(i) the Part 6A product and the quarters are in a class of Part 6A products and quarters specified in a determination under subregulation (9A);
(ii) the Part 6A product and the quarters are specified in a determination under subregulation (10).
(9) Despite subregulation (2), the benchmark return, for the Part 6A product for the lookback period for the product in respect of the year, is the amount calculated using the formula in subregulation (2), as modified in the way specified in the following determination:
(a) if only subparagraph (8)(b)(i) applies—the determination mentioned in that subparagraph;
(aa) if only subparagraph (8)(b)(ii) applies—the determination mentioned in that subparagraph;
(b) if both subparagraphs (8)(b)(i) and (ii) apply—the determination mentioned in subparagraph (8)(b)(i).
(9A) For the purposes of subparagraph (8)(b)(i), APRA may, by legislative instrument, make a determination that:
(a) specifies classes of Part 6A products and quarters; and
(b) specifies modifications of the formula in subregulation (2) that APRA considers are reasonably necessary to reflect the circumstances mentioned in paragraph (8)(a) in respect of the specified classes of Part 6A products and quarters.
(10) For the purposes of subparagraph (8)(b)(ii), APRA may make a determination, in writing, that:
(a) specifies:
(i) a lifecycle Part 6A product; and
(ii) the superannuation entity that offers the Part 6A product; and
(iii) 2 quarters; and
(b) specifies modifications of the formula in subregulation (2) that APRA considers are reasonably necessary to reflect the circumstances mentioned in paragraph (8)(a) in respect of the specified Part 6A product and quarters.
(11) APRA must give a notice of a determination under subregulation (10) to the trustee of the superannuation entity specified in the determination. The notice must:
(a) be in writing; and
(b) include a copy of the determination.
9AB.15 APRA’s determination of sequence of lifestages
(1) For the purposes of paragraph (c) of the definition of j in subregulation 9AB.12(2) or 9AB.14(2), APRA may make a determination, in writing, that specifies:
(a) a Part 6A product; and
(b) the trustee of the superannuation entity that offers the Part 6A product; and
(c) a sequence of lifestages of the Part 6A product that apply to beneficiaries of the same age.
(2) APRA must give a notice of the determination to the trustee of the superannuation entity specified in the determination. The notice must:
(1) Work out the benchmark RAFE for a Part 6A product in relation to a financial year in accordance with the following subregulations.
(2) First:
(a) if the Part 6A product is a MySuper product—identify all Part 6A products that exist at the end of the year that are MySuper products; or
(b) if the Part 6A product is not a MySuper product and is a platform TDP—identify all Part 6A products that exist at the end of the year that are not MySuper products and are platform TDPs; or
(c) if the Part 6A product is not a MySuper product and is not a platform TDP—identify all Part 6A products that exist at the end of the year that are not MySuper products and are not platform TDPs.
(2A) However, do not include a Part 6A product in the identification under subregulation (2) in relation to the year if the Part 6A product’s initial quarter starts on a day during the financial year that is not 1 July.
(3) Next, construct a consecutive sequence of the representative administration fees and expenses for each of the Part 6A products identified under subregulation (2) in relation to the year, where the sequence:
(a) starts with the lowest of those RAFEs; and
(b) proceeds in ascending order of the amount of each of those RAFEs.
(4) Next, work out the result of the following formula:
Start formula P equals 0.5 times open bracket M plus 1 close bracket end formula
where:
M is the number of Part 6A products identified under subregulation (2).
(5) If P is a whole number, the benchmark RAFE for the Part 6A product in relation to the year is the RAFE that occupies the place in the sequence mentioned in subregulation (3) corresponding to P.
Example: If P=5, then the benchmark RAFE is the fifth RAFE in that sequence.
(6) If P is not a whole number, determine the benchmark RAFE mentioned in subregulation (1) by using the following formula:
Start formula RAFE start subscript PR end subscript plus open square bracket open parenthesis RAFE start subscript PR plus 1 end subscript minus RAFE start subscript PR end subscript close parenthesis times 0.5 close square bracket end formula
where:
PR is P rounded down to the nearest whole number.
RAFEPR is the RAFE that occupies the place in the sequence mentioned in subregulation (3) corresponding to PR.
RAFEPR+1 is the RAFE that occupies the place in the sequence mentioned in subregulation (3) corresponding to PR + 1.
9AB.17 Meaning of covered asset class, assumed index, assumed annual fee and assumed rate of tax
(1) Subregulations (2) to (5) define the following:
(a) a covered asset class for a quarter starting on or after 1 July 2014;
(b) the assumed index for a covered asset class for such a quarter;
(c) the assumed annual fee for a covered asset class for such a quarter;
(d) the assumed rate of tax for a covered asset class for such a quarter.
(2) A covered asset class for a quarter mentioned in paragraph (1)(a) is a class of assets identified in an item of the table in subregulation (7) by its description.
(3) For the purposes of this regulation, in determining a covered asset class for a quarter, treat the term Alternatives as having the same meaning as that term has in the asset allocation standard that applies in relation to the quarter.
(4) The assumed index for a quarter mentioned in paragraph (1)(a) for a covered asset class for the quarter is the assumed index identified in the item of the table in subregulation (7) that identifies the covered asset class.
(5) The assumed annual fee for a quarter mentioned in paragraph (1)(a) for a covered asset class for the quarter is the assumed annual fee identified in the item of the table in subregulation (7) that identifies the covered asset class.
(6) The assumed rate of tax for a quarter mentioned in paragraph (1)(a) for a covered asset class for the quarter is the assumed rate of tax identified in the item of the table in subregulation (7) that identifies the covered asset class.
(7) The table is as follows:
Covered asset classes, assumed indices, assumed annual fees and assumed tax rates for quarters starting on or after 1 July 2014
Item Description Assumed index Assumed annual fee Assumed annual rate of tax
1 Australian Equity ASA52S&P/ASX 300 Total Return Index 0.05% 0.00%
2 International Equity (hedged; international economy type not specified or not applicable) DE725341MSCI All Country World Ex‑Australia Equities Index with Special Tax (100% hedged to AUD) 0.11% 14.00%
3 International Equity (hedged; emerging markets) DA725342MSCI Emerging Markets with Special Tax (100% hedged to AUD) 0.16% 14.00%
4 International Equity (hedged; developed markets) DA750700MSCI World ex Australia with Special Tax (100% hedged to AUD) 0.10% 14.00%
5 International Equity (unhedged; international economy type not specified or not applicable) DN714533MSCI All Country World Ex‑Australia Equities Index with Special Tax (unhedged in AUD) 0.09% 14.00%
6 International Equity (unhedged; emerging markets) NA714531MSCI Emerging Markets with Special Tax (unhedged in AUD) 0.14% 14.00%
7 International Equity (unhedged; developed markets) NA714532MSCI World ex Australia with Special Tax (unhedged in AUD) 0.08% 14.00%
8 Australian Listed Property ASA6PROPS&P/ASX 300 A‑REIT Total Return Index 0.12% 14.00%
9 International Listed Property RAHRSAHFTSE EPRA Nareit Developed ex Aus Rental 100% Hedged to AUD Net Tax (Super) Index 0.22% 14.00%
10 Australian Listed Infrastructure FDCICSAHFTSE Developed Core Infrastructure 50/50 100% Hedged to AUD Net Tax (Super) Index 0.26% 14.00%
11 International Listed Infrastructure FDCICSAHFTSE Developed Core Infrastructure 50/50 100% Hedged to AUD Net Tax (Super) Index 0.26% 14.00%
12 Australian Unlisted Property MSCI/Mercer Australia Core Wholesale Monthly Property Fund Index – NAV‑Weighted Post‑Fee Total Return (All Funds) 0% 14.00%
13 International Unlisted Property MSCI Global (Excl. Pan‑Europe and Pan‑Asia Funds) Quarterly Property Fund Index (Unfrozen) (Net Total Return; AUD fixed) 0% 14.00%
14 Australian Unlisted Infrastructure MSCI Australia Quarterly Private Infrastructure Fund Index (Unfrozen) – 50th Percentile Post‑Fee Total Return (All Funds) 0% 14.00%
15 International Unlisted Infrastructure MSCI Australia Quarterly Private Infrastructure Fund Index (Unfrozen) – 50th Percentile Post‑Fee Total Return (All Funds) 0% 14.00%
16 Australian Fixed Income BACM0Bloomberg Ausbond Composite 0+ Yr Index 0.10% 15.00%
17 Australian Fixed Income Excluding Credit BAGV0Bloomberg Ausbond Govt 0+ Yr Index 0.08% 15.00%
18 Australian Credit BACR0Bloomberg Ausbond Credit 0+ Yr Index 0.15% 15.00%
19 International Fixed Income LEGATRAHBloomberg Global Aggregate Index (hedged AUD) 0.10% 15.00%
20 International Fixed Income Excluding Credit BTSYTRAHBloomberg Global Treasury Index (hedged AUD) 0.08% 15.00%
21 International Credit LGCPTRAHBloomberg Global Aggregate Corporate Index (hedged AUD) 0.15% 15.00%
22 Australian Cash BAUBILBloomberg Ausbond Bank Bill Index 0.04% 15.00%
23 International Cash BAUBILBloomberg Ausbond Bank Bill Index 0.04% 15.00%
24 Alternatives 0% 0%
25 Defensive Alternatives 0% 0%
26 Growth Alternatives 0% 0%
9AB.18 APRA’s determination of alternative assumptions—paragraphs 60D(7)(b) and (c) of Act
APRA’s determination of alternative assumptions
(1) For the purposes of paragraph 60D(7)(b) of the Act, APRA may, by legislative instrument, determine a specified alternative assumption in relation to a specified quarter covered by the table in regulation 9AB.17 that replaces one of the following assumptions in relation to that quarter:
(a) an assumed index identified in an item of that table;
(b) an assumed annual fee identified in an item of that table;
(c) an assumed annual rate of tax identified in an item of that table.
(2) To avoid doubt, the determination may:
(a) specify an alternative assumption in relation to more than one specified quarter; or
(b) specify more than one alternative assumptions, each of which replaces one particular assumption mentioned in paragraph (1)(a), (b) or (c), in relation to a specified quarter; or
(c) specify more than one alternative assumption, each of which replaces one particular assumption mentioned in paragraph (1)(a), (b) or (c), in relation to more than one specified quarter.
Specified conditions for APRA’s determination of alternative assumptions
(3) For the purposes of paragraph 60D(7)(c) of the Act, subregulations (4), (5) and (6) specify conditions to be met before APRA can make a determination under subregulation (1).
(4) Before making a determination under subregulation (1), APRA must consult with the Treasurer.
(5) Before making a determination under subregulation (1) specifying an alternative assumption that replaces an assumption mentioned in paragraph (1)(a) (assumed index) in relation to a specified quarter, APRA must be reasonably satisfied that:
(a) the relevant assumed index identified in an item of the table in regulation 9AB.17 does or did not exist in relation that quarter; and
(b) the specified alternative assumption is substantially analogous to the relevant assumed index.
(6) Before making a determination under subregulation (1) specifying an alternative assumption that replaces an assumption mentioned in paragraph (1)(b) or (c) (assumed annual fee or assumed annual rate of tax) in relation to a specified quarter, APRA must be reasonably satisfied that, as a result of material changes in the investment environment, the assumed annual fee or assumed rate of tax identified in an item of the table in regulation 9AB.17 is no longer suitable in relation to that quarter.
9AB.19 Requirements for notification of fail assessment—subsection 60E(6) of Act
(1) For the purposes of subsection 60E(6) of the Act, this regulation specifies:
(a) forms in which a notice mentioned in subsection 60E(2) of the Act must be; and
(b) kinds of information that must be contained in such a notice.
(2) The information set out in Schedule 2A is specified as a kind of information
(3) If the notice includes an electronic communication as mentioned in subparagraph 60E(5)(a)(ii) of the Act:
(a) the text “Important notice about your super product’s performance” is specified as a kind of information; and
(b) inclusion of that text in the subject line for the electronic communication is specified as a form.
9AB.20 Requirements for reopening determination—subsection 60F(4) of Act
(1) For the purposes of subsection 60F(4) of the Act, this regulation specifies a requirement in relation to a Part 6A product and an entity.
Note: Subsections 60F(3) and (4) of the Act provide that if APRA is satisfied that this requirement is met, it may make a determination that has the effect that each trustee of the entity is released from the obligation in subsection 60F(2) of the Act (to ensure that there are no new beneficiaries for the Part 6A product).
(2) The requirement is that the performance measure for the Part 6A product for the most recently ended financial year equals or exceeds ‑0.005.
Division 9AB.3—Comparison rankings
9AB.21 Specified formula as basis for ranking Part 6A products—performance assessment met
(1) This regulation applies in relation to a Part 6A product for which the requirement in subsection 60D(1) of the Act is met in relation to a financial year.
(2) For the purposes of paragraph 60J(3)(a) of the Act:
(a) this paragraph specifies the formula set out in regulation 9AB.23 (net return ranking formula) as a basis for ranking Part 6A products in relation to the financial year; and
(b) this paragraph specifies the formula set out in regulation 9AB.24 (fee ranking formula) as a basis for ranking that Part 6A products in relation to:
(i) a beneficiary who holds the Part 6A product; and
(ii) a year (the relevant year) that is the financial year, or the year that is the period of 12 months ending on 30 September, 31 December or 31 March in the next financial year.
9AB.22 Specified formula as basis for ranking Part 6A products—performance assessment not met
(1) This regulation applies in relation to a Part 6A product for which the requirement in subsection 60D(1) of the Act is not met in relation to a financial year.
(2) For the purposes of paragraph 60J(3)(a) of the Act:
(a) this paragraph specifies the formula set out in regulation 9AB.23 (net return ranking formula) as a basis for ranking Part 6A products in relation to the financial year; and
(b) this paragraph specifies the formula set out in regulation 9AB.24 (fee ranking formula) as a basis for ranking Part 6A products in relation to:
(i) a beneficiary who holds the Part 6A product; and
(ii) a year (the relevant year) that is the financial year, or the year that is the period of 12 months ending on 30 September, 31 December or 31 March in the next financial year.
9AB.23 Net return ranking formula
For the purposes of paragraphs 9AB.21(2)(a) and 9AB.22(2)(a), the formula is:
A formula to calculate the net return ranking
where:
n means the number of whole quarters in the test period, divided by 4.
NR, in relation to a quarter, means the Part 6A product’s net return in relation to the quarter.
t represents a quarter in a consecutive sequence of quarters, where if t=1, the quarter is the first quarter that starts in the test period.
test period mean the period that:
(a) starts at a time that:
(i) is no earlier than 10 years before the start of the financial year; and
(ii) is the start of a quarter in an earlier financial year; and
(b) ends at the end of a quarter in the financial year.
9AB.24 Fee ranking formula
(1) For the purposes of paragraphs 9AB.21(2)(b) and 9AB.22(2)(b), the formula is:
Start formula Applicable investment fee plus Applicable administration fee plus Applicable cost amount end formula
where:
applicable administration fee has the meaning given by subregulation (2).
applicable cost amount means:
(a) where it is possible to identify the Part 6A product’s applicable transaction costs in relation to the relevant year from information available to APRA—means the applicable transaction costs; or
(b) otherwise—means the applicable indirect cost ratio.
applicable indirect cost ratio means the product of the following:
(a) the relevant beneficiary’s account balance in respect of the Part 6A product;
(b) the Part 6A product’s indirect cost ratio in relation to the relevant year.
applicable investment fee has the meaning given by subregulation (3).
applicable transaction costs has the meaning given by subregulation (4).
(2) For the purposes of subregulation (1), work out the applicable administration fee as follows:
(a) first, work out the product of the following:
(i) an account balance in respect of the Part 6A product;
(ii) the Part 6A product’s administration fee percentage in relation to the relevant year;
(b) work out the sum of the following:
(i) the result of paragraph (a);
(ii) the Part 6A product’s administration fee flat amount in relation to the relevant year;
(c) if the Part 6A product does not have an administration fee cap in relation to the relevant year, the applicable administration fee is the result of paragraph (b);