• Unfunded defined benefit funds

    Members may be assessed for superannuation contributions surcharge for the financial years 1997-2005.

    If members are assessed, the unfunded defined benefit fund must keep a surcharge debt account for each member. This account needs to keep a record of the amount of superannuation contributions surcharge assessed for the 1997-2005 financial years, and any voluntary payments made by a member.

    The fund also needs to calculate and add interest to the outstanding balance of these surcharge debt accounts on 30 June each year using the 10-year Treasury bond rate. You can see these rates under 'Other super rates and thresholds' in Key superannuation rates and thresholds.

    Interest ensures that the value of the accumulated surcharge debt is maintained over time.

    If a member makes a payment, the provider must:

    • credit the payment to the surcharge debt account
    • acknowledge receipt of the payment to the member
    • let the member know about the new balance of the surcharge debt account
    • forward the payment to us within one month of receipt.

    For a member of an unfunded defined benefit fund that has been assessed to pay the surcharge, the actual liability is not payable until either:

    • the member receives a lump sum, or begins receiving a pension or annuity
    • the member transfers contributions
    • a payment to a non-member spouse occurs due to marriage breakdown
    • a benefit is paid when a member dies.

    The fund must pay the amount by which their member's surcharge debt account is in debit to us within one month from the day on which the member receives their benefit.

    If a member has taken a lump sum or a pension before we issue a superannuation contributions surcharge assessment, the member will be assessed and will need to pay the surcharge.

    Attention

    Fund members may make voluntary payments to reduce their surcharge debt accounts. However, we recommend that members seek professional financial advice before they make any voluntary payments.

    End of attention
      Last modified: 25 May 2015QC 18957