SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993

PART 14 - OTHER PROVISIONS APPLYING TO SUPERANNUATION ENTITIES  

SECTION 117   CIRCUMSTANCES IN WHICH AMOUNTS MAY BE PAID OUT OF AN EMPLOYER-SPONSORED FUND TO AN EMPLOYER-SPONSOR  

117(1)  
(Repealed by No 15 of 2007)

117(2)   Excluded superannuation funds.  

This section does not apply to an excluded superannuation fund during the period:


(a) beginning on 21 October 1992; and


(b) ending immediately before the day on which subsection (2A) commenced.

117(2A)   Self managed superannuation funds.  

This section does not apply to a self managed superannuation fund if, at all times after the day on which this subsection commenced when the fund was in existence, the fund was a self managed superannuation fund.

117(3)   Basic prohibition.  

Except as provided by this section, a trustee of a standard employer-sponsored fund must not pay an amount, or permit an amount to be paid, out of the fund to a standard employer-sponsor.

117(3A)   [Exceptions]  

Subsection (3) does not apply in circumstances where:


(a) its application would result in the acquisition of property from a person otherwise than on just terms; and


(b) the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution.

117(4)   Exception - management services.  

A reasonable amount may be paid out of any standard employer-sponsored fund to a standard employer-sponsor for services rendered in connection with the management or operation of the fund.

117(5)   Exception - special procedures followed.  

An amount may be paid out of a standard employer-sponsored fund to a standard employer-sponsor if the following requirements are fulfilled:


(a) apart from this section, the governing rules would require or permit the amount to be paid to the employer-sponsor;


(b) whichever of the following subparagraphs is applicable has been complied with:


(i) if the fund has a single corporate trustee:

(A) the directors of the trustee have, by resolution, declared their intention to pay the amount out of the fund to the employer-sponsor; and

(B) when that resolution was passed, the board of the corporate trustee consisted of equal numbers of employer representatives and member representatives;

(ii) if the fund has a group of individual trustees:

(A) the trustees have, by resolution, declared their intention to pay the amount out of the fund to the employer-sponsor; and

(B) when that resolution was passed, the group of trustees consisted of equal numbers of employer representatives and member representatives;

(iii) in any other case - the trustee has declared his or her intention to pay the amount out of the fund to the employer-sponsor;


(c) before the resolution referred to in subparagraph (b)(i) or (ii) was passed or before the declaration referred to in subparagraph (b)(iii) was made:


(i) an actuary had given a written certificate to the trustee, or the trustees, of the fund stating that, if the amount were paid, the fund would remain in a satisfactory financial position; and

(ii) the trustee, or the trustees, were satisfied that the payment of the amount and the making of the changes (if any) to the governing rules were reasonable having regard to the interests of the employer-sponsor and of the beneficiaries in the fund;


(d) a trustee of the fund gave notice in accordance with the governing rules to all members of the fund:


(i) stating the intention to pay the amount to the employer-sponsor; and

(ii) stating that an actuary has given a certificate to the trustee, or the trustees, of the fund as required by subparagraph (c)(i); and

(iii) setting out particulars of any changes to the governing rules that were proposed to be made if the amount were paid to the employer-sponsor;


(e) at the end of 3 months after the notice mentioned in paragraph (d) was given to members, the provisions of whichever of the following subparagraphs is applicable were complied with:


(i) if the fund has a single corporate trustee - the directors of the corporate trustee passed a resolution agreeing to pay the amount out of the fund to the employer-sponsor;

(ii) if the fund has a group of individual trustees - the trustees passed a resolution agreeing to pay the amount out of the fund to the employer-sponsor;

(iii) in any other case - the trustee decided to make the payment;


(f) any other requirements made by the regulations.

117(5A)   [Notice to come to members ' attention]  

The requirement in paragraph (5)(d) is taken not to have been fulfilled unless the notice is given in a way that enables each trustee of the fund to be reasonably satisfied that the notice came to the attention of all the members of the fund other than members who are lost members within the meaning of the regulations.

117(6)   APRA may waive requirements.  

APRA may waive any or all of the requirements specified in subsection (5) in relation to a matter occurring on or after the date of commencement of this section.

117(7)   Civil penalty provision.  

Subsection (3) is a civil penalty provision as defined by section 193 , and Part 21 therefore provides for civil and criminal consequences of contravening, or of being involved in a contravention of, that subsection.

117(8)   This section does not apply to loans to, or investments in, a standard employer-sponsor.  

A reference in this section to the payment of an amount out of a standard employer-sponsored fund to a standard employer-sponsor does not include a reference to the payment of an amount by way of the making of a loan to, or an investment in, the standard employer-sponsor.

117(9)   Additional independent trustee and additional independent director.  

For the purposes of the application of this section to a fund, a group of trustees, or the board of a corporate trustee, is taken to consist of equal numbers of employer representatives and member representatives if:


(a) the group or board includes an additional independent trustee or an additional independent director, as the case may be; and


(b) the additional independent trustee or additional independent director, as the case may be, is appointed at the request of the employer representatives, or the member representatives, who are the members of the group or board; and


(c) provision is made in the governing rules for the appointment of the independent additional trustee or additional independent director, as the case may be; and


(d) the governing rules do not allow the additional independent trustee or additional independent director, as the case may be, to exercise a casting vote in any proceedings of the group or board concerned.

117(10)   Definitions.  

In this section:

"complying superannuation fund"
(Repealed by No 15 of 2007)

standard employer-sponsor
, in relation to a standard employer-sponsored fund, includes:


(a) if a standard employer-sponsor is a body corporate - another body corporate that is related to the employer-sponsor; or


(b) if a standard employer-sponsor is an individual - an associate of the employer-sponsor.

117(11)   [Standard employer-sponsored fund; standard employer-sponsor]  

For the purposes of this section:


(a) a reference to a standard employer-sponsored fund includes a reference to a former standard employer-sponsored fund; and


(b) a reference to a standard employer-sponsor includes a reference to a former standard employer-sponsor.




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