fund winding‑up proceedings—priorities
(1) If a trustee of an accumulation fund initiates winding‑up proceedings in relation to the fund, 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 is solvent at the winding‑up date, the amount allocated to each individual member of the fund at the winding‑up date must not be less than the minimum guaranteed benefit of the member.
(5) If the fund is technically insolvent at the winding‑up date, an amount equal to the net realisable value of the assets at the winding‑up date must be apportioned among all the members of the fund at that date so that the proportion of that amount that is apportioned to an individual member bears the same relation to the whole amount as the minimum guaranteed benefit of that member bears to the total of minimum guaranteed benefits in respect of all the members of the fund at the winding‑up date.
Part 9AA—Requirements relating to MySuper products
9.46 Notification—accrued default amount attributed to MySuper product
(1) For subsection 29SAA(3) of the Act, the RSE licensee must give the member a notice in writing in accordance with subregulation (3) at least 90 days before the attribution of the accrued default amount or the transfer of the accrued default amount to another fund.
(2) However, this regulation does not apply to the RSE licensee if the attribution or transfer will not result in any of the following:
(a) an increase in a fee or charge that applies to the amount;
(b) a reduction in an insured benefit that is attributable to the member;
(c) an increase in an insurance premium that is attributable to the member;
(d) a change in the investment strategy that relates to the amount.
(3) For subregulation (1), the notice must mention the following:
(a) the amount that is attributable to the member at the time the notice is sent;
(b) the name of the MySuper product to which the amount will be attributed or transferred;
(c) how the member can elect, in writing, to opt out of the attribution or transfer;
(d) how the member may obtain a product disclosure statement for the MySuper product;
(e) any change to a fee or charge that applies to the amount;
(f) any change to the member’s insured benefits as a result of the attribution or transfer;
(g) any change to the investment strategy applicable to the amount as a result of the attribution or transfer;
(h) any other information that the member needs to understand the attribution or transfer.
(4) For paragraph (3)(e), the fee or charge must be stated in dollars.
(5) However, ASIC may determine that the fee or charge be stated another way if, in ASIC’s opinion, there is a compelling reason why it is not possible to state the fee or charge in dollars.
(6) A determination under subregulation (5) must be published in the Gazette.
9.46A Notification—periodic statements
(1) This regulation is made for subsection 29SAA(3) of the Act.
(2) An RSE licensee of a regulated superannuation fund that has made an election in accordance with section 29SAA of the Act must give a member of the fund mentioned in paragraph 29SAA(3)(a) or (b) of the Act a notice in writing.
(3) The notice must mention the following:
(a) the RSE licensee’s obligation to:
(i) move the accrued default amount by 30 June 2017; and
(ii) promote the financial interests of the member in relation to a MySuper product held by the member; and
(b) the accrued default amount; and
(c) either:
(i) if the RSE licensee has identified a MySuper product, either within the fund or in another regulated superannuation fund, to which the RSE licensee proposes to move the accrued default amount—the name of the MySuper product, and when the proposed move will occur; or
(ii) if the RSE licensee has not identified such a MySuper product—why the RSE licensee has not done so, and what the RSE licensee has done, and will do, to do so.
(4) The notice must be given to the member with:
(a) the first periodic statement sent to the member after the RSE licensee has identified the accrued default amount; and
(b) each subsequent periodic statement sent to the member until the accrued default amount is moved to a MySuper product.
9.47 Other factors that may be used for a lifecycle MySuper product
For paragraph 29TC(2)(b) of the Act, the factors are:
(a) the member’s:
(i) account balance; and
(ii) contribution rate; and
(iii) current salary; and
(iv) gender; and
(b) the time remaining, in the opinion of the trustee, before the member could be expected to retire.
9.48 Limitation imposed by governing rules
(1) For paragraph 29TC(3)(a) of the Act, the following limitations on the source or kind of contributions made by or on behalf of a person who holds a MySuper product offered by a regulated superannuation fund are prescribed:
(a) a limitation on a contribution, by way of transfer, from a fund that is, at the time the transfer is made:
(i) a foreign superannuation fund; or
(ii) a fund that is similar to a foreign superannuation fund;
(b) a limitation on the contribution of an asset in a form other than money;
(c) a limitation in relation to a contribution by a non‑associated employer to:
(i) a MySuper product that is authorised because section 29TB of the Act is satisfied; or
(ii) a corporate MySuper product.
(2) In this regulation:
corporate MySuper product has the meaning given by subsection 23A(3) of the Fair Work Act 2009.
foreign superannuation fund has the meaning given by section 995‑1 of the 1997 Tax Act.
non‑associated employer means a person who is not:
(a) an employer of the person who holds the MySuper product; or
(b) an employer associated with the employer of the person who holds the MySuper product.
9.49 Opt‑out insurance for MySuper members cannot be obtained at reasonable cost
For subsection 68AA(7) of the Act, the circumstances are that the trustee certifies, in writing, that the trustee is reasonably satisfied the risk that is to be insured cannot:
(a) be placed with an insurer at a reasonable cost; or
(b) be provided on an opt‑out basis.
9.50 Capped fees and costs
(1) This regulation is made for the purposes of paragraph 99G(3)(c) of the Act.
(2) The amount prescribed as part of the capped fees and costs charged to a member of a regulated superannuation fund in relation to a MySuper product or choice product for a year of income of the fund is so much of the indirect cost of the MySuper product or the choice product for the year that is required to be reported to the member under section 1017D of the Corporations Act 2001 as:
(a) is not charged to the member as a fee; and
(b) is incurred by the trustee or the trustees of the fund in relation to the year; and
(c) relates to the administration of the fund or investment of the assets of the fund.
9.51 Fee cap percentage
For the purposes of subsection 99G(4) of the Act, the fee cap percentage is 3%.
Note: The fee cap percentage prescribed in this regulation would also apply in relation to subsections 99G(2) and (5) of the Act as those subsections are affected by item 20 of Schedule 1 to the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019.
Part 9AB—Annual performance assessments etc.
Division 9AB.1—Preliminary
9AB.1 Definitions
In this Part:
actual return has the meaning given by regulations 9AB.11 and 9AB.12.
adjusted index has the meaning given by subregulation 9AB.5A(7).
administration fee cap, of a Part 6A product in relation to a financial year, means the Part 6A product’s fee cap (for the administration fee type of fee) in relation to the end of the financial year, as reported to APRA in accordance with the applicable fees standard.
administration fee flat amount, of a Part 6A product in relation to a financial year, means the Part 6A product’s dollar amount (for the administration fee type of fee) in relation to the end of the financial year, as reported to APRA in accordance with the applicable fees standard.
administration fee percentage, of a Part 6A product in relation to a financial year, means the Part 6A product’s percentage of member balance (for the administration fee type of fee) in relation to the end of the financial year, as reported to APRA in accordance with the applicable fees standard.
asset allocation standard means:
(a) the Financial Sector (Collection of Data) (reporting standard) determination No. 42 of 2023; or
(b) an analogous legislative instrument (whether or not the legislative instrument is in force).
assumed annual fee has the meaning given by regulation 9AB.17.
assumed index has the meaning given by regulation 9AB.17.
assumed rate of tax has the meaning given by regulation 9AB.17.
benchmark RAFE, for a Part 6A product in relation to a financial year, has the meaning given by regulation 9AB.16.
benchmark return has the meaning given by regulations 9AB.13 and 9AB.14.