Explanatory Memorandum
(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable J.B. Hockey, MP)12 - Schedule 9 - Amendment of Superannuation Legislation Relating to Financial Assistance to Funds
| Schedule 9 clarifies the circumstances in which certain superannuation funds, which suffer losses due to fraud or theft, will be eligible to apply for a grant of financial assistance. |
12.1 Schedule 9 will commence on the day the Bill receives Royal Assent.
Amendment of the Financial Institutions Supervisory Levies Collection Act 1998
12.2 This item amends the definition of fund in section 16 of the Financial Institutions Supervisory Levies Collection Act 1998 to remove self managed superannuation funds(as defined in the SIS Act) from the definition.
Amendment of the Superannuation (Financial Assistance Funding) Levy Act 1993 (the Levy Act)
12.3 These items respectively amend the title, section 3, and the definition of fund in section 5 of the Levy Act to remove self managed superannuation funds (as defined in the SIS Act) from the operation of the Levy Act.
Financial assistance provisions - object
12.4 This item amends section 227 of the SIS Act by adding the words by persons directly or indirectly responsible for their administration at the end of the section. The amendment clarifies and limits the object of the financial assistance provisions in Part 23 of the SIS Act.
Definition of Defined Benefit Fund
12.5 This item inserts a definition of defined benefit fund in section 228 of the SIS Act. This definition is required in order to determine a funds eligibility for financial assistance under Part 23 of the Act.
Definition of Defined Benefit Member
12.6 This item inserts a definition of defined benefit member in section 228 of the SIS Act. This definition is consequential to the definition of defined benefit fund (item 6).
Definition of Defined Benefit Pension
12.7 This item inserts a definition of defined benefit pension in section 228 of the SIS Act. This definition is consequential to the definition of defined benefit member (item 7).
12.8 This item inserts a definition of eligible loss in section 228 of the SIS Act. This definition is an important element of the revised financial assistance provisions and clarifies the circumstances in which a fund may be eligible to apply for financial assistance (which vary depending whether or not a fund is a defined benefit fund (item 6)). In order to be eligible for financial assistance, a fund must have suffered loss as a result of fraudulent conduct, or theft, by a person responsible for the administration of the fund. A person responsible for the administration of the fund may include, but is not limited to, the trustee, investment manager or custodian of the fund, or directors, employees or officers of corporate entities that undertake those functions.
12.9 This item repeals the current definition of loss in section 228 of the SIS Act. This definition has been replaced by the definition of eligible loss (item 9).
Repeal and substitution of paragraph 229(1)(a)
12.10 This item repeals and substitutes paragraph 229(1)(a) of the SIS Act to reflect that a fund must suffer an eligible loss (and meet the other requirements of the section) in order to apply to the Minister for a grant of financial assistance.
Ministerial requests for advice
12.11 This item inserts new section 230A in Part 23 of the SIS Act. Section 230A requires the Minister to request the advice of APRA in relation to any application for financial assistance made under Part 23. Subsection 230A(1) states that the Ministers request may specify particular matters on which APRA is to provide advice, and may specify the time within which the advice must be provided. Subsection 230A(2) provides that APRA must comply with the Ministers request, and may address other issues it considers relevant to the determination of the application.
Minister to consider advice provided by APRA
12.12 This item amends subsection 231(1) of the SIS Act to require the Minister to also consider the advice provided by APRA under section 230A (item 12) in deciding whether to grant financial assistance.
12.13 These items respectively amend subsection 231(1) and section 232 of the SIS Act to replace references to loss with references to an eligible loss , reflecting the new definition (item 9).