Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1997
THE PARLIAMENT OF THE
COMMONWEALTH OF
AUSTRALIA
SENATE
RETIREMENT
SAVINGS ACCOUNTS BILL 1997
EXPLANATORY
MEMORANDUM
(Circulated by authority of the
Assistant Treasurer, Senator the Hon Rod Kemp)
80793 Cat.
No. 96 7247 8 ISBN 0644 498830
THIS MEMORANDUM TAKES ACCOUNT OF
AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED
RETIREMENT SAVINGS ACCOUNTS BILL 1997
GENERAL
OUTLINE
This Bill, together with the Retirement Savings Accounts
(Consequential Amendments) Bill 1997 and the Retirement Savings Accounts
Supervisory Levy Bill 1996, implements the 1996-97 Budget initiative to
allow banks, building societies, credit unions and life insurance companies to
provide superannuation without a trust structure in the form of retirement
savings accounts (RSAs).
RSAs will be required to be ‘capital
guaranteed’. The accounts, into which a member and/or an employer on the
member’s behalf will be able to make contributions, will also be fully
portable, owned and controlled by the member, and subject to the retirement
income standards applying to other superannuation products, including
preservation and disclosure.
RSAs will be a simple, low cost, low risk
product especially suited to those with small amounts of superannuation, such as
itinerant and casual workers. They will also be suited for those people who
want to amalgamate several small superannuation holdings and those nearing
retirement who wish to minimise the risk on their superannuation savings. The
introduction of RSAs will complement existing arrangements by increasing
competition and choice in the superannuation industry, thereby putting downward
pressure on fees and charges, and encouraging better standards of
service.
Regulation of RSAs will consist of prudential supervision for
institutional soundness of the RSA provider and functional supervision for
compliance with retirement income and other superannuation standards.
Prudential supervision will be carried out under existing regulatory frameworks
by the Reserve Bank of Australia in the case of banks, the Australian Financial
Institutions Commission and State Supervisory Authorities in the case of
building societies and credit unions, and the Insurance and Superannuation
Commission (ISC) in respect of life offices. Functional supervision of RSAs and
RSA providers will be undertaken by the ISC.
This Bill provides for the
functional supervision of RSAs by the ISC and is closely modelled on the
regulatory regime currently in place for superannuation entities under the
Superannuation Industry (Supervision) Act 1993. This will ensure that
the treatment for RSAs is as consistent as possible with that which applies to
existing superannuation products.
This Bill provides for:
• the approval of RSA institutions and the capacity for that approval to be suspended or revoked in certain circumstances;
• the annual reporting of RSA providers to the ISC;
• clear delineation of the basic duties and responsibilities of RSA providers;
• rules relating to the opening of RSAs and disclosure by RSA providers;
• a mechanism to deal with benefits in respect of members that have left employment or who are lost, and unclaimed benefits;
• the collection and use of tax file numbers;
• certain disclosure obligations in respect of auditors of RSA providers; and
• powers for the ISC to enable effective enforcement of the retirement
income and other standards on RSA providers.
It is intended that the date
of effect of the majority of the provisions will be
1 July 1997.
FINANCIAL IMPACT STATEMENT
The financial
impact of this Bill is considered to be negligible.
NOTES ON
CLAUSES
PART 1 - PRELIMINARY
OUTLINE OF THE
PART
1. The object of this Part is to prescribe the scope and timing of
the application of the Act.
DIVISION 1 -
PRELIMINARY
Clause 1 - Short title
2. This clause
provides the mode of citation of the Act.
Clause 2 -
Commencement
3. This clause provides for the Act to commence on a day
to be fixed by Proclamation or, if no Proclamation is made within six months
after the Act receives Royal Assent, the first day after the end of that six
month period. It is intended that the majority of the provisions are to come
into effect on 1 July 1997.
Clause 3 - General administration of the
Act
4. This clause provides for the Insurance and Superannuation
Commissioner (the Commissioner) to have responsibility for the general
administration of the Act, subject to any directions from the Minister as to the
performance or exercise by the Commissioner of his or her functions or
powers.
Clause 4 - Application of Act not to be excluded or
modified
5. This clause provides for the Act to apply to all RSAs
notwithstanding any provisions in the terms and conditions of the RSA to the
contrary.
Clause 5 - Act extends to external
Territories
6. This clause provides that the provisions of this Act
apply to all the external Territories of the Commonwealth of
Australia.
Clause 6 - Crown to be bound
7. This clause
provides for the binding of the Crown in right of the Commonwealth, each of the
States, the Australian Capital Territory, the Northern Territory, and Norfolk
Island. It further provides that the Crown is not liable to be prosecuted for
an offence against or arising out of this Act.
DIVISION 2 - SUMMARY
AND OUTLINE OF THE ACT
Clause 7 - Brief summary of the
Act
8. This clause sets out the purpose of the Act, which is to make
provision for the offering of RSAs and the provision of benefits by RSA
providers. This clause also establishes that the Act will provide for certain
restrictions to be placed on RSAs, and provides for the approval of RSA
institutions, and supervision of RSA business, by the Commissioner.
PART 2 - KEY CONCEPTS AND OTHER DEFINITIONS
OUTLINE OF THE
PART
9. The purpose of this Part is to prescribe, and to provide guidance
on, certain matters that relate to the interpretation of the provisions of the
Act.
DIVISION 1 - KEY CONCEPTS
Clause 8 - Definition of
RSA
10. This clause sets out the requirements for a product to
be an RSA. In essence, an RSA will be a capital guaranteed
superannuation product, offered by an entity that is an RSA institution when the
account is opened or policy issued to an eligible person and which is maintained
for retirement income purposes. An account cannot be opened, or the policy
issued, before 1 July 1997 or a later day as is prescribed.
11. The
requirement for an account or policy to be described as an RSA is necessary to
differentiate between RSA products and non-RSA products for regulatory purposes.
This does not mean that the term RSA must be used in the product title or that
the term can only be used by RSA institutions.
12. It should be noted
that once an account or policy is an RSA within the meaning of this clause, it
will always be an RSA. However, only RSAs operated by an RSA institution are
allowed to continue to accept contributions.
Clause 9 - Meaning of
hold and holder
13. This clause explains what is meant
by the terms hold and holder for RSAs offered by different types
of RSA providers.
14. The differentiation between the two meanings of
hold and holder is necessary in order to be consistent with the
different terminology used when a person owns a policy in a life insurance
company as opposed to holding an account with a bank, building society, credit
union or prescribed financial institution.
Clause 10 - Meaning of
provide and provider
15. This clause explains what is
meant by the terms provide and provider for different types of
RSAs providers.
16. The differentiation between the two meanings of
provide and provider is necessary in order to be consistent with
the different terminology used when a life insurance company issues a policy as
opposed to a bank, building society, credit union or prescribed financial
institution accepting a contribution.
Clause 11 - Who is an RSA
institution?
17. This clause sets out who can be an RSA
institution. The types of institutions that can apply to be an RSA
institution are set out in clause 23, and include banks, building societies,
credit unions, life insurance companies or prescribed financial
institutions.
18. An RSA institution will always be an RSA provider. In
essence, an RSA institution is an RSA provider that has an approval in force
with the Commissioner, and is therefore allowed to continue to accept
contributions into existing RSAs, and offer and accept contributions into new
RSAs. An RSA institution that has had its approval suspended or revoked by the
Commissioner will still be an RSA provider.
Clause 12 - Who is an
RSA provider?
19. This clause sets out who is an RSA
provider. Every bank, building society, credit union, life insurance
company, or prescribed financial institution that offers, or has offered, RSAs
will be an RSA provider and will therefore be required to comply with this Act
and regulations. However, only those RSA providers that have not had their
approval to issue RSAs, or accept contributions into existing RSAs, revoked or
suspended under Part 3 are classified as RSA institutions.
Clause 13 -
Who is an eligible person?
20. This clause explains who is an
eligible person for the purposes of the definition of RSA in clause 8.
To be an RSA, an account or policy must be held by an eligible person when the
account is opened or the policy is issued.
21. The criteria to be an
eligible person may be prescribed in the regulations.
Clause 14 - What
capital guaranteed means
22. This clause explains what is
meant by the term capital guaranteed as used in clause 8. The inclusion
of the requirement for RSAs to be capital guaranteed reflects the intention that
RSAs will be low cost, low risk products that are of most benefit to some
persons with low amounts of superannuation benefits or people with transient
working patterns.
23. The only way that the benefits in an RSA can be
reduced is if fees and charges are imposed on it by the RSA provider. Under the
definition of capital guaranteed in this clause, contributions to an RSA,
and earnings or interest thereon, can be reduced by fees and charges, but not by
negative investment returns. The meaning of the term capital guaranteed
is therefore consistent with how contributions in banks, building societies,
credit unions and prescribed financial institutions, and most capital guaranteed
life insurance products, operate.
24. The two meanings of capital
guaranteed are necessary, since it is the balance of an account held in a
bank, building society, credit union or prescribed financial institution that is
affected by the capital guarantee, while it is the policy value of a policy held
in a life insurance company that is affected by the capital
guarantee.
25. It should be noted that RSAs with amounts below $1,000
will be subject to certain requirements prescribed in the regulations that
restrict the level of fees and charges that can be imposed on the RSA. These
will be similar to the member protection standards prescribed in the
Superannuation Industry (Supervision) Regulations.
Clause 15 - RSA
benefits
26. This clause sets out the purposes for which the RSA
provider must ensure an RSA is maintained. The purposes essentially relate to
the types of benefits to be provided by an RSA. An RSA must be maintained for
one or more ‘primary purposes’, and in addition, may be maintained
for ‘ancillary purposes’.
27. The ‘primary
purposes’ for which an RSA must be maintained are the provision of
benefits for RSA holders on one or more of the following events: retirement,
attainment of the prescribed age, or death (in which case, the benefit is paid
to the legal personal representative and/or the holder’s
dependant(s)).
28. In addition to the ‘primary purposes’, an
RSA may also be maintained to provide benefits for one or more ‘ancillary
purposes’, such as when the RSA holder terminates his or her employment,
or ceases working through ill-health.
29. The basic purpose of this
clause is to ensure that the benefits in an RSA are maintained solely for
genuine retirement income purposes.
DIVISION 2 -
INTERPRETATION
Clause 16 - Definitions
30. This clause
defines the expressions and terms used in the Act.
Clause 17 -
Approvals, determinations etc. by Commissioner
31. This clause
provides that, notwithstanding the absence of any express provision in the Act
for the Commissioner to give an approval, make a determination, or do an act or
thing, the Commissioner is authorised by this clause to so do.
Clause
18 - Associates
32. This clause provides that the question of whether
a person is an associate of another is to be determined using the relevant
provisions of the Corporations Law, subject to certain modifying assumptions.
This is intended to provide guidance when interpreting who is covered by
references in this Act to associates.
Clause 19 - Definitions
of employee and employer
33. This clause provides that,
for the purposes of the Act, the terms employee and employer have
both their ordinary meaning and their expanded meaning as provided for by this
clause. This clause removes doubt as to the employment status of people such as
elected members of local government councils, Territory Assemblies, and State
and Federal Parliaments.
Clause 20 - Definition of
dependant
34. This clause provides that, for the purposes of
the Act, persons such as spouses, children and adopted children are defined as
dependants.
Clause 21 - Persons involved in
contravention
35. This clause provides that, for the purposes of the
Act, a person is involved in a contravention if and only if the person has
engaged in the activities specified in this clause. In essence, a person has
been involved in a contravention if they have, in some way, been knowingly
involved in the contravention itself or the acts that caused the
contravention.
PART 3 - APPROVAL OF RSA INSTITUTIONS
OUTLINE OF THE
PART
36. This Part provides a mechanism for the Commissioner to approve
certain constitutional corporations as RSA institutions for the purposes of the
Act and for the Commissioner to vary, suspend or revoke such an approval. A
bank, building society, credit union, life insurance company or prescribed
financial institution, will be approved as an RSA institution unless, after
consultation with the relevant prudential regulator, the Commissioner is
satisfied that the institution cannot be relied on to conduct RSAs in accordance
with the Act and regulations.
37. The significance of the approval of RSA
institutions is that only RSA institutions will be able to offer RSAs. This
includes both offering new RSAs and accepting additional contributions from
existing RSA holders. This is achieved through the definition in clause 8 of
RSA (one of the elements of this definition includes ‘that it is provided
by an entity that is an RSA institution at the time the account is opened or the
policy is issued’).
38. Furthermore, the definition of who is an
RSA institution in clause 11 provides that a person will be an RSA
institution if there is an approval in force which has not been suspended or
revoked. If the Commissioner is satisfied that there has been a breach of an
approval condition or that the RSA institution can no longer be relied on to
operate RSAs in compliance with this Act and regulations such that the approval
is suspended or revoked, the entity will no longer be an RSA institution and
will not be able to offer RSAs or accept additional contributions to existing
RSAs.
Clause 22 - Object of Part
39. This clause sets out
the object of the Part.
Clause 23 - Application for
approval
40. This clause provides for certain constitutional
corporations (being a bank, building society, credit union, life insurance
company or prescribed financial institution) to apply for approval as an RSA
institution for the purposes of the Act and sets out requirements relating to an
application.
41. The application form may require the application to
contain the tax file number of the applicant.
Clause 24 - Further
information may be requested
42. This clause allows the Commissioner
to request, in writing, further information from an applicant within the time
specified in the request, for the purposes of deciding an application for
approval, and provides that the Commissioner may treat the application as having
been withdrawn (and duly notify the applicant) if the request is not complied
with. This may be necessary where an application which satisfies clause 23 has
been lodged but the Commissioner requires supplementary information or
clarification.
Clause 25 - Period within which application for
approval is to be decided
43. This clause specifies a 60 day time
period for the Commissioner to make a decision in respect of an application for
approval as an RSA institution. The Commissioner may extend this period up to a
further 60 days (by giving written notice to the applicant) if an extension is
required to decide an application. The Commissioner must decide the application
within this extended period.
44. If the Commissioner has not decided an
application within the time period (or extended period), then the application is
to be taken as having been approved.
Clause 26 - Deciding an
application for approval
45. This clause sets out requirements in
relation to the consideration of applications for approval by the Commissioner.
Approval as an RSA institution must be granted unless the Commissioner is
satisfied that the applicant cannot be relied upon to conduct RSAs in accordance
with the Act and regulations.
46. The clause creates a presumption in
favour of the applicant institution as the Commissioner is obliged to approve
the applicant unless he or she forms a positive opinion that the applicant is
unsuitable (for example, that the administration systems and internal controls
of the applicant cannot reasonably be expected to enable compliance with the RSA
operating standards). That is, the onus is on the Commissioner to find the
applicant unsuitable rather than on the applicant to prove its
suitability.
47. The prescribed regulatory agency, if any, must be
consulted before the Commissioner can be satisfied that the applicant cannot be
relied upon to conduct RSAs in accordance with the Act and regulations and
therefore refuse the application. The reasons for the refusal must be set out
in an instrument of refusal.
48. The agencies to be prescribed under this
clause will be the relevant prudential supervisors, and will be consulted to
enable the Commissioner to be appraised of any potential systemic consequences
of refusing an RSA application. It will also clearly signal to the market that
refusal of an application is not indicative of prudential failings, but only of
the institution’s inability to conduct RSAs in accordance with the RSA Act
and regulations.
49. The Commissioner is both the prudential and
functional regulator of life insurance companies and therefore technically
cannot consult with himself. As such, the Commissioner will only be required to
consult before refusing an application for approval where there is a relevant
prescribed regulatory agency, that is, the Reserve Bank of Australia in the case
of banks, and the Australian Financial Institutions Commission and State
Supervisory Authorities in the case of building societies and credit
unions.
50. The approval of an RSA institution is subject to any
conditions specified in the instrument of approval. Such conditions may be of a
general nature and apply to all RSA institutions and/or may be of a specific
nature applying only to a particular RSA institution. The applicant must be
provided with a copy of the instrument of approval or refusal.
Clause
27 - When an approval is in force
51. This clause provides that an
approval may come into force either when it is granted, or at a later time if
such a time is specified in the instrument of approval. The approval remains in
force, subject to any variation, until it is revoked.
Clause 28 -
Application for variation of an approval
52. This clause provides a
mechanism for an RSA institution to apply for a variation of the conditions
applying to its approval. Situations may arise where an RSA institution’s
changed circumstances make a variation to one or more of these conditions
appropriate. The Commissioner does not have to approve an application for a
variation of the approval.
53. There is no set form in which applications
for variation have to be made, however, this clause states the particular
matters such an application must include. This clause provides that the
Commissioner may request, in writing, further information from an applicant for
the purposes of deciding an application for variation of an approval within a
specified time (for example, where the information provided by the applicant is
insufficient or unclear) and may treat the application as withdrawn (and duly
notify the applicant) if such a request is not complied with.
Clause
29 - An application must be decided within a period of time
54. This
clause specifies a time period of 60 days within which the Commissioner must
decide an application for a variation of approval.
55. The Commissioner
may extend this period up to a further 60 days (by giving written notice to the
applicant) if an extension is required to decide an application. The
Commissioner must decide the application within this extended period. If the
Commissioner has not decided an application within the time period (or extended
period), then the application is to be taken as having been
refused.
Clause 30 - Commissioner may vary an approval on his or her
own initiative
56. This clause provides that the Commissioner can
vary the conditions of approval on his or her own initiative. It is necessary
for the Commissioner to be able to vary the conditions to which the approval of
an RSA institution is subject as the Commissioner may decide that it is
desirable to impose a new condition, or remove an existing condition, on the RSA
institution. In the absence of such a power, the Commissioner could only change
the conditions on new approvals, and not on existing approvals.
57. This
provision allows the Commissioner to respond to changed circumstances of an
institution, or where problems have arisen in respect of the ability of an RSA
institution to comply with some or all of the RSA operating
standards.
Clause 31 - Notifying the RSA institution of the outcome of
an application
58. This clause provides that the Commissioner must
notify the RSA institution of any decision to vary, or refusal to vary, an
approval under clause 29 or 30. It also prescribes the requirements for a
notice varying an approval and a notice refusing to vary the approval of an RSA
institution.
Clause 32 - When a variation of approval comes into
force
59. This clause provides that a variation of approval comes
into force at the time specified in the notice varying the approval and remains
in force until the RSA institution’s approval is revoked or a new
variation comes into force.
Clause 33 - Suspension or revocation of
approval
60. This clause provides that the Commissioner may suspend
or revoke an approval of an RSA institution and sets out some of the grounds on
which an approval may be suspended or revoked. It is necessary for the
Commissioner to be able to suspend or revoke the approval of an RSA institution.
For example, an institution may cease to be a bank, building society, credit
union, life insurance company or prescribed financial institution, may
contravene a condition of approval or demonstrate that it cannot be relied upon
to conduct RSAs in compliance with the Act and regulations.
61. The power
of the Commissioner to either suspend or revoke approval would generally only be
used where the Commissioner has significant concerns as to the frequency and
seriousness of a contravention of a condition of approval or as to the
institution’s ability to conduct RSAs in accordance with the Act and
regulations.
62. Suspension is likely to be used in less serious cases as
the Commissioner may later lift a suspension. A suspension would generally be
lifted if the RSA provider has shown that it has rectified the problems which
originally led to the suspension and the Commissioner is satisfied that the
measures put in place will prevent a recurrence of such problems. Where the
approval is revoked, the RSA provider must later reapply to the Commissioner for
approval in order to be reinstated as an RSA institution.
63. The grounds
for suspension or revocation also provide for an RSA institution, which no
longer wishes to be an RSA institution (for commercial reasons, for example), to
request that their approval be revoked. Except where the RSA institution makes
such a request, a decision to suspend or revoke approval must be made in
consultation with the prescribed regulatory agency, if any, and with the consent
of the Minister.
64. The agencies to be prescribed under this clause
will be the relevant prudential supervisors, and will be consulted to ensure
that suspension or revocation does not jeopardise the institutional soundness of
the RSA provider. The Commissioner is both the prudential and functional
regulator of life insurance companies and therefore technically cannot consult
with himself. As such, the Commissioner will only be required to consult before
suspending or revoking the approval of an RSA institution where there is a
relevant prescribed regulatory agency.
Clause 34 - Consequences of
suspension or revocation
65. This clause establishes the consequences
arising from the suspension or revocation of an RSA institution’s
approval. Where an RSA institution’s approval is suspended or revoked, it
will no longer be an RSA institution but will remain an RSA provider (and hence
many of the provisions of the Act and regulations will continue to apply).
66. The RSA provider must, within the prescribed period, notify all
existing RSA holders and employers making contributions to the RSAs that the
institution’s approval as an RSA institution has been suspended or
revoked. This will ensure, for example, that arrangements can be made by these
parties where so desired, to transfer their RSA balances to an RSA provided by
another RSA institution, a superannuation entity, or to provide for future
contributions to be made to another RSA institution or superannuation entity.
67. The RSA provider is precluded from accepting any additional
contributions to existing RSAs, will not be able to admit any new RSA holders
and will not be able to accept inward transfers as it is no longer an RSA
institution. This will apply, if the RSA provider was suspended, until the
suspension is lifted or, in cases of revocation, until the RSA provider is later
re-approved as an RSA institution. A contravention of this requirement, without
reasonable excuse, is an offence.
68. Any RSAs provided before the
suspension or revocation will continue to be RSAs despite the suspension or
revocation.
69. Any acceptance of a contribution after approval has
been suspended or revoked will not cause the transaction to be invalid, however,
the RSA provider must refund the contribution within 28 days or such further
period as the Commissioner allows. A contravention of this requirement, without
reasonable excuse, is an offence.
70. It should be noted, however, that
some amounts given to the RSA provider will not be accepted as a contribution
but instead the RSA provider will be required, under clause 60, to comply with
the requirements of the regulations in relation to how the money is to be held
and dealt with.
71. Where a contribution is refunded under this clause,
then, for the purposes of the Income Tax Assessment Act 1936 and the
Superannuation Guarantee (Administration) Act 1992, the contribution is
taken never to have been made.
Clause 35 - Notification of breach of
conditions
72. This clause places a requirement on RSA institutions
to notify the Commissioner as soon as practicable after becoming aware of a
contravention of a condition of the institution’s approval. Notification
will enable the Commissioner to more closely monitor the RSA institution and/or
assist in rectification of any problems causing the breach.
73. A
contravention of this requirement, without reasonable excuse, is an
offence.
Clause 36 - Interpretation
74. This clause
provides that a reference to approval in a number of clauses includes a
reference to an approval as varied.
PART 4 - OPERATING STANDARDS ETC. AND ANNUAL RETURNS FOR
RSAs
OUTLINE OF THE PART
75. This Part provides for operating
standards to be made, and specific rules to apply, in relation to the operation
of RSAs and to provide for a penalty to be imposed where these are not complied
with. It also requires RSA providers to provide an annual return to the
Commissioner.
76. The matters covered by the operating standards
provisions are those that are necessary to ensure that money in RSAs is kept and
maintained for genuine retirement income purposes. This includes provisions
about preservation, disclosure of information and the maintenance of minimum
benefits.
77. The specific rules regarding the operation of RSAs are
intended to provide requirements as to how RSAs are, or are not, to be used, and
to require a capital guarantee to be in place at all times with the provision
for affected persons to take civil action where this is
contravened.
78. Audited annual returns are required to be given to
confirm compliance by the RSA provider with the Act and regulations, and hence
the RSA provider’s continued capacity and suitability to operate RSAs.
They are also required for the compilation of statistical
information.
Clause 37 - Object of Part
79. This clause
sets out the object of the Part.
Clause 38 - Operating standards for
RSAs
80. This clause specifies the particular matters for which
standards applicable to the operation of RSAs may be prescribed. It should be
noted that operating standards that may be prescribed under this clause are not
limited to these matters.
Clause 39 - Prescribed operating standards
must be complied with
81. This clause provides that an RSA provider
must ensure that the RSA is operated at all times in compliance with the
applicable operating standards. An RSA provider who intentionally or recklessly
fails to ensure that the applicable operating standards are complied with at all
times is guilty of an offence.
82. Where the RSA provider is also an RSA
institution, it should be noted that the severity of a breach of an operating
standard, and whether the RSA institution has put into place procedures to
rectify the breach, will be taken into account by the Commissioner in
determining whether the RSA institution should continue to be an RSA
institution.
83. If an RSA provider is guilty of not complying with an
operating standard, this contravention does not affect the validity of a
transaction. This is necessary as RSA holders could otherwise be unfairly
disadvantaged by the cancellation of such a transaction.
Clause 40 -
Interest off-set arrangements etc. not permitted
84. This clause
provides that an RSA provider must not enter into any interest
off-set or
combination account arrangements where one of the accounts involved is an
RSA.
85. This means, for example, that interest received from an RSA
cannot be used by the holder in reducing outstanding loans or other bank
facilities such as credit cards. Alternatively, interest from another account
cannot be paid into an RSA nor can interest paid on the RSA be paid into another
account (for example, a savings account).
86. A contravention of this
requirement is an offence.
87. However, where an RSA provider does
contravene the requirement not to enter into any interest off-set or account
combination arrangements where one of the accounts involved is an RSA, the
validity of such an arrangement will not be affected to the extent that it
relates to an account other than an RSA. For example, if an arrangement is put
in place to link a savings account with a home loan, and the RSA is
inadvertently included, the legitimate linking of the savings account and home
loan will not be invalid.
Clause 41 - Certain uses of RSAs
prohibited
88. This clause provides that an RSA provider must not
recognise a mortgage, lien or other encumbrance on the RSA or an assignment of
benefits provided under an RSA. A contravention of this requirement is an
offence.
89. The clause also provides that any term of a contract or
agreement that provides for an RSA to be used as security is of no
effect.
90. The purpose of this clause is to help ensure that the
benefits in an RSA are maintained solely for genuine retirement income
purposes.
Clause 42 - RSA provider not to breach capital
guarantee
91. This clause places a requirement on an RSA provider not
to breach the capital guarantee required for an RSA.
92. This will mean
that, where the RSA is an account, the RSA provider must not reduce the balance
of the RSA by crediting any negative interest.
93. Where the RSA is a
policy, the RSA provider must not reduce the contributions or accumulated
earnings by negative investment returns or by any reduction in the value of the
assets in which the policy is invested.
Clause 43 - Civil liability
where section 42 contravened
94. This clause provides that, where an
RSA provider contravenes clause 42 (by failing to provide a capital guarantee) a
person who has suffered loss or damage as a result can bring an action to
recover the amount of that loss or damage against the person responsible
(primary defendant) or against any other person involved in the
contravention.
95. The action, must be begun within 6 years after the day
on which the cause of the action arose, and may be begun even if the defendant
has been convicted of an offence in respect of the conduct constituting
the contravention.
96. Any liability the defendant or any other person
may have under any other provision of this Act or other law is not affected by
this clause.
Clause 44 - RSA provider to lodge annual
returns
97. This clause provides that the RSA provider, in respect of
each year of income, and within the prescribed period (this period will be
prescribed in the regulations), must provide to the Commissioner, in the
approved form, a return, a certificate, and a certified copy of the report given
to the RSA provider by an approved auditor. An intentional or reckless
contravention of these requirements is an offence.
98. This return may be
provided in electronic form which includes lodgment by electronic transmission.
If the return is provided other than in electronic form, the certificate and the
certified copy of the approved auditor’s report may be endorsed on the
return.
99. The intent of this clause is to require the RSA provider to
confirm compliance with this Act and regulations at all times. This is in
accordance with the self assessment approach to the supervision of RSA providers
used under the RSA legislation. It also requires the RSA provider to engage an
approved auditor to provide an opinion as to the provider’s compliance.
This is necessary to ensure RSAs are being properly maintained in accordance
with the retirement income standards, and that only those RSA providers which
comply with the RSA legislation are permitted to accept contributions into
RSAs.
100. The provision of annual returns also allows the Commissioner
to compile statistical information on RSAs.
PART 5 - DUTIES ETC. OF RSA PROVIDERS
OUTLINE OF THE
PART
101. This Part places a number of special duties on RSA providers.
Whilst from a practical perspective an RSA provider would generally have
procedures in place with regard to many of these duties as part of their
ordinary business operations, such duties are of special significance to the RSA
provider’s compliance with the retirement income standards. Accordingly,
it is necessary to incorporate these duties into the legislation and to impose
penalties for non-compliance.
102. The other main function of this Part
is to establish provisions relating to the disclosure of information to relevant
parties prior to opening an RSA. These provisions aim to ensure that parties
contemplating opening an RSA (including both persons who would be RSA holders
and employers who may open an RSA on behalf of their employees) receive
adequate, appropriate and timely information in order to make an informed
decision.
103. The Part provides the Commissioner with the power to issue
a stop order (preventing an RSA institution from opening new RSAs) where a
regulated document is issued which contains a false or misleading material
statement, as a means of ensuring persons do not make a decision to open an RSA
based on false or misleading information. It also imposes a requirement (in
specified circumstances) for the RSA provider to comply with the requirements of
the regulations in relation to how certain money is to be held and dealt
with.
104. Finally, the Part provides for a cooling-off period to apply
to RSAs which are opened by employers on behalf of employees, in recognition
that there should be a period in which an employee can notify the RSA provider
to close the account and transfer the balance to an RSA provided by another RSA
institution or superannuation entity of his or her choice.
DIVISION 1
- PRELIMINARY
Clause 45 - Object of Part
105. This
clause sets out the object of the Part.
Clause 46 - Contravention of
Part does not affect validity of a transaction or any other
act
106. This clause provides that the validity of a transaction or
any other act will not be affected by a contravention of any provision in this
Part.
DIVISION 2 - DUTIES OF RSA PROVIDERS
Clause 47 -
Duty to establish arrangements for dealing with inquiries or
complaints
107. This clause provides that RSA providers must have in
force at all times arrangements for RSA holders and former RSA holders (or the
executor or administrator of their estate) to make inquiries into and complaints
about the operation or management of the RSA in relation to that person, and for
those inquiries and complaints to be properly considered and dealt with by the
RSA provider within a period of 90 days after they were made. An intentional or
reckless contravention of this provision is an offence.
108. Such
inquiries and complaints may be made by certain persons about a decision of the
RSA provider in relation to the payment of a death
benefit.
109. Effective internal inquiries and complaints mechanisms will
enable RSA holders and former RSA holders to obtain relatively prompt responses
to their inquiries and complaints. This clause interacts with consequential
amendments to the Superannuation (Resolution of Complaints) Act 1993,
which provide that a complaint can only be considered by the Superannuation
Complaints Tribunal if it has first been dealt with under the internal
complaints mechanism of the RSA provider.
Clause 48 - Duty to keep
minutes and records
110. This clause provides for the RSA provider to
keep, and retain for at least ten years, minutes of all matters that relate to
decisions of the RSA provider, made in relation to the operation of the Act and
regulations, that are discussed at meetings of the RSA provider. An intentional
or reckless contravention of this provision is an offence.
111. Such
minutes may be inspected by an RSA standards officer and will assist in the
investigation of breaches of the operating standards.
Clause 49 - Duty
to keep reports
112. This clause provides for the RSA provider to
keep and retain for so long as is relevant, and in any event for at least ten
years, copies of proforma reports given to all RSA holders pursuant to this Act
or under terms and conditions of the RSA, and for those copies to be made
available for inspection on request by a member of the staff of the
Commissioner.
113. This will assist in monitoring compliance of the RSA
provider with the disclosure standards prescribed by the
regulations.
114. An intentional or reckless contravention of this
provision is an offence.
Clause 50 - Duty to transfer balance of
RSA
115. This clause provides that the RSA provider has a duty to
transfer an RSA holder’s balance in the RSA to another RSA provided by an
RSA institution, to a superannuation entity or a regulated exempt public sector
superannuation scheme, or a deferred annuity on the request of the RSA
holder.
116. When an RSA holder requests the RSA provider to transfer the
balance of his or her RSA:
• if the contract or agreement for the provision of the RSA specifies a notice period, the RSA provider must transfer the balance within that period; or
• if there is no notice period specified in the contract or agreement,
the RSA provider must transfer the balance as soon as practicable.
117. In any case, the balance must be transferred within 12 months after
receipt of the written request.
118. This will ensure that, if the terms
and conditions of the RSA provide for exit from the RSA over a longer period
(for example, because the RSA is based on a fixed term deposit arrangement or
there are longer term investments backing the RSA), the RSA provider has a
reasonable timeframe in which to finalise the transfer. That is, the ability of
an RSA provider to specify a notice period (within 12 months) will minimise
liquidity risks and ensure orderly administrative arrangements for RSA
providers.
119. The amount of the RSA to be transferred is to be worked
out in accordance with the regulations.
120. In keeping with the intent
that RSAs be fully portable and controlled by the RSA holder, this clause will
ensure that the RSA holder has the flexibility and choice to be able (where he
or she wishes to do so) to transfer amounts.
121. An intentional or
reckless contravention of this provision is an offence.
DIVISION 3 -
OFFERING RSAs
Clause 51 - Application forms
122. This
clause provides that an RSA institution must not, intentionally or recklessly,
allow a person to become an RSA holder unless that person, or the employer of
that person, has made an eligible application or has applied in prescribed
circumstances. Failure to comply with this provision is an
offence.
123. The clause outlines various aspects in relation to the
provision of the application by the RSA institution. The clause also allows the
Commissioner to make a written determination (which is a disallowable
instrument) specifying requirements as to form and any additional information or
documents to be received by the person who will be the holder or by the
employer, as the case may be.
124. Where an application is made by an
employer who is applying to open an RSA on behalf of an employee, the clause
provides that any additional information and documents required to be provided
to the employer under the determination will only be required to be provided
with the form if it is the first time that the employer has made an application
on behalf of any employee.
125. The effect of this is that an application
made by an employer on behalf of an employee will only need to be accompanied by
information (if any) required by a determination where it is the first
application to the RSA institution made by that employer. However, an
application must still be made where the employer wishes to open an RSA on
behalf of subsequent employees.
126. This clause permits an RSA
institution to accept one application to open an RSA for more than one employee
(that is, one application for more than one account). The application form
must, however, contain enough information to enable the RSA institution to meet
the requirements of clause 54.
DIVISION 4 - PROVISIONS RELATING
TO INFORMATION GIVEN TO PROSPECTIVE RSA HOLDERS
Clause 52 -
Information to be given to a person before becoming an RSA
holder
127. This clause provides that an RSA institution must, before
allowing a person to become a holder of an RSA, be satisfied that the person has
received documents issued by the RSA institution containing all the information
specified in the regulations. These documents must also comply with any
relevant requirements specified in the regulations. Intentional or reckless
failure to comply with this provision is an offence.
128. The RSA
institution is only required to be satisfied that the person received
information that was current at the time the application was received by the RSA
institution.
129. The general effect of this clause is that an RSA
institution need only provide information to a prospective RSA holder if he or
she is the person applying to open the RSA. That is, under this clause, the RSA
institution will not have to provide such information to a prospective RSA
holder before the account is opened or the policy issued if the employer is
applying to open the RSA on the employee’s behalf or the RSA is provided
in circumstances specified in the regulations.
Clause 53 - Information
to be given to employers who apply for RSAs on behalf on
employees
130. This clause provides that an RSA institution must
ensure that an employer who is applying on behalf on an employee to open an RSA
has received documents issued by the RSA institution containing all the
information specified in regulations. These documents must also comply with any
relevant requirements of the regulations.
131. The RSA institution is
only required to be satisfied that the person received information that was
current at the time the application was received by the RSA
institution.
132. This clause also restricts the provision of such
information by the RSA institution to the first occasion on which the employer
makes an application to that RSA institution. That is, it is not necessary to
provide such information to the employer on each occasion the employer opens an
RSA on an employee’s behalf or makes a contribution to the
RSA.
133. This clause will not apply where the person makes an
application in circumstances specified in the regulations.
134. An
intentional or reckless contravention of this provision is an
offence.
Clause 54 - Documents to be given to
employees
135. This clause provides that the RSA institution must
provide prescribed information to an RSA holder (who has become an RSA holder as
a result of his or her employer making an application to open the RSA on his or
her behalf) as soon as practicable after providing the RSA. This would
generally involve the mailing of disclosure documentation by the RSA institution
to the employee direct.
136. This is to ensure that (because only the
employer will have received information prior to the RSA being provided) the
person becoming the RSA holder receives information regarding the RSA (in order
to make a decision as to whether to remain a holder, for
example).
137. An intentional or reckless contravention of this provision
is an offence.
Clause 55 - Regulations require the giving of
information
138. This clause defines the scope of regulations that
may be made in respect of information to be given before a person becomes an RSA
holder or an employer makes an application on behalf on an employee to provide
an RSA for the employee.
DIVISION 5 - STOP ORDERS
Clause
56 - Order to stop contracts etc. for provision of new RSAs
139. This
clause provides that in circumstances where an RSA provider issues a regulated
document containing information which appears to the Commissioner to be false or
misleading, the Commissioner may direct that no further contracts or agreements
be entered into by that RSA provider for the provision of RSAs.
Clause
57 - When a stop order is in force
140. This clause specifies the
period for which a stop order is to be effective.
Clause 58 -
Revocation of stop order
141. This clause gives the Commissioner the
power to revoke a stop order. This would generally occur if the Commissioner is
later satisfied that the problem giving rise to the making of the stop order
originally has been rectified (that is, the false or misleading information has
been removed from the regulated document).
Clause 59 - Effect of stop
order
142. This clause provides that where a stop order is in force
an RSA provider must not, intentionally or recklessly, enter into a contract or
agreement for the provision of an RSA.
143. This will ensure that
prospective RSA holders or employers who may be opening an RSA on behalf of an
employee do not make a decision as to whether to open an RSA based on a
statement which is false or misleading. Failure to comply with this provision
is an offence.
DIVISION 6 - HOW CERTAIN MONEY TO BE
HELD
Clause 60 - RSA provider to comply with requirements of the
regulations in relation to certain money
144. This clause applies
where an RSA provider receives money in respect of an application but is not in
a position to immediately open the RSA to which the application relates. This
may occur, for instance, where the RSA provider has received the money but the
application is yet to be provided. It also applies if an RSA provider receives
an amount of money from an employer (being the employer of an RSA holder) which
is intended as a contribution, but which, if accepted as a contribution, would
result in the RSA provider contravening clauses 34 or 181.
145. The RSA
provider must comply with the requirements of the regulations in relation to how
this money is to be held and dealt with. The regulations may require moneys
intended as contributions under clauses 34 or 181, but which are unable to be
accepted because of those provisions, to be paid to an eligible rollover fund so
that an employer will not incur a liability under the Superannuation Guarantee
Charge arrangements for failure to make those
contributions.
146. Intentional or reckless contravention of these
provisions is an offence.
DIVISION 7 - COOLING-OFF
PERIOD
Clause 61 - Cooling-off period where employer applies for
RSA
147. This clause provides that where an RSA is opened or issued
as a result of an employer making an application on an employee’s behalf,
the employee can notify the RSA provider requesting that the RSA be closed and
the balance transferred to another RSA that is provided by an RSA institution,
or a superannuation entity, without penalty. This may be done at any time
before the end of 14 days after the employee receives the documents provided
under clause 54.
148. The RSA provider must comply with the request as
soon as practicable after received (and in any case within 28 days).
Intentional or reckless contravention of this provision is an
offence.
149. The clause provides that all amounts contributed to the RSA
must be transferred. Such amounts may only be reduced by taxation (already
paid, or liable to be paid, by the RSA provider) and no fees can be
deducted.
150. This clause gives an employee who had an RSA opened or
issued on his or her behalf the freedom to transfer amounts to another RSA
provided by an RSA institution, or superannuation entity, of the
employee’s choice within the 14 day period should he or she wish to do
so.
PART 6 - RECORDS, AUDITS AND AUDITORS
OUTLINE OF THE
PART
151. This Part sets out the rules under which an RSA provider must
keep their records with regard to RSA transactions and outlines provisions
relating to auditors and their duties, including in respect of the compliance of
RSA providers with the RSA legislation.
152. Imposing requirements on RSA
providers concerning records about transactions relating to the RSAs they
administer, is intended to ensure these records can be conveniently and properly
audited in accordance with the RSA legislation.
153. The provisions of
this Part also recognise that it is common for auditors to become aware of
contraventions of the RSA operating standards which may affect RSA holders
before these problems come to the attention of the Commissioner. In addition,
auditors may also detect minor causes of concern before they become significant
operational concerns.
154. The powers and responsibilities given to
auditors to form an opinion about an RSA provider’s compliance with the
Act and regulations play an important role in ensuring the benefits of RSA
holders are maintained for genuine retirement income purposes, and also
facilitates the RSA provider’s compliance with the RSA legislation. These
objectives are further enhanced by the Commissioner’s powers to disqualify
auditors and/or refer matters to an auditor’s professional association for
appropriate disciplinary action. This helps to ensure that only fit and proper
persons are in a position to act as auditors of RSA providers.
Clause
62 - Object of Part
155. This clause sets out the object of the
Part.
Clause 63 - Records
156. This clause sets out
requirements relating to the manner of keeping of records by the RSA provider in
relation to RSA transactions. An intentional or reckless contravention of these
requirements is an offence.
157. These requirements not only assist in
the maintenance of information that will enable an approved auditor to form an
opinion about an RSA provider’s compliance with the Act and regulations,
but will also facilitate the RSA provider’s preparation of the annual
return that is to be given to the Commissioner under clause 44.
Clause
64 - Audit of records
158. This clause provides that an RSA provider
must make necessary arrangements to enable an approved auditor to give the RSA
provider within the prescribed time a report in the approved form as to the
degree of its compliance with certain provisions of this Act and regulations as
identified in the form. This form must also include an opinion by the auditor
as to whether the RSA provider has complied with certain provisions of the RSA
Act and regulations as identified in the form during that year of
income.
159. This approach is consistent with the self assessment
approach to the supervision of RSA providers in respect of RSA business that is
used under this legislation, and also with the regime used for the supervision
of superannuation entities. An RSA provider who intentionally or recklessly
fails to make the necessary arrangements is guilty of an offence.
160. An
auditor who intentionally or recklessly fails to provide the report by the
prescribed time is guilty of an offence. This time period will be prescribed in
the regulations.
161. It should be noted that these requirements only
relate to compliance with the RSA legislation, and not to the audits of an RSA
provider’s financial position. The requirements for such audits are
prescribed in the relevant legislation that governs each different type of RSA
provider, whether it is a bank, building society, credit union, life insurance
company or prescribed financial institution.
Clause 65 - Obligations
of auditors - compliance
162. This clause provides for the RSA
provider and in certain circumstances, the Commissioner, to be notified by the
approved auditor of an RSA provider that, in the auditor’s opinion, a
contravention of this Act or the regulations may have occurred, may be
occurring, or may occur. Any intentional or reckless failure to inform either
the RSA provider, or the Commissioner as the case may be, is an
offence.
163. The requirement for the auditor to inform the RSA provider,
and not necessarily the Commissioner, about their concerns in regard to
compliance with the RSA legislation recognises that, in practice, it is expected
that where an auditor has a continuing association with the RSA provider, they
will inform the provider of such concerns first. It also allows time for the
provider to rectify any breach before the breach is reported to the
Commissioner.
164. There is no obligation on an auditor to make a report
to the RSA provider if the auditor believes that their opinion is not relevant
to the performance of their audit functions under the RSA legislation. This
caveat is intended to safeguard auditors who may notice something in relation to
an RSA whilst carrying out audit work for the provider that is totally unrelated
to their audit functions in relation to RSA business, for example, obligations
under the Banking Act 1959.
165. The auditor must tell the RSA
provider of a breach, or likely breach, of this Act or the regulations in
writing, unless:
• the auditor has been told by another auditor that
the other auditor has already informed the RSA provider or the Commissioner
about the breach or likely breach in writing; and
• they have no reason
not to believe that person on this matter.
166. If the other auditor
intentionally states that they have informed the RSA provider or Commissioner of
the breach, or possibility of a breach, and they have not done so, they are
guilty of an offence.
167. An auditor may inform the Commissioner about
such matters, and by doing so they receive an immunity from civil actions by RSA
providers for such matters as a breach of confidence.
168. If an
auditor informs the RSA provider about the breach or possible breach, and does
not inform the Commissioner, then the auditor is required to request a report
from the RSA provider on their proposals to deal with the issue. If the RSA
provider does not comply with the request, or the action or proposed action to
be taken to deal with this matter is not to the auditor’s satisfaction,
the auditor must then inform the Commissioner in writing.
Clause 66 -
Auditors - disqualification orders
169. This clause provides the
Commissioner with the power to disqualify a person from being an approved
auditor for the purposes of the Act where the auditor has failed to discharge
his or her statutory duties or is otherwise not fit and proper to act as an
approved auditor. The intent of this clause is to ensure that only competent
auditors who are fit and proper persons are in a position to give an opinion on
an RSA provider’s compliance with the RSA legislation.
170. A
disqualification order made by the Commissioner under this clause takes effect
on the date specified, which must be within 28 days of the making of the order.
The affected person must be given a copy of the order and particulars of the
order must be published in the Gazette.
171. If a decision of this
kind is made, it is subject to appeal to the Administrative Appeals
Tribunal.
172. The Commissioner has the power to revoke a
disqualification order, either on his or her own initiative or upon written
application by the disqualified auditor. The Commissioner must not revoke a
disqualification order unless satisfied that the auditor is a fit and proper
person and is likely to carry out, and perform adequately and properly, the
duties of an auditor under the RSA legislation.
173. The revocation of a
disqualification order has effect from the day on which it is made, and must be
published in the Gazette. However, where the Commissioner refuses an
application for revocation of a disqualification order, a notice of the
decision, which sets out reasons for the decision, must be given to the affected
person.
Clause 67 - Commissioner may refer matters to a professional
association
174. This clause allows the Commissioner to refer a
matter to an auditor’s professional association for appropriate
disciplinary action where the Commissioner is of the view that the performance
of that auditor has been found to be unsatisfactory. This power can be used
alternatively or in addition to any action taken by the Commissioner to
disqualify the auditor.
175. If the Commissioner does refer a matter to
the auditor’s professional association, then the Commissioner must inform
the auditor that this step has been taken, as soon as practicable and in any
case no later than 7 days after the referral has occurred. Where the matter is
referred to the auditor’s professional association, the Commissioner is to
inform the person to whom details are made available of that person’s
obligations to maintain the confidentiality of the information under
subclause 190(12).
PART 7 - PROHIBITED CONDUCT IN RELATION TO RSAs
OUTLINE OF THE
PART
176. This Part provides that false and misleading conduct in
relation to RSAs is prohibited.
177. In doing so, this Part designates a
number of acts which may be undertaken in relation to RSAs as regulated acts,
and provides, in particular circumstances, for criminal or civil liability in
connection with these acts or the issue of regulated documents.
Clause
68 - Object of Part
178. This clause sets out the object of the
Part.
Clause 69 - Regulated acts
179. This clause sets out
the acts, being regulated acts performed in connection with RSAs, to which
clauses 70 and 71 are to apply.
Clause 70 - Fraudulently inducing a
person to engage in regulated act - criminal liability
180. This
clause provides that a person must not engage in specified false or misleading
conduct with the intention of inducing another person to engage in a regulated
act.
181. Failure to comply with this provision is an
offence.
Clause 71 - Misleading conduct in connection with a regulated
act - civil liability
182. This clause provides that civil liability
may attach to conduct by a person, in connection with the performance of a
regulated act, which is misleading, or likely to mislead.
183. A
contravention of this provision is not an offence, but may give rise to civil
liability under clause 73.
Clause 72 - Misleading conduct by RSA
providers - civil liability
184. This clause provides that civil
liability may attach to misleading conduct, or conduct which is likely to
mislead, by the RSA provider in respect of certain dealings. Dealings covered
by the clause are those with an RSA holder or an employer making an application
on behalf of an employee (including an associate of such an employer), in his or
her capacity as an RSA holder or employer, as the case may be.
185. A
contravention of this provision is not an offence, but may give rise to civil
liability under clause 73.
Clause 73 - Civil liability where section
71 or 72 contravened
186. This clause provides that where a person
has suffered loss or damage as a result of conduct which may give rise to civil
liability under clauses 71 or 72, he or she can bring an action to recover the
amount of that loss or damage against the person responsible for the conduct, or
any other person involved in the contravention.
187. An action cannot be
brought under this clause where the person suffering the loss could bring an
action to recover the amount of loss or damage under clause 75.
188. The
action must be begun within 6 years after the day on which the cause of the
action arose, and may be begun even if the defendant has been convicted of an
offence in respect of the conduct constituting the
contravention.
Clause 74 - Regulated documents not to be false or
misleading - criminal liability
189. This clause provides that an RSA
provider must not recklessly or intentionally issue, or authorise the issue of,
a regulated document which the RSA provider knows to contain a material
statement that is false or misleading.
190. Failure to comply with this
provision is an offence.
Clause 75 - Regulated documents not to be
false or misleading - civil liability
191. This clause provides that
an RSA provider must not issue, or authorise the issue of, a regulated document
which contains a material statement that is false or misleading. If an RSA
provider contravenes this provision and a person suffers loss or damage as a
consequence, the person may recover the amount of such loss or damage by civil
action against the RSA provider. It is a defence to such an action if the RSA
provider can prove the person knew the statement was false or misleading before
suffering the loss or damage.
Clause 76 -Statements by
experts
192. This clause provides that an RSA provider must not
intentionally or recklessly issue a regulated document which includes a
statement made by, or based on a statement of, an expert, unless the written
consent of the expert to the inclusion of that statement in the document has
been obtained. The consent must not have been withdrawn prior to the issue of
the document. Failure to comply with this provision is an
offence.
193. The consent, or a copy of the consent must be kept by the
RSA provider for a prescribed period. Failure to comply with this provision is
an offence.
Clause 77 - Contravention of Part does not affect validity
of a transaction etc.
194. This clause provides that the validity of
a transaction or any other act is not affected by a contravention of this
Part.
PART 8 - PAYMENT OF UNCLAIMED RSA MONEY TO THE COMMISSIONER OF
TAXATION
OUTLINE OF THE PART
195. This Part provides for the
payment of, and provision of details about, unclaimed RSA money to the relevant
authority, whether this be the Commissioner of Taxation, a State or Territory,
or an authority of a State or Territory. It also provides a mechanism for an
RSA provider to pay out unclaimed RSA money.
196. The purpose of these
unclaimed RSA money provisions is twofold. First, to remove from the
superannuation system moneys that would otherwise be given undue concessional
taxation treatment if allowed to remain in the RSA past the age that RSA holders
would normally be required to take this money.
197. Secondly, it provides
for the establishment of a register so that persons who suspect they have or
have had money in an RSA generally need only consult the Commissioner of
Taxation and the unclaimed RSA money authority in the State or Territory in
which the RSA was sold.
198. Where unclaimed RSA money has been paid to a
State or Territory, or an authority of a State or Territory, in accordance with
the law of that State or Territory, then this money, and details of it, do not
have to be given to the Commissioner of Taxation.
199. It should be noted
that the Retirement Savings Accounts (Consequential Amendments) Bill 1997 will
amend the unclaimed money provisions in the Life Insurance Act 1995 and
the Banking Act 1959. This will exempt money held in RSAs offered by
life insurance companies and banks respectively from the unclaimed money
provisions in those Acts as those provisions are inconsistent with the unclaimed
money provisions which apply to superannuation products. Instead, unclaimed
moneys in RSAs offered by banks and life insurance companies must be treated in
accordance with this Part.
Clause 78 - Object of
Part
200. This clause sets out the object of the
Part.
Clause 79 - Meaning of unclaimed
money
201. This clause explains what is meant by the term
unclaimed money.
202. Unclaimed money is money payable (other than
a pension or annuity) which cannot be paid to an RSA holder (or their
beneficiary, if the RSA holder is deceased) upon the holder reaching eligibility
age for the age pension because the RSA provider, after making reasonable
efforts, cannot find the holder. For the purposes of the RSA legislation, it is
expected that the eligibility age for the age pension will be 60 years for women
and 65 years for men.
203. An RSA provider who intentionally or
recklessly breaches this clause is guilty of an offence.
Clause 80 -
Statement of unclaimed money
204. This clause provides for RSA
providers to give a statement of unclaimed RSA money to the Commissioner of
Taxation. An RSA provider who intentionally or recklessly breaches this clause
is guilty of an offence.
205. RSA providers must give to the Commissioner
of Taxation a statement of unclaimed RSA money (to be set out in an approved
form), within four months after the end of each half-year beginning on or after
1 July 1997. Therefore, the first period in which RSA providers will
be required to report any lost RSA holders (and potentially pay the unclaimed
RSA money of such holders to the Commissioner of Taxation) will be the four
month period after 1 January 1998 (that is, before
30 April 1998).
206. In the circumstance in which an RSA
provider pays out any unclaimed RSA money to an RSA holder in the four month
period between the end of a half-year and the date on which the statement of
unclaimed RSA money is required to be given to the Commissioner of Taxation,
then the RSA provider must give to the Commissioner of Taxation within the four
month period, on the statement of unclaimed RSA money, information about the
unclaimed RSA money already paid.
207. The approved form of statement to
be given to the Commissioner of Taxation may require the tax file number of any
RSA holder and the RSA provider to be provided to the Commissioner of Taxation.
The object of this is to facilitate the tracking and identification of unclaimed
RSA money. Any requirements to disclose tax file numbers will be outlined on
the relevant approved form of statement. It should be noted that tax file
numbers that have been provided to the RSA provider by RSA holders for other
purposes can also be used for unclaimed RSA money purposes.
208. The
approved form of the statement of unclaimed RSA money may also have to be given
on a specified kind of data processing device in accordance with specified
software requirements.
209. The Commissioner of Taxation may, in
writing, extend the date by which an RSA provider is required to lodge a
statement of unclaimed RSA money. This extension may be given before, or after,
the end of the four month period after the end of the relevant half-year.
Clause 81 - Payment of unclaimed money to Commissioner of
Taxation
210. This clause provides for how unclaimed RSA money is to
be paid to the Commissioner of Taxation by RSA providers. An RSA provider who
intentionally or recklessly breaches this clause is guilty of an
offence.
211. The payment of unclaimed RSA money must accompany the
giving of the statement of unclaimed RSA money to the Commissioner of Taxation.
The amount of the unclaimed RSA money that has to be paid is: the amount of
unclaimed RSA money held by the RSA provider at the end of a half-year less any
unclaimed RSA money that has been paid to RSA holders (or their beneficiaries)
between the end of the half-year and the date on which the statement of
unclaimed RSA money is required to be given to the Commissioner of Taxation.
212. If unclaimed RSA money in respect of an RSA holder has been paid to
the Commissioner of Taxation, and the RSA holder (or, if the RSA holder is
deceased, their beneficiary), on application, satisfies the Commissioner of
Taxation that they are entitled to the money, then the Commissioner of Taxation
must pay the unclaimed RSA money to the RSA holder (or their beneficiary, if
appropriate).
213. If an RSA provider pays an amount of unclaimed RSA
money to the Commissioner of Taxation, and then subsequently satisfies the
Commissioner of Taxation that the amount paid was excessive, the Commissioner of
Taxation must refund the excess amount to the RSA provider. Once an RSA
provider pays an amount of unclaimed RSA money to the Commissioner of Taxation,
they are discharged of the responsibility and liability associated with that
money.
214. All unclaimed RSA monies paid to the Commissioner of Taxation
will be paid into the Consolidated Revenue Fund, where they will remain until
claimed.
Clause 82 - Payment of unclaimed money to a State or
Territory authority
215. This clause sets out the circumstances where
RSA providers are required to pay, and provide information about, unclaimed RSA
money to a State or Territory authority under a law of a State or Territory
instead of to the Commissioner of Taxation. An RSA provider who intentionally
or recklessly breaches this clause is guilty of an offence.
216. An RSA
provider must comply with the law of the State or Territory, instead of with
clauses 79, 80 and 81, in relation to unclaimed RSA money where this law has
similar requirements to the unclaimed RSA money provisions set out in this Part.
For such a law to be similar, it must include provisions that have the same
effect as the requirements of clauses 79, 80, 81 and 83.
Clause 83 -
Register of unclaimed money
217. This clause provides for the
Commissioner of Taxation to keep a register which includes the particulars of
all unclaimed RSA moneys that have been paid to the Commissioner of Taxation.
This register will assist persons in tracing and redeeming their unclaimed RSA
money. The tax file numbers of RSA holders may be used to facilitate tracking
of entitlement to these benefits.
Clause 84 - Meaning of State or
Territory authority
218. This clause clarifies, for the purposes
of the payment of unclaimed RSA money, who can receive this money if a law of a
State or Territory requires this money to be paid to a State or Territory or an
authority of a State or Territory.
PART 9 - FACILITY TO PAY BENEFITS TO ELIGIBLE ROLLOVER
FUNDS
OUTLINE OF THE PART
219. This Part provides a facility
to enable RSA providers, which cannot or do not wish to retain amounts in the
RSAs in circumstances which will be prescribed, to apply on behalf of the RSA
holders to transfer these amounts to an eligible rollover fund
(ERF).
220. The main role of an ERF is to provide a low cost haven for
persons with small amounts of superannuation or whose whereabouts are unknown
(that is, ‘lost’ members). The majority of RSA holders whose
accounts are transferred to an ERF will be transferred as a result of the RSA
provider making a choice as to the particular ERF to which they are transferred
(for example, where the person is ‘lost’, the RSA provider rather
than the RSA holder will make the choice as to the ERF to which the RSA holder
will be transferred). The provisions in this Part facilitate such a transfer
(and the requirements of the Superannuation Industry (Supervision) Act
1993 will ensure that the RSA provider is fully informed before transferring
RSA holders to the ERF).
Clause 85 - Object of
Part
221. This clause sets out the object of the
Part.
Clause 86 - Interpretation
222. This clause sets out
the definition of eligible rollover fund for the purposes of this
Part.
Clause 87 - Payment of benefits to eligible rollover
fund
223. This clause facilitates the payment of amounts in RSAs to
ERFs.
224. Provision is made for conditions to be prescribed in relation
to an RSA provider making an application to an ERF on behalf of the holder of an
RSA.
225. This clause gives RSA providers the power to apply to the
trustee of an ERF, on behalf of the holder of an RSA, for the issue of a
superannuation interest in the ERF.
226. The clause also regulates the
position of the RSA holder and RSA provider in respect of the application and
the issue of the interest in the ERF. This includes specifying that if a
superannuation interest is issued in accordance with such an application, the
RSA holder will cease to have any rights against the RSA provider. If another
person had a contingent right (derived from the holder’s capacity as
holder of an RSA) to a death or disability benefit immediately before the
interest was issued, that person will also cease to have contingent rights
against the RSA provider.
227. This clause does not affect an application
made by an RSA holder to an ERF. It only applies to cases where the RSA
provider makes the application.
Clause 88 - Operating standards for
RSA providers - information and records
228. This clause allows the
operating standards to include requirements relating to the information and
records to be given to the trustee of the ERF and standards requiring the RSA
provider to keep and retain a record of the application when applying on behalf
of an RSA holder for the issue of a superannuation interest in an ERF.
PART 10 - MONITORING AND INVESTIGATING RSA PROVIDERS
OUTLINE OF
THE PART
229. This Part provides for the monitoring, investigation and
conduct of examinations in relation to the provision of RSAs. The powers to
monitor, investigate and conduct examinations are not part of a prudential
function, but relate to the function of ensuring compliance of RSA providers
with retirement income standards. This Part gives the Commissioner the ability
to effectively monitor the compliance of an RSA provider.
230. To
ensure that the exercise of the functions above is properly evidenced, the Part
provides for comprehensive records to be made of examinations and
investigations, and that a report in respect of a completed or terminated
investigation is made.
231. The Part also provides for offences and for
the evidentiary use of certain material. This ensures consistency in the
application of the legislation Australia-wide, and also expedites processes
where the existing common law may be restrictive.
DIVISION 1 - OBJECTS
OF PART
Clause 89 - Objects of Part
232. This clause
sets out the objects of the Part.
DIVISION 2 - MONITORING RSA
PROVIDERS
Clause 90 - Information to be given to
Commissioner
233. This clause provides that the Commissioner
or an authorised person (defined in clause 16) may, by notice in writing to the
RSA provider, require the RSA provider to give the Commissioner or an authorised
person information, or a report on matters, as set out in the notice. This may
include the tax file number of the RSA provider [subclause
142(5)].
Clause 91 - Commissioner may require production of
books
234. The Commissioner or an authorised person may by
notice in writing to a relevant person in relation to an RSA provider, require
the relevant person to produce to the Commissioner or an authorised person any
books (defined in clause 16) which relate to the affairs of the RSA provider, to
the extent that the books relate to the provision of RSAs [subclause
91(1)].
235. Where any book produced pursuant to subclause
(1) is not in English, the Commissioner or an authorised person may require the
relevant person to produce a version of the book that is in English
[subclause 91(2)].
236. Once any books have been produced
pursuant to this clause, the books may be inspected, and copies and extracts may
be taken from the books [subclause 91(3)].
Clause 92 -
Access to premises
237. An authorised person may access any
premises at a reasonable time where the authorised person has reason to believe
that books relating to the provision of RSAs are kept and may inspect any books
kept on the premises or make copies of, or take extracts from, any such books
[subclause 92(1)]. An authorised person must not enter the
premises unless the occupier of the premises gives his or her consent to the
authorised person entering the premises [subclause
92(2)].
DIVISION 3 - INVESTIGATIONS BY
COMMISSIONER
Clause 93 - Investigation of RSA
provider
238. The Commissioner may give a notice to an RSA
provider stating that the Commissioner proposes to conduct an investigation into
the whole or a part of the affairs of the RSA provider. To do this, it must
appear to the Commissioner that a contravention of this Act (or regulations made
under it) may have occurred or be occurring, or that the RSA provider has
refused or failed to give effect to a determination of the Superannuation
Complaints Tribunal [subclause 93(1)]. Where such a notice is
given, the remaining provisions of Division 3 apply in relation to the RSA
provider [subclause 93(2)].
Clause 94 -
Inspectors
239. This clause provides for the Commissioner to
appoint a member of the Commissioner’s staff, a consultant under paragraph
(1)(b) or a member of staff of a regulatory agency as prescribed under paragraph
(1)(c) as an inspector to conduct an investigation of the whole or a part of the
affairs of an RSA provider. The inspector is to be issued with an identity card
which must be returned on the cessation of the appointment. Failure to return
the identity card is an offence.
Clause 95 - Delegation by
inspector
240. This clause provides that an inspector may
delegate to a member of the Commissioner's staff any of his or her powers as an
inspector, and that a delegate must, pursuant to a request, produce the
instrument of delegation or a copy of it for inspection to the person in
relation to whom the delegated powers are exercisable or a person affected by
the exercise of those powers.
Clause 96 - Commissioner may exercise
powers of inspector
241. This clause provides that the
Commissioner may exercise any of the powers of an inspector under this Part,
and, if the Commissioner exercises any of those powers, any reference to an
inspector under this Part is taken to be a reference to the
Commissioner.
Clause 97 - Inspector may enter premises for purposes of
an investigation
242. This clause empowers an inspector, while
conducting an investigation under this Part [subclause 93(2)], to
enter premises at any reasonable time without the permission of the occupier
provided the inspector believes on reasonable grounds that it is necessary to
enter the premises to investigate affairs of the RSA provider. Having entered
the premises, the inspector may inspect any books kept on the premises relating
to the affairs of the RSA provider, or that the inspector believes relate to
those affairs, and make copies or take extracts from the books.
Clause
98 - Inspector may require production of books
243. This
clause provides that an inspector, by written notice, may require a relevant
person (defined in clause 16), or any other person who the inspector believes
has custody or control of books which relate to an investigation of the affairs
of an RSA provider, to produce the books to the inspector.
Clause 99 -
Powers of inspector to require assistance from, and examine, current and former
relevant persons and other persons
244. This clause provides
that an inspector may, by written notice, require a relevant person (defined in
clause 16) or any person the inspector believes can give information in relation
to an investigation of an RSA provider, to give all reasonable assistance in
connection with an investigation, and/or to require the person to appear before
the inspector for examination in connection with the
investigation.
Clause 100 - Application for warrant to seize books not
produced
245. This clause provides that an inspector may apply
to a magistrate for the issue of a warrant to search premises for books that
have not been produced pursuant to a requirement under this
Part.
Clause 101 - Grant of warrant
246. This clause
sets out provisions relating to the grant of a warrant pursuant to an
application made under clause 100, including the things or acts the warrant may
authorise and the justification for issue of the warrant. The clause also
specifies when the warrant is to cease to have effect.
Clause 102 -
Powers if books produced or seized
247. This clause sets out
things or acts a person may do in relation to books produced to a person
pursuant to a requirement under this Part or seized pursuant to a warrant issued
under clause 101. The clause permits retention of the books for the purposes of
the investigation, use of the books in a proceeding and inspection of the books
by another person who would otherwise be entitled to inspect them. The books
may only be retained as long as it is necessary for the purposes of the
investigation, for the purposes of a power conferred under this clause, for a
decision to be made about whether a proceeding should be begun, or for the
proceeding to be carried out [subclause 102(5)]. No-one is
entitled to claim a lien over the books as against the person, but this does not
prevent another person from claiming such a lien according to law
[subclause 102(6)].
Clause 103 - Powers if books not
produced
248. This clause provides that where a person fails
to produce particular books in compliance with a requirement made under this
Part, that person may be required to state to the best of his or her ability
where the books may be found, or who last had possession or control of the books
and where that person may be found.
DIVISION 4 -
EXAMINATIONS
Clause 104 - Application of
Division
249. This clause sets out the application of the
Division.
Clause 105 - Requirements made of an
examinee
250. This clause provides that the inspector may
examine an examinee on oath or affirmation, and therefore require the examinee
either to take an oath or make an affirmation. The inspector may administer an
oath or affirmation, and may require the examinee to answer questions put to the
examinee at the examination. The examination is required to be on oath or
affirmation to emphasise the seriousness of the proceedings to the person being
examined.
Clause 106 - Examination to be in
private
251. This clause provides that an examination is to be
in private, and sets out the persons who may be present during an examination.
Subclause (3) provides that a person who knowingly contravenes this clause is
guilty of an offence.
252. The limit on the people entitled to be
at an examination ensures fairness and absence of duress during the
examination.
Clause 107- Examinee's lawyer may
attend
253. This clause provides that the examinee's lawyer
may be present at the examination and may address the inspector and examine the
examinee about matters about which the inspector has examined the examinee. It
further provides that the inspector may require a person who is addressing the
inspector or examining the examinee to stop addressing the inspector or
examining the examinee if he or she is of the opinion the person is trying to
obstruct the examination.
Clause 108 - Record of
examination
254. This clause provides that the inspector has
to ensure that a written record of an examination is made, and that the
inspector may require the examinee to read the record, or have it read to him or
her, and sign the record. The inspector must give the examinee a copy of the
written record, which may be subject to conditions imposed by the
inspector.
Clause 109 - Giving copies of record to other
persons
255. This clause provides that the Commissioner may
give a copy of a record of examination to a person’s lawyer where the
lawyer satisfies the Commissioner that the person is carrying on, or is
contemplating in good faith, a proceeding in respect of a matter to which the
examination related [subclause 109(1)]. It also limits the use to
which the copy or a copy of the record of examination provided under subclause
109(1) can be put [subclause 109(2)].
Clause 110 -
Copies given subject to conditions
256. If an inspector
imposes conditions under subclause 108(3), where the inspector gives an examinee
a copy of a written record of an examination, the examinee or any other person
who has the record or a copy of it or has it or a copy under his or her control
must comply with the conditions set by the inspector pursuant [subclause
110(1)]. A reckless or intentional contravention of any of the
conditions is an offence [subclause 110(2)].
Clause 111
- Record to accompany report
257. This clause sets out the
circumstances under which a record of an examination is to accompany a report
about an investigation prepared pursuant to clause 112.
DIVISION 5 -
REPORTS
Clause 112 - Report of
inspector
258. This clause provides that an inspector must
prepare a report in respect of an investigation undertaken, and that certain
particulars must be included in the report.
259. Subclause (3)
sets out the things the Commissioner must do in respect of an inspector's
report, and specifies the persons to which a copy of the report may be given if
it relates to the affairs of that person. The clause also specifies the
organisations to which a report may be given if the report relates to a
contravention of a law of the Commonwealth, a State or
Territory.
DIVISION 6 - OFFENCES
Clause 113 - Persons to
comply with requirements made under this Act
260. This clause
provides that it is an offence for a person, without reasonable excuse, to
intentionally or recklessly refuse or fail to comply with a requirement of the
Commissioner, an authorised person or an inspector under this
Act.
Clause 114 - Concealing books relevant to
investigation
261. This clause provides that it is an offence
for a person to conceal, mutilate, alter or destroy a book which relates to a
matter that the person knows the Commissioner is investigating or is about to
investigate, with the intention of delaying or impeding the investigation or
proposed investigation. It is also an offence for a person in such
circumstances to take or send a book relating to such a matter out of the State
or Territory in which it is located, or out of Australia.
Clause 115 -
Self-incrimination
262. This clause provides that it is not a
reasonable excuse for an individual to refuse or fail to do the things or acts
specified in paragraphs (1)(a) to (c) (that is, giving information, signing a
record or producing a book) on the basis that the thing or act might
incriminate the individual or make the individual liable to a penalty
[subclause 115(1)].
263. Where before making an
oral statement, signing a record or producing a book pursuant to a requirement
under this Part, an individual claims that the statement etc, might tend to
incriminate the individual or make the individual liable to a penalty, and where
the statement, etc. might actually tend to incriminate the individual or make
the individual liable to a penalty, the statement etc, is not admissible in
evidence against the individual in the circumstances set out in paragraphs
115(3)(a), (b) and (c) except as provided in subclause (4) [subclauses
115(2) and (3)]. This clause refers to ‘an individual’
rather than ‘a person’, in order to prevent corporations from
claiming the common law privilege against self-incrimination.
264. This
clause provides that a claim that producing a book that will tend to incriminate
the person or make the person liable to a penalty is not a reasonable excuse for
not producing a book. A book must be produced, although the book may not be
used in evidence against the individual in a criminal proceeding or a proceeding
for the imposition of a penalty.
Clause 116 - Legal professional
privilege
265. This clause provides that, in the circumstances
set out in subclause (1), a lawyer is entitled to refuse to comply with a
requirement unless the persons specified in paragraphs (2)(a) and (b) consent to
the lawyer complying with the requirement [subclauses 116(1) and
(2)]. Paragraph (2)(a) refers to a body corporate under official
management or administration or which is being wound up as a separate category,
to ensure that the correct person, that is, a liquidator etc, is able to consent
to the lawyer complying with the requirement, and not the responsible officer of
the body corporate.
266. Where a lawyer refuses to comply with the
requirement to give information or to produce a book, the lawyer must as soon as
practicable give to the person making the requirement a notice setting out the
particulars required by paragraphs (a) to (c) [subclause
116(3)].
267. An intentional or reckless contravention of
this clause is an offence
[subclause 116(4)].
Clause 117 - Powers of Court
where non-compliance with this Act
268. This clause provides
that where the Commissioner is satisfied that a person has, without reasonable
excuse, failed to comply with a requirement, the Commissioner may certify the
failure to the Court, and the Court may inquire into the case and order the
person to comply with the requirement.
DIVISION 7 - EVIDENTIARY USE OF
CERTAIN MATERIAL
Clause 118 - Statements made at an examination:
proceedings against examinee
269. Under this Act, a person is
required to answer certain questions (subclause 105(3) and clause 113
refer). This clause provides that a statement a person makes at an examination
is not admissible as evidence against the person in a proceeding if the
requirements set out in subclauses (2) to (5) are met.
270. The
statement is not admissible in a criminal proceeding or a proceeding for the
imposition of a penalty under the self-incrimination exception, where the person
claims that it might tend to incriminate the person or make the person liable to
a penalty. This must be claimed by the person prior to making the statement
[subclause 118(2)]. If the person objects to evidence of the
statement being admitted and the statement is not relevant to the proceeding,
the statement is not admissible under the irrelevant statement exception
[subclause 118(3)]. Where a statement was qualified by another
statement at the examination and the person objects to the admission of evidence
of the initial statement where evidence of the qualifying statement is not
tendered in the proceeding, the initial statement is not admissible under the
related statement exception [subclause 118(4)]. The statement is
not admissible where the person objects to the admission of evidence of the
statement and the statement is one in relation to which, but for subsection (1),
the person would have been able to claim legal professional privilege
[subclause 118(5)].
271. Subclauses (6) to (8) are
technical clauses which provide that subsection (1) is to apply in relation to
joint proceedings, a signed written record of an examination of a person is
prima facie taken to be evidence of the statements it records, and the
admissibility of other evidence or statements made at the examination is not
limited or affected by this Part.
Clause 119 - Statements made at an
examination: other proceedings
272. This clause provides that
if evidence of a matter would be admissible if it was given in person by a
witness, and where the witness does not attend court, a statement that the
witness made at an examination and that tends to establish that matter is
admissible in the proceeding as evidence of that matter in the special
circumstances set out in subclause (2). These include where the absent witness
cannot be found, or is dead, unless another party to the proceeding requires the
party tendering that evidence to call the witness.
Clause 120 - Weight
of evidence admitted under section 119
273. This clause sets
out how much weight (if any) is to be given to a statement made by an absent
witness (which was made by the absent witness at an examination and which is
admitted as evidence under clause 119).
274. Subclause (3) sets
out provisions relating to credibility and inconsistent statements which are to
apply to the evidence of the absent witness.
275. If evidence
cited or adduced by the cross-examining party would have been inadmissible if
the absent witness were present, then it is also not admissible in relation to
the absent witness [subclause 120(4)].
Clause 121 -
Objection to admission of statements made at
examination
276. This clause sets out requirements relating to
a party giving notice to another party concerning the making of an application
to have specified statements made at an examination admitted in evidence in a
proceeding. It also provides for the other party to give notice of objection to
admission of those statements.
277. This clause is intended to
ensure that the parties to a proceeding are aware of the facts in issue, in
relation to a statement made at an examination, in sufficient time before a
hearing commences. The clause is also therefore intended to assist in providing
an efficient and effective hearing.
Clause 122 - Copies of, or
extracts from, certain books
278. This clause provides that a
copy of, or an extract from, a book relating to the affairs of an RSA provider
is admissible as evidence in a proceeding as the original would be. The copy of
the book or extract thereof must be proven to be a true copy and for this
purpose a person who has compared the copy or extract with the original may give
evidence orally, by affidavit or statutory declaration that the copy is a true
copy of the book or relevant part or extract.
Clause 123 - Report
under Division 5
279. This clause provides that a copy of a
report certified by the Commissioner is admissible in a non-criminal proceeding
as prima facie evidence of any facts reported by the inspector in the report,
unless proved otherwise [clause 124].
Clause 124 -
Exceptions to admissibility of report
280. This clause sets
out the circumstances in which, after a party tenders a certified copy of a
report as evidence against the other party, the certified copy of the report is
not admissible under clause 123 in a non-criminal proceeding as evidence of any
facts reported by the inspector in the report. The clause also sets out when a
party may apply to cross-examine in relation to a report and whether a court or
tribunal must grant an application of a party to cross-examine.
Clause
125 - Material otherwise admissible
281. This clause provides
that evidence is not inadmissible as a result of this Division if it would have
been admissible in the absence of the Division.
DIVISION 8 -
MISCELLANEOUS
Clause 126 - Commissioner may cause civil proceeding
to be begun
282. This clause provides that, where, as a result
of an investigation or from a record of an examination, it appears to the
Commissioner to be in the public interest for a person to begin or carry on a
proceeding as set out in paragraphs (a) and (b), the Commissioner may begin or
carry on a proceeding if the person is a body corporate - in that person’s
name, otherwise in that person’s name only with the consent of that
person.
Clause 127 - Person complying with requirement not to incur
liability to another person
283. This clause provides that a
person is not to incur a liability to another person as a result of complying
with a requirement of this Part.
PART 11 - TAX FILE NUMBERS
OUTLINE OF THE PART
284. The
purpose of this Part is to allow for the tax file number (TFN) of an RSA holder
to be used to assist in streamlining, and reducing the costs of, the
administration of RSAs. The Part also allows the Insurance and Superannuation
Commissioner (ISC) to obtain the TFN of RSA providers.
285. The operation
of this Part is intended to:
• reduce the numbers of ‘lost’
RSA holders and small amounts in RSAs (by enhancing the location, identification
and amalgamation of amounts in RSAs);
• facilitate the efficient
administration of RSAs; and
• assist the ISC to properly supervise the
RSA industry.
286. To achieve these broader purposes, this Part
will:
• enable an RSA holder to quote his or her TFN to the RSA
provider, either directly or through his or her employer;
• require RSA
providers to seek RSA holders’ TFNs where RSA holders have not already
quoted them;
• allow RSA providers to provide TFNs when transferring
amounts in an RSA to other RSAs, superannuation entities or regulated exempt
public sector superannuation schemes; and
• allow the ISC to require
RSA providers’ TFNs in certain circumstances.
DIVISION 1 -
OBJECT OF PART
Clause 128 - Object of Part
287. This
clause sets out the object of the Part.
DIVISION 2 - QUOTATION OF
HOLDER’S TAX FILE NUMBER
Clause 129 - Employee may quote to
employer
288. This clause provides that an employee may quote his or
her TFN to the employer.
289. The usual entry point for moneys into RSAs
will be when an employer opens an RSA or makes a contribution to an RSA on
behalf of its employees. In order to ensure that TFNs are attached to his or
her benefits, the employee may quote his or her TFN to the employer. However,
such quotation by the employee to his or her employer is not compulsory and
there are no sanctions for not providing a TFN.
Clause 130 - Employer
may inform RSA provider of tax file number
290. This clause specifies
when an employer may quote the TFN of an employee to the RSA
provider.
291. Only if, after the employer has made a contribution to an
RSA, and the employee subsequently quotes his or her TFN to the employer, does
the employer have a choice as to whether to inform the RSA provider of the
employee’s TFN.
Clause 131 - Employer must inform RSA provider
of tax file number
292. This clause specifies when an employer
must inform the RSA provider of the employee’s
TFN.
293. Only if the employee quotes his or her TFN to the employer, and
the employer subsequently contributes an amount in the RSA in the name of the
employee, is the employer obliged to pass on the TFN to the RSA
provider.
294. In such instances, an employer is only obliged to pass on
the TFN to the RSA provider once (in respect of the first time an employee
quotes his or her TFN to the employer).
295. Such a quotation to an
employer generally places an obligation on the employer to pass on the TFN to
the RSA provider when the next contribution is made (that is, by the end of the
day on which the employer makes the contribution). The exception to this is
where the TFN is provided less than 14 days before the contribution is made, in
which case the employer must pass the TFN to the RSA provider within 14 days of
it being quoted by the employee. In either case, the employer may pass on the
TFN sooner, if this is convenient.
296. Intentional or reckless
contravention of this provision by an employer is an offence.
DIVISION
3 - QUOTATION, USE AND TRANSFER OF HOLDER’S TAX FILE
NUMBER
Clause 132 - Holder or applicant may quote tax file
number
297. This clause provides that the holder of an RSA, or a
person applying to become the holder of an RSA, may quote his or her TFN
directly to the RSA provider. However, such quotation to the RSA provider is
not compulsory and there are no sanctions for not providing a
TFN.
Clause 133 - RSA provider may request holder’s or
applicant’s tax file number
298. This clause allows an RSA
provider to seek, in a manner approved by the Commissioner, the TFN of an RSA
holder or of a person applying to become an RSA holder. However, the RSA holder
or applicant is not under an obligation to comply with the
request.
Clause 134 - RSA provider must request person becoming holder
of an RSA to quote tax file number
299. This clause establishes the
circumstances under which an RSA provider is obliged to seek the TFN from a
person becoming the holder of an RSA.
300. If a person has not quoted his
or her TFN to the RSA provider by the time that person becomes the holder of an
RSA, the RSA provider must request (in a manner approved by the Commissioner),
by the end of the 30th day after the day on which the person becomes a holder,
that person to quote his or her tax file number to the RSA
provider.
301. The RSA provider need not make such a request if, before
the request and the required time, the person quotes his or her tax file number.
However, the person is not under any obligation to comply with such a
request.
302. Intentional or reckless contravention by the RSA provider
of the requirement to make such a request, is an offence.
Clause 135 -
Use of tax file number for certain purposes
303. This clause outlines
the purposes for which TFNs may be used by RSA providers.
304. Once an
RSA provider has been, or is taken to have been, quoted the TFN of an RSA holder
or of a person applying to become an RSA holder, then subject to certain
circumstances, the RSA provider may use it to locate and identify amounts held
for a particular person and, where appropriate, to consolidate those
amounts.
305. The exceptions to this are that the TFN may only be used to
identify amounts held for a particular person where other information is
insufficient to identify the amounts or, if that other information is
sufficient, to confirm the identification of the amounts resulting from the use
of that information.
306. This clause also provides that an RSA provider
may only retain a record of a person’s TFN for as long as the person holds
an RSA or ceases to be an applicant. If the person ceases to be an RSA holder
or ceases to be an applicant, the RSA provider must, within a reasonable time,
destroy all records of the person’s TFN unless it has also been provided
for another purpose and is still required for that purpose (for example, in
respect of the person’s bank account).
307. Intentional or reckless
contravention of this requirement is an offence.
Clause 136 - RSA
provider must inform other RSA provider or trustee of certain superannuation
entities of tax file number for certain purposes
308. This clause
requires RSA providers to provide TFNs to another RSA provider or to a trustee
when transferring any part of an amount in an RSA to another RSA, a
superannuation entity or a regulated exempt public sector superannuation
scheme.
309. However, if the RSA holder has requested the RSA provider
not pass on his or her TFN, then the RSA provider must not do so. If the RSA
provider intentionally or recklessly transfers the TFN when the RSA holder has
requested this not be done, the RSA provider is guilty of an
offence.
DIVISION 4 - METHOD OF QUOTATION OF TAX FILE NUMBERS,
INCLUDING DEEMED QUOTATION
Clause 137 - Method of quoting tax file
number
310. This clause provides the alternative methods by which a
person is taken to have quoted his or her TFN to another person. The clause
makes provision for such methods as contained in the Division or for the manner
of quoting to be in the manner approved by the Commissioner.
Clause
138 - Employee taken to have quoted to RSA provider where RSA provider informed
by employer
311. This clause provides that an employee who is an RSA
holder, or is applying to become an RSA holder, is deemed to have quoted his or
her TFN to an RSA provider where the employee has quoted his or her TFN to an
employer and the employer subsequently informs the RSA
provider.
Clause 139 - Information provided by RSA provider taken to
have been provided by holder
312. This clause provides that the
holder of an RSA will be deemed to have quoted his or her TFN to another RSA
provider or the trustee of a superannuation entity or regulated exempt public
sector superannuation scheme if an RSA provider informs the other RSA provider
or trustee under subclause 136(2) where the amount, or any part thereof, in an
RSA is transferred.
Clause 140 - Person claiming benefit taken to have
quoted where he or she provided tax file number in connection with
claim
313. This clause provides that the holder of an RSA will be
deemed to have quoted his or her TFN to an RSA provider where, in applying to
the RSA provider for payment of an RSA benefit, the RSA holder sets out his or
her TFN in the application.
Clause 141 - Holder or applicant taken to
have quoted if he or she quoted for other purposes
314. This clause
provides that the holder of an RSA, or a person applying to become the holder of
an RSA, will be deemed to have quoted his or her TFN to an RSA provider where
the person had quoted his or her TFN to the RSA provider for taxation purposes
under a provision of the Income Tax Assessment Act
1936.
DIVISION 5 - PROVISION OF TAX FILE NUMBERS IN FORMS
ETC.
Clause 142 - Forms etc. may require tax file
number
315. This clause provides for the collection of an RSA
provider’s TFN. The forms or notices that may require an RSA
provider’s TFN include the form for the application for approval as an RSA
institution, the annual return form provided by RSA providers, the unclaimed
money statement, and the notice under clause 90 to provide information or a
report on such information in relation to a specified year of income of the RSA
provider.
316. This clause also provides that the approved form of
statement regarding unclaimed money and the register for unclaimed money may
require the provision of a person’s TFN.
Clause 143 - Failure to
quote tax file number
317. This clause provides that the failure by a
person to quote his or her tax file number does not mean that the person has
omitted a matter or thing from a statement made to an RSA
officer.
DIVISION 6 - GENERAL
Clause 144 - State
insurance
318. This clause, in recognising that the Commonwealth
lacks power to legislate with respect to State insurance (section 51(xiv) of the
Commonwealth Constitution) provides that this Part does not apply with respect
to State insurance that does not extend beyond the limits of the State
concerned.
Clause 145 - This Part to be superannuation
law
319. This clause provides that this Part will be a superannuation
law for the purposes of any guidelines in force under section 17 of the
Privacy Act 1988.
PART 12 - OFFENCES RELATING TO STATEMENTS, RECORDS ETC.
OUTLINE
OF THE PART
320. This Part makes it an offence to make a false or
misleading statement, to keep incorrect records or to falsify or conceal
identity. These offences are intended to safeguard the system of supervision
which is provided for by this Act. The Act does not provide for the prudential
supervision of RSA providers. Rather, it provides for the supervision of RSA
providers’ compliance with retirement income standards.
Clause
146 - Object of Part
321. This clause sets out the object of
the Part.
Clause 147 - Interpretation
322. This
clause sets out definitions of a number of words and expressions for the
purposes of this Part only.
Clause 148 - False or misleading
statements
323. This clause provides that it is an offence to
make a statement to an RSA officer that is false or misleading in a material
particular or to omit from a statement any matter or thing without which the
statement is misleading in a material particular [subclause
148(1)]. However, clause 143 provides that failing to quote a tax file
number does not constitute an offence under this clause.
324. In
a prosecution for an offence under subclause (1), it is a defence if the person
proves that he or she did not know or could not reasonably be expected to have
known that the statement concerned was false or misleading [subclause
148(2)].
Clause 149 - Incorrectly keeping records
etc.
325. This clause provides that it is an offence to
incorrectly keep any records or to incorrectly make a record of any matter,
transaction, act or operation, where they are required to be kept under this
Bill or the regulations. However, grounds for a defence against a prosecution
under this clause are available [subclause 149(2)].
326. An
offence under this clause is of a less serious nature than an offence under
clause 152, which requires a greater degree of negligence (recklessness) or
intent.
Clause 150 - Recklessly making false or misleading
statements
327. This clause provides that it is an offence to
recklessly make a statement to an RSA officer that is false or misleading in a
material particular or to omit from a statement any matter or thing without
which the statement is misleading in a material particular.
Clause
151 - Intentionally making false or misleading
statements
328. This clause provides that it is an
offence to intentionally make a statement to an RSA officer that is false
or misleading in a material particular or to omit from a statement any matter or
thing without which the statement is misleading in a material particular.
Clause 152 - Intentionally or recklessly incorrectly keeping records
etc.
329. This clause provides that it is an offence to
intentionally or recklessly keep any records or to intentionally or recklessly
record any other matter, transaction, act or operation where they are required
to be kept or recorded under this Bill or the regulations.
330. As this
clause requires either intent or a higher degree of negligence (recklessness)
than that under clause 149, the penalty imposed by this clause is
greater.
Clause 153 - Incorrectly keeping records with intention of
deceiving or misleading etc.
331. This clause sets out the
circumstances under which it is an offence to incorrectly keep any records, or
make an incorrect record of any matter, transaction, act or operation, if a
particular intention is also evidenced, such as intending to deceive or mislead
the Commissioner or a particular RSA officer, or intending to hinder or obstruct
the investigation of an offence against or arising out of this Act or
regulations.
Clause 154 - Falsifying or concealing identity with
intention of deceiving or misleading etc.
332. This clause sets out
the circumstances under which it is an offence to falsify or conceal the
identity of, or the address or location of a residence or business of, a person.
It also sets out the circumstances under which it is an offence not to do
something which has the result of helping to conceal or falsify the identity of,
or the address or location of, a residence or business of a person. Each set of
circumstances requires a particular intention to be evidenced, such as intending
to deceive or mislead the Commissioner or a particular RSA officer, or intending
to hinder or obstruct the investigation of an offence against or arising out of
this Act or regulations.
PART 13 - POWERS OF COURT
OUTLINE OF THE PART
333. This
Part sets out the rules about the power of the courts to deal with matters
arising under this Act. The Part clarifies existing powers of the Court, such
as the power to punish for contempts of the Court, and states the effect of
irregularities on proceedings. Additionally, the Part sets out the rules about
the power of the Court to grant relief to an RSA official where the official is
or may be liable in a civil proceeding for official conduct, and the power of
the Court in respect of orders, directions, and injunctions. Court and
court are defined in clause 16.
Clause 155 - Object of
Part
334. This clause sets out the object of the
Part.
Clause 156 - Power to grant relief
335. This
clause provides that an RSA official (defined in subclause (5)) may apply to a
court for relief from liability for official misconduct (defined in subclause
(5)) in a civil proceeding in certain circumstances. The court must be
satisfied that the official has acted honestly and that the official should be
excused for the official misconduct before it can grant relief [subclause
156(2)]. Once it is satisfied of these factors, the court has the
discretion to relieve the official wholly or partly from the liability, and on
whatever terms it believes are appropriate [subclause 156(1)].
336. In a trial by jury, if the judge believes that relief should
be given under subsection (1), the judge may withdraw the case in whole or in
part from the jury and direct judgement to be entered for the RSA official
[subclause 156(3)]. The clause also defines other words and terms
for the purposes of the clause [subclause
156(5)].
Clause 157 - Power of Court to give directions with
respect to meetings ordered by the Court
337. This clause
provides that where the Court orders a meeting to be convened it may, subject to
this Act, give directions with respect to the convening, holding and conduct of
the meeting.
Clause 158 - Irregularities
338. This
clause provides that the Court may make orders in certain circumstances to
prevent proceedings or meetings under this Act from being invalidated on account
of procedural irregularities. The Court must not make an order pursuant to this
clause unless it is satisfied as to the matters specified in paragraphs (a) to
(c) [subclause 158(8)].
Clause 159 - Power of Court
to prohibit payment or transfer of money or property
339. This
clause is intended to protect the interests of certain creditors and holders of
RSAs.
340. If the circumstances set out in paragraphs (1)(a) to
(c) are satisfied, the Court may make one of a series of orders under subclause
(4) in relation to prohibiting the payment or transfer of money or property
[subclause 159(1)]. Where the Commissioner applies to the Court
and the Court considers it necessary or desirable to protect the interests of
any holders of RSAs, the Court may make one of a series of orders under
subclause (4) [subclause 159(2)].
341. Subclause (3) is a
technical clause which ensures that subclause (4) is effective in relation to
subclause (2).
342. The orders that the Court may make in relation
to subclauses (1) and (2) are intended to prevent the contravening person or the
RSA provider, or a person on the contravening person’s or RSA
provider’s behalf, from disposing of property or money, or from moving the
property or money out of the jurisdiction [paragraphs (4)(a)-(d)].
The property intended to be protected includes a debt owing to the contravening
person or RSA provider [paragraph (4)(a)]. ‘Property’
includes where a person has an interest in the property, but not as the sole
beneficial owner [subclause 159(5)]. The Court may also make
other orders to prevent the contravening person or RSA provider from leaving
Australia [paragraphs (4)(e) and (f)].
343. Subclause
(6) is a technical clause which provides that subclause (1) is not to be limited
by subclause (5), for example, the meaning of ‘property’ is not
limited by subclause (5).
344. Subclauses (7), (8) and (10) provide for
other types of orders which can be made, such as interim orders. The Court must
not require an undertaking as to damages of the applicant or any other person
where an interim order is made under subclause (8) [subclause
159(9)].
345. The Court may provide for an order made under
subclause (1), (2) or (8) to operate for a set duration or until another order
is made under this clause which discharges the initial order [subclause
159(11)].
346. It is an offence to intentionally or recklessly
contravene an order by the Court under this clause [subclause
159(14)].
Clause 160 - Court may order the disclosure of
information or the publication of advertisements - contravention of provisions
relating to provision of RSAs etc.
347. This clause sets out
the types of orders that the Court may make regarding the disclosure of
information or the publication of advertisements, on the Commissioner's
application, where a person has engaged, is engaging, or is proposing to engage,
in conduct contravening Parts 5 or 7.
348. It is an offence to
intentionally or recklessly contravene an order under subclause (2) or (3)
[subclause 160(4)].
Clause 161 -
Injunctions
349. The Court may in certain circumstances grant
an injunction for the purposes of this Act where certain behaviour or conduct
has occurred, is occurring or may occur [subclause 161(1)]. The
injunction is to restrain the perpetrator from engaging in the conduct, or to
make other requirements of the perpetrator, and the injunction may only be
granted on the application of the Commissioner or of a person whose interests
have been or who would be affected by the conduct [subclause
161(2)].
350. Where a person has refused or failed, or is
refusing or failing to do an act or thing that the person is required to do
under this Act, an injunction may be granted to require the person to do the act
or thing, on terms that the Court thinks appropriate [subclause
161(3)].
351. Where an application is made under subclause (1) or
(3) and all of the parties consent, the Court may grant an injunction
[subclause 161(4)].
352. Other types of
injunctions may also be granted, such as interim injunctions [subclauses
161(5) to (8)]. If the Commissioner applies to the Court for the grant
of an injunction, the Court must not require an undertaking as to damages of the
applicant or any other person as a condition of granting an interim injunction
[subclauses 161(5) and (9)].
353. Where
proceedings for an injunction are initiated under this clause, the Court may
instead make an order under clause 159 [subclause 161(10)]. Where
the Court is able to grant an injunction restraining a person from doing
something or requiring that person to do something, the Court may instead, or in
addition, order that person to pay damages to another person [subclause
161(11)].
354. Although decisions by the Superannuation
Complaints Tribunal are not enforceable, the Court may give effect to a
determination by, or direct a reconsideration of, a matter in accordance with
the directions of the Superannuation Complaints Tribunal, by virtue of the
injunctions available under this clause
[subclause 161(12)].
Clause 162 - Effect of clauses
159, 160 and 161
355. This clause provides that nothing in
clause 159, 160 or 161 is to be inferred as narrowing the effect of anything
else in clause 150, 160 or 161.
Clause 163 - Power of Court to punish
for contempt of court
356. This clause provides that the Court
is not precluded by any provision under this Act from punishing a person for
contempt of the Court. Punishment for contempt of the Court may be imposed in
addition to the penalty under the relevant provision.
Clause 164 -
Court may resolve transitional difficulties
357. This clause
provides that, subject to the Constitution, the Court may make orders to resolve
difficulties arising from the interaction of a provision of another law with the
provisions of this Act. This clause enables the Court to make an order, as it
thinks appropriate, to remove those difficulties.
PART 14 - PROCEEDINGS
OUTLINE OF THE PART
358. This Part
sets out the various rules about court proceedings, such as the power of the
Commissioner to intervene in proceedings relating to matters arising under this
Act and the standard of proof which is required in proceedings under this Act.
The Part also provides defences to particular civil liability provisions,
specifies when civil proceedings are not to be stayed and provides for a certain
type of certificate to be evidence of a conviction for an offence or a
contravention of a provision of a law.
Clause 165 - Object of
Part
359. This clause sets out the object of the
Part.
Clause 166 - Power of Commissioner to intervene in
proceeding
360. This clause provides that the Commissioner may
intervene in any court proceeding relating to a matter arising under this Act.
If the Commissioner intervenes, the Commissioner becomes a party to the
proceedings and therefore gives the Commissioner standing in relation to the
proceedings [subclauses 166(1) and (2)]. In addition to those who
would usually be entitled to represent the Commissioner at a proceeding, the
Commissioner may be represented by a member of his staff, by a delegate or by a
solicitor or counsel [subclause 166(3)].
Clause 167 -
Civil proceeding not to be stayed
361. This clause provides
that any civil proceedings are not to be suspended only because the proceeding
discloses, or arises out of, the commission of an offence.
Clause
168 - Relief from civil liability for contravention of certain
provisions
362. This clause provides defences in relation to
proceedings under subclauses 73(1) and 75(2).
Clause 169 -
Evidence of contravention
363. This clause relates to a
certificate purported to be signed by the Registrar or other proper officer of
an Australian court stating that a person was convicted of an offence or that a
person was found to have committed an offence but was not convicted. This
clause provides that the certificate is conclusive evidence that the person was
convicted or that the person committed the offence but was not convicted.
Exceptions to the certificate being conclusive evidence of a person having been
convicted of an offence or having committed the offence without conviction are
where the conviction was quashed or set aside or the finding was set aside or
reversed.
Clause 170 - Vesting of property
364. This clause
relates to when property vests in a person under this Act. The property will
immediately vest in a person in both law and in equity where the court makes an
order under this Act vesting property in the person
[subclause 170(1)], with two exceptions. Where the transfer
or transmission of a kind of property may be registered under a law of the
Commonwealth, of a State or of a Territory, and that law enables the
registration of an order made by a court under this Act vesting property in a
person, the property will not vest in the person at law until the requirements
of the law of the Commonwealth, State or Territory in respect of the
registration of the property have been complied with [subclause
170(2)]. Where the transfer or transmission of a kind of property may
be registered under a law of the Commonwealth, of a State or of a Territory, and
that law enables the person named in the order made by a court under this Act
vesting property in the person to be registered as the owner of that property,
the property will not vest in the person at law until the requirements of the
law enabling the person named in the order to be registered as the owner of that
property have been complied with [subclause 170(3)].
PART 15 - EXEMPTIONS AND MODIFICATIONS
OUTLINE OF THE
PART
365. The purpose of this Part is to give the Commissioner power to
modify or exempt the application of specified provisions to an RSA provider or
class of RSA providers.
366. The modification and exemption powers
allow the RSA legislation to adapt to unexpected changes in legislative needs
and to allow the Commissioner to deal with specific industry problems in a
quick, flexible and efficient manner. These powers are also useful in modifying
the application of the RSA legislation to various parties, particularly if the
legislation has had unintended and/or potentially adverse
consequences.
367. In addition, RSAs are a new type of superannuation
product, and it is possible that this Act and its regulations may not adequately
provide for all the contingencies that may arise as the market for these
products develop. Therefore, the modification and exemption powers increase the
Commissioner’s ability to cater for unforseen commercial developments in
the RSA industry. This flexibility is particularly important to ensure the
regulatory framework remains responsive and relevant to the needs of a diverse,
complex and rapidly expanding superannuation industry.
368. It should be
noted that the Commissioner would exercise these powers only where he or she is
satisfied that, if the modification or exemption is made, the particular RSA
provider or class of RSA providers would still comply with the spirit of the
provisions concerned, or where the exercise of these powers will advance the
objects of this Act. In addition, the Commissioner would aim to incorporate any
changes made under his or her modification powers into the legislation as soon
as possible to provide for due Parliamentary process.
369. Parliament is
also to be given, on an annual basis, a report on the Commissioner’s use
of these modification and exemption powers, thereby allowing Parliament to
review the continued applicability and appropriateness of these
powers.
Clause 171 - Object of Part
370. This clause sets
out the object of the Part.
Clause 172 -
Interpretation
371. This clause defines the provisions of this Act
which are modifiable provisions. Only those provisions in this Act which have
an ‘equivalent’ modifiable provision in the Superannuation
Industry (Supervision) Act 1993 are modifiable under this Act. This ensures
that the modification powers given to the Commissioner under the RSA and SIS
legislation are identical, and will allow, where necessary, the relevant
provisions of each set of legislation to be modified concurrently.
372. Those provisions of this Act (and related regulations) that are
modifiable include those relating to operating standards, the disclosure of
information, unclaimed money, and the payment of benefits to eligible rollover
funds.
Clause 173 - Commissioner’s powers of exemption -
modifiable provisions
373. This clause provides that the Commissioner
may, in writing, exempt a particular RSA provider or class of RSA providers from
compliance with any or all of the modifiable provisions. This is necessary to
ameliorate unintended consequences in respect of the application of those
provisions.
Clause 174 - Commissioner’s powers of exemption -
general issues
374. This clause provides that an exemption under this
Part may be general or otherwise, conditional or unconditional, and may relate
to a particular RSA provider or class of RSA providers.
375. No time
limit applies to these exemptions, although a time limit may be specified as a
condition of such exemptions.
Clause 175 - Enforcement of conditions
to which exemption is subject
376. This clause provides that it is an
offence to contravene, without reasonable excuse, a condition of an exemption
under this Part. The Court may, on application of the Commissioner, order the
person to comply with the condition.
Clause 176 - Commissioner’s
powers of modification - modifiable provisions
377. This clause
provides that the Commissioner may, in writing, declare that a modifiable
provision is to have effect, in relation to a particular RSA provider or class
of RSA provider, as if it were modified as specified in the declaration. This
clause allows the RSA legislation to adapt to unexpected changes in legislative
needs and allows the Commissioner to deal with specific industry problems in a
quick, flexible and efficient manner.
Clause 177 -
Commissioner’s powers of modification - general issues
378. A
declaration under this Part may have effect either generally or otherwise, and
may relate to a particular RSA provider or class of RSA
providers.
379. No time limit applies to these modification declarations,
although a time limit may be specified as a condition of such
declarations.
Clause 178 - Revocation of exemptions and
modifications
380. This clause allows the Commissioner to revoke an
exemption or modification declaration. This power is necessary for a number of
reasons, such as when the modification declaration or exemption ceases to have
practical application or is no longer appropriate.
Clause 179 -
Publication of exemptions and modifications etc.
381. All exemption
and modification declarations, and the instruments revoking them, must be
published in the Gazette by the Commissioner.
PART 16 - MISCELLANEOUS
OUTLINE OF THE PART
382. The
purpose of this Part is to provide for the imposition of a number of
miscellaneous provisions relating to RSAs and the operation of the RSA Act and
regulations.
Clause 180 - Object of Part
383. This clause
sets out the object of the Part.
Clause 181 - Commissioner may direct
RSA institutions not to accept employer contributions
384. This
clause provides that the Commissioner may direct an RSA institution not to
accept any contributions made to RSAs by a specified employer and establishes
when and how such a direction must be given, and when such a direction may be
revoked. The main purpose of this clause is to provide a mechanism for
protecting moneys paid in lieu of the Superannuation Guarantee Charge by
allowing the Commissioner to stop money being contributed to RSAs where an RSA
institution is not maintaining the RSA in accordance with the requirements of
the Act or regulations. This may be an alternative mechanism used by the
Commissioner instead of, or prior to, suspension or revocation of the RSA
institution’s approval.
385. The prescribed regulatory agency, if
any, must be consulted before the Commissioner issues a written notice directing
an RSA institution not to accept any contributions made to RSAs by a specified
employer.
386. The agencies to be prescribed under this clause will be
the relevant prudential supervisors, and will be consulted to enable the
Commissioner to be appraised of any potential systemic consequences of issuing
such a direction. It will also clearly signal to the market that the issuing of
such a direction is not indicative of prudential failings, but only of the
institution’s internal compliance capabilities in respect of
RSAs.
387. The Commissioner is both the prudential and functional
regulator of life insurance companies and therefore technically cannot consult
with himself. As such, the Commissioner will only be required to consult when
issuing a direction where there is a relevant prescribed regulatory
agency.
388. A contravention of a direction under this section by the RSA
institution, without reasonable excuse, is an offence, however such a
contravention does not affect the validity of a transaction. A contribution
accepted by the RSA institution in contravention of this section must be
refunded within 28 days or such further period as the Commissioner allows
[subclause 181(6)].
389. It should be noted, however, that
some amounts given to the RSA institution will not be accepted as a contribution
but instead, the RSA institution will be required, under clause 60, to comply
with the requirements of the regulations in relation to how the money is to be
held and dealt with.
390. Upon receipt of a direction under this section
the RSA institution must take all reasonable steps to notify receipt of such a
direction to all employers specified in the direction to enable alternative
arrangements to be made for the contribution of Superannuation Guarantee moneys
[subclause 181(7)].
391. A contravention of subclauses (6)
or (7) without reasonable excuse is an offence.
392. Where a contribution
is refunded, the person making the contribution will be taken to have never made
the contribution for the purposes of the Income Tax Assessment Act 1936
and the Superannuation Guarantee (Administration) Act
1992.
393. The effect of this clause is that any Superannuation
Guarantee Charge shortfall component will be treated as employer contribution to
an RSA.
Clause 182 - RSA contributions - deductions from salary or
wages to be remitted promptly
394. This clause requires the prompt
remission by an employer of authorised deductions from the salary or wages of an
employee into the RSA held by the employee.
395. An intentional or
reckless contravention of this provision is an offence.
Clause 183 -
Compliance with determinations of the Superannuation Complaints
Tribunal
396. This clause provides that a person, other than an RSA
provider or insurer, who has responsibility for determining the existence and
extent of disablement for the purpose of providing temporary or permanent
disability benefits to an RSA holder, and who is joined to a disability
complaint under the Superannuation (Resolution of Complaints) Act 1993,
must comply with any determination made by the Superannuation Complaints
Tribunal in relation to that complaint.
Clause 184 - Conduct by
directors, servants and agents
397. This clause is intended to
overcome the difficulty of imputing intention to a corporation or individual and
of proving that conduct engaged in by a servant or agent was engaged in by the
corporation or individual.
398. The intention of the provision is to
widen the common law principles relating to agency. The provisions are intended
to be used when establishing the state of mind of a corporation or individual by
establishing that a servant or agent of the corporation or individual acting
within the scope of that persons actual or apparent authority had that state of
mind.
Clause 185 - Conviction does not relieve defendant from civil
liability
399. This clause provides that conviction of an offence
against the Act does not relieve a person from liability to any other
person.
Clause 186 - Liability for Damages
400. This clause
exempts the Commissioner, a member of the staff of the Commissioner, an
authorised person, an inspector or a person to whom the Commissioner or an
inspector has delegated a function or power under the Act, from liability for
acts or omissions done in good faith in the performance of powers or functions
conferred on those persons by the Act or the regulations.
Clause 187 -
Civil immunity where defendant was complying with this Act
401. This
clause provides for civil immunity in relation to acts done by a person
complying with the provisions of this Act or the regulations.
Clause
188 - Review of certain decisions
402. This clause provides for the
review by the Commissioner and/or the Administrative Appeals Tribunal of certain
decisions which may be made by the Commissioner (known as reviewable decisions
and defined in clause 16) to give effect to natural justice considerations.
Certain persons that are affected by a decision that is a reviewable decision
may, by written notice given to the Commissioner within a period of 21 days
after the date on which the person first receives notice of the decision, or
such longer period as the Commissioner allows, request the Commissioner to
reconsider the decision.
403. Where the Commissioner does not confirm,
revoke or vary a decision within 60 days after receipt of a request to
reconsider the decision, the decision is deemed to have been confirmed by the
Commissioner. Where the Commissioner confirms, revokes or varies a decision
before the expiration of 60 days after receipt of the request, the Commissioner
must inform the person of the reasons for confirming, revoking or varying the
decision, as the case may be.
404. Application may be made to the
Administrative Appeals Tribunal for a review of a decision that has been
confirmed or varied by the Commissioner.
Clause 189 - Statements to
accompany notification of decisions
405. This clause provides for
notification in certain circumstances of a person’s right of appeal,
including to the Commissioner and/or the Administrative Appeals Tribunal
(outlined in clause 188), where the person is affected by a reviewable decision
of the Commissioner.
Clause 190 - Secrecy
406. This clause
prohibits an RSA standards officers from disclosing, other than for the purposes
of the Act or any other Act administered by the Commissioner, protected
information or producing protected documents which have been acquired in the
course of performing duties as an RSA standards officer. Failure to comply with
this provision is an offence.
407. A number of exceptions to this are
provided including where the information is public contact or compliance
information, where it involves notifying the professional association of an
approved auditor for the purposes of subclause 67(1), where consent to the
disclosure has been obtained or the disclosure is to a specified person or
body.
408. The effect of this latter exception is to allow, for example,
an RSA standards officer to provide information or documents to a financial
sector supervisory agency to assist that agency in the efficient and effective
performance of its functions or powers. A similar exception is also provided to
allow the provision of information or documents between staff of the
Commissioner or to a law enforcement agency for a similar
purpose.
409. This clause also establishes an RSA standards
officer’s obligation in relation to the provision of protected information
or documents to a court.
Clause 191 - How information may be given to
the Commissioner of Taxation
410. This clause provides that
information required or authorised to be given by the Commissioner to the
Commissioner of Taxation under this Act can be conveyed by means of a data
processing device.
Clause 192 - Commissioner may collect statistical
information
411. This clause provides the Commissioner with the power
to collect statistical information in relation to RSAs and RSA providers and
sets out, among other things, requirements in relation to the survey forms,
notification of participation in the Insurance and Superannuation
Commission’s statistics program and the period for lodgement of the
surveys.
412. This clause also outlines the obligations of participants
in the ISC’s statistics program [subclause 192(5)] and
provides that an intentional or reckless contravention of this subclause is an
offence.
Clause 193 - Commissioner may publish statistical
information
413. This clause provides that the Commissioner may
publish statistical information collected in relation to RSAs, RSA providers or
the payment of benefits to persons. However, the clause ensures that such
information may not be published in such a way as to identify a particular RSA,
RSA provider or a person. The clause also provides that the Commissioner may
determine that fees are able to be paid in respect of the supply of such
publications.
Clause 194 - This Act and the regulations have effect
subject to the Crimes (Superannuation Benefits) Act 1989 and the
Australian Federal Police Act 1979
414. This clause provides
that the Act and regulations will apply to an RSA provider subject to any
superannuation order (within the meaning of the Crimes (Superannuation
Benefits) Act 1989 and the Australian Federal Police Act 1979) that
is made in relation to an RSA holder. This is to facilitate the possibility of
the recovery of superannuation moneys paid by the Commonwealth into
superannuation funds in respect of persons covered by those Acts and which are
later transferred into an RSA.
Clause 195 - Payment of an RSA in
accordance with the Bankruptcy Act 1966
415. This clause
provides that nothing in the Act or Regulations prevents an RSA provider from
paying to the trustee in bankruptcy an amount from the RSA that is property
divisible amongst the RSA holder’s creditors, within the meaning of
section 116 of the Bankruptcy Act 1966.
Clause 196
Concurrent operation of State/Territory laws
416. This clause
provides for the concurrent operation of State or Territory laws with this
Act.
Clause 197 - Delegation
417. This clause provides that
the Commissioner may delegate all his or her powers under the Act to a member of
his or her staff, other than the obligation imposed upon the Commissioner under
clause 198 to prepare and give to the Minister an annual
report.
Clause 198 - Annual reports
418. This clause
requires the Commissioner to prepare and give to the Minister within 3 months
after each year ending on 30 June a report on the working, during the year, of
the Act, including the exercise during the year of the Commissioner’s
powers under Part 15. The Minister has to cause a copy of the report to be laid
before each House of the Parliament within 15 sitting days after the day of
receipt of the report.
Clause 199 - Regulations
419. This
clause permits the Governor-General to make regulations not inconsistent with
the Act, in respect of matters required or permitted by the Act to be prescribed
or for the carrying out of or for giving effect to the Act. In particular,
regulations may be made in respect of the payment of fees, and the payment to
the Commonwealth of prescribed penalties not exceeding 10 penalty units in
respect of offences against the regulations.
420. This clause also allows
the regulations to make provision for and in relation to the Commissioner
keeping one or more registers (for example, a register of lost members). It is
intended that the regulations may make provision in regard to all aspects of a
register including matters relating to the establishment, operation and
termination of a register.
421. Specifically, the clause includes the
ability for the regulations to provide for registers relating to matters arising
under the Act or regulations to be kept in a form or manner directed by the
Commissioner, for persons to inspect such a register and obtain information
contained in the register (and for fees to be charged for an inspection or
provision of information).