Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - SCHEDULE 10D

Form and content of Product Disclosure Statement--superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies

(regulation 7.9.11O)

   

1   Length and font size for Product Disclosure Statement for superannuation product

             (1)  The length of a Product Disclosure Statement for a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies (not including any matter in writing that is applied, adopted or incorporated by the Statement) must not exceed:

                     (a)  if it is printed on A4 pages--8 pages; or

                     (b)  if it is printed on A5 pages--16 pages; or

                     (c)  if it is printed on DL pages--24 pages; or

                     (d)  otherwise--if it is formatted to be printed on A4 pages, 8 A4 pages.

             (2)  The minimum font size for text in the Statement is:

                     (a)  for the name, address, ABN (if applicable), ACN (if applicable) and AFSL (if applicable) of the person giving the Statement--8 points; and

                     (b)  for all other text--9 points.

Note 1:       The Product Disclosure Statement must be worded and presented in a clear, concise and effective manner--see subsection 1013C (3) of the Act.

Note 2:       A person required to a give a Product Disclosure Statement to a vision-impaired person must comply with its obligations under the Disability Discrimination Act 1992 .

2   Minimum content of Product Disclosure Statement for superannuation product

             (1)  Subject to subclause 10(1), the Product Disclosure Statement must include sections which must be numbered and titled as follows:

                       1.  About [name of superannuation product]

                       2.  How super works

                       3.  Benefits of investing with [name of superannuation product]

                       4.  Risks of super

                       5.  How we invest your money

                       6.  Fees and costs

                       7.  How super is taxed

                       8.  Insurance in your super

                       9.  How to open an account.

             (2)  However, if the superannuation product does not offer insurance cover:

                     (a)  section 9 may be presented as section 8; and

                     (b)  if section 9 is presented as section 8--a reference in clause 11 to section 9 is taken to be a reference to section 8.

             (3)  The Product Disclosure Statement must include:

                     (a)  a table of contents that sets out the titles mentioned in subclause (1); and

                     (b)  the telephone number of the superannuation trustee to enable a person who acquires the superannuation product to request a copy of the following under regulation 7.9.11R:

                              (i)  a copy of the Statement; and

                             (ii)  a copy of a matter in writing that is applied, adopted or incorporated by the Statement.

             (4)  The Product Disclosure Statement must:

                     (a)  advise a person reading the Statement that:

                              (i)  it is a summary of significant information and contains a number of references to important information (each of which forms part of the Statement); and

                             (ii)  the person should consider that information before making a decision about the product; and

                            (iii)  the information provided in the Statement is general information only and does not take account of the person's personal financial situation or needs; and

                            (iv)  the person should obtain financial advice tailored to the person's personal circumstances; and

                     (b)  display the advice:

                              (i)  at or near the beginning of the document; and

                             (ii)  in a prominent position and style.

             (5)  The Product Disclosure Statement:

                     (a)  may include additional sections after sections 1 to 9; and

                     (b)  may include other information;

to an extent that does not have the effect of contravening subclause 1(1).

             (6)  The Product Disclosure Statement does not need to indicate that a particular requirement is not applicable to the superannuation product.

Note:          The Act, as modified in accordance with Subdivision 4.2B of Division 4 of Part 7.9, requires information to be included in the Product Disclosure Statement only to the extent to which the requirement is applicable to the superannuation product.

3   Contents of section 1 (About [name of superannuation product] )

             (1)  Section 1 of the Product Disclosure Statement must:

                     (a)  describe, in the form of a summary, the superannuation entity and the MySuper products and other investment options offered by the entity; and

                     (b)  include a statement of where, on the entity's website, the member can find:

                              (i)  the product dashboard for each MySuper product and choice product in the entity; and

                             (ii)  each trustee and executive remuneration disclosure for the entity, and any other document that must be disclosed for the entity under the SIS Regulations ; and

                     (c)  a statement describing the entity's process for transitioning each member whose interest includes an accrued default amount from an existing default option to a MySuper product by 1 July 2017.

             (2)  Paragraph (1)(c) applies until the earlier of:

                     (a)  1 July 2017; and

                     (b)  the day on which the entity has attributed each accrued default amount in the entity to a MySuper product.

Note:          Putting the information mentioned in paragraph (1)(b) onto the superannuation fund's website does not amount to adding the information to the Product Disclosure Statement.

4   Contents of section 2 (How super works)

             (1)  Section 2 of the Product Disclosure Statement must include statements to the effect that:

                     (a)  superannuation is a means of saving for retirement which is, in part, compulsory; and

                     (b)  there are different types of contributions available to a person (for example, employer contributions, voluntary contributions, government co-contributions); and

                     (c)  there are limitations on contributions to, and withdrawals from, superannuation; and

                     (d)  tax savings are provided by the Government; and

                     (e)  most people have the right to choose into which superannuation entity the employer should direct their superannuation guarantee contributions.

             (2)  The superannuation trustee may provide more detailed information on the matters set out in subclause (1) by:

                     (a)  applying, adopting or incorporating a matter in writing; or

                     (b)  providing a reference to a website, operated by or on behalf of the Commonwealth, that contains the information.

5   Contents of section 3 (Benefits of investing with [name of superannuation product])

             (1)  Section 3 of the Product Disclosure Statement must describe the superannuation product covered by the Statement, including a summary of its significant features and the benefits it provides.

             (2)  The superannuation trustee may provide additional information about significant benefits of superannuation or other significant features of the superannuation product by applying, adopting or incorporating a matter in writing.

6   Contents of section 4 (Risks of super)

             (1)  Section 4 of the Product Disclosure Statement must include statements to the following effect:

                     (a)  all investments carry risk;

                     (b)  different strategies may carry different levels of risk, depending on the assets that make up the strategy;

                     (c)  assets with the highest long-term returns may also carry the highest level of short-term risk.

             (2)  Section 4 must describe, in the form of a summary, the significant risks of the particular superannuation product.

             (3)  Section 4 must describe the significant risks of superannuation (to the extent only that the description required by subitem (2) has not already described the risk) by including statements to the following effect:

                     (a)  the value of investments will vary;

                     (b)  the level of returns will vary, and future returns may differ from past returns;

                     (c)  returns are not guaranteed, and persons may lose some of their money;

                     (d)  superannuation laws may change in the future;

                     (e)  the amount of a person's future superannuation savings (including contributions and returns) may not be enough to provide adequately for the person's retirement;

                      (f)  the level of risk for each person will vary depending on a range of factors, including:

                              (i)  age; and

                             (ii)  investment time frames; and

                            (iii)  where other parts of the person's wealth are invested; and

                            (iv)  the person's risk tolerance.

             (4)  The superannuation trustee may provide additional information about significant risks of superannuation by applying, adopting or incorporating a matter in writing.

7   Contents of section 5 (How we invest your money)

             (1)  Section 5 of the Product Disclosure Statement must describe, in the form of a summary:

                     (a)  the MySuper products and investment options being offered; and

                     (b)  what happens if the person does not make a choice of where to invest.

             (2)  Section 5 must state, in the form of a warning, that the person must consider:

                     (a)  the likely investment return; and

                     (b)  the risk; and

                     (c)  the person's investment timeframe;

when choosing a MySuper product or an investment option in which to invest.

             (3)  For at least one MySuper product or investment option, section 5 must:

                     (a)  state the name of the MySuper product or investment option and give a short description of it, including the type of investors for whom it is intended to be suitable; and

                     (b)  list the asset classes in which the MySuper product or investment option invests, and set out, in the form of a range or otherwise, the strategic asset allocation of the asset classes; and

                     (c)  describe the investment return objective of the MySuper product or investment option; and

                     (d)  state the minimum suggested time frame for holding the MySuper product or investment option; and

                     (e)  describe, in the form of a summary, the risk level of the MySuper product or investment option.

             (4)  If the superannuation product includes a generic MySuper product, section 5 must give the information mentioned in subclause (3) for the generic MySuper product, whether or not section 5 gives that information for another MySuper product or investment option.

             (5)  If the superannuation product does not include a generic MySuper product, and has a balanced investment option (within the meaning given by clause 101 of Schedule 10), section 5 must give the information mentioned in subclause (3) for the balanced investment option under which most assets of the superannuation entity are invested, whether or not section 5 gives that information for any MySuper product or other investment option.

             (6)  If the superannuation product does not include a generic MySuper product or a balanced investment option (within the meaning given by clause 101 of Schedule 10), section 5 must give the information mentioned in subclause (3) for the investment option under which most assets of the superannuation entity are invested, whether or not section 5 gives that information for any MySuper product or other investment option.

             (8)  Section 5:

                     (a)  must make provision for each MySuper product and investment option which is not presented in section 5 in accordance with subclause (3), (4), (5) or (6); and

                     (b)  may make provision for the MySuper product or investment option by applying, adopting or incorporating matter in a document that:

                              (i)  includes the information mentioned in subclause (3); and

                             (ii)  presents it in the way mentioned in the subclause.

             (9)  The superannuation trustee:

                     (a)  must provide information about how a person may switch the person's investments; and

                     (b)  whether the superannuation product's MySuper products and investment options may be changed and, if so, how; and

                     (c)  must describe, in the form of a summary, the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of investments relating to the superannuation product; and

                     (d)  may provide the information in paragraphs (a) to (c), and any additional information about MySuper products or investment options, by applying, adopting or incorporating a matter in writing.

8   Contents of section 6 (Fees and costs)

             (1)  For each MySuper product or investment option within a superannuation product that is presented in section 5 in detail in accordance with subclause 7(3), section 6 of the Product Disclosure Statement must state:

                     (a)  the cost of acquiring the MySuper product or investment option; and

                     (b)  the fees and costs that are charged in relation to the MySuper product or investment option.

Note:          The statement will be made using the template set out in subclause (3).

             (2)  Before setting out any other substantive material, section 6 must:

                     (a)  set out the Consumer Advisory Warning in clause 221 of Schedule 10 ; and

                     (b)  give a concise example in the form set out in the Consumer Advisory Warning in clause 221 of Schedule 10.

             (3)  Section 6 must set out the fees and costs for each MySuper product or other investment option that is presented in section 5 in detail in accordance with subclause 7(3), using the following templates:

 

[Name of superannuation product]

Type of fee

Amount

How and when paid

Investment fee

 

 

Administration fee

 

 

Buy-sell spread

 

 

Switching fee

 

 

Exit fee

 

 

Advice fees

relating to all members investing in a particular MySuper product or investment option

 

 

Other fees and costsĀ¹

 

 

Indirect cost ratio

 

 

1.             [If there are other fees and costs, such as activity fees, advice fees for personal advice or insurance fees, include a cross-reference to the "Additional Explanation of Fees and Costs".]

             (4)  The template is to be completed in accordance with Division 3 of Schedule 10 (including definitions applicable to that Division), except that:

                     (a)  clauses 203, 205, 206 and 207 and subclause 208(2) do not apply; and

                     (b)  the reference in clause 204 to clause 205 and clause 206 does not apply; and

                     (c)  the example in subclause 208(1) is to be treated as stating:

                            "(for example, by using an asterisk with a footnote stating 'The amount of this fee can be negotiated')".

             (5)  Section 6 must set out the information about fee changes set out in paragraph 209(k) of Schedule 10.

             (6)  Section 6 must:

                     (a)  state that the information in the template can be used to compare costs between different superannuation products; and

                     (b)  state concisely, and in general terms, that fees and costs can be paid directly from the person's account or deducted from investment returns.

          (6A)  Section 6 must:

                     (a)  apply, adopt or incorporate the definitions in relation to fees mentioned in section 29V of the SIS Act; and

                     (b)  include the address of a link to the definitions maintained on a website.

             (7)  Section 6 must give a worked example for each MySuper product or investment option described in section 5.

          (7A)  The example given must be in accordance with Divisions 5 and 6 of Schedule 10 (including the definitions applicable to those Divisions).

             (8)  Section 6:

                     (a)  must refer to the calculator provided by ASIC on its FIDO website or a similar website operated by or on behalf of ASIC; and

                     (b)  may also refer to the calculator (if any) provided by the superannuation trustee on its website; and

                     (c)  must state that each calculator referred to can be used to calculate the effect of fees and costs on account balances.

             (9)  If additional fees may be payable to a financial advisor, section 6 must:

                     (a)  state, in the form of a warning, that additional fees may be paid to a financial advisor if a financial advisor is consulted; and

                     (b)  refer to the Statement of Advice in which details of the fees are set out; and

                     (c)  if applicable:

                              (i)  state that fees may be paid to the employer entity's financial adviser; and

                             (ii)  explain how the fees are determined.

           (10)  The superannuation trustee:

                     (a)  must provide the fees and costs of each of the MySuper products and investment options in accordance with Schedule 10, and may do so by applying, adopting or incorporating a matter in writing; and

                     (b)  may provide more detailed information about fees and costs by applying, adopting or incorporating a matter in writing.

9   Contents of section 7 (How super is taxed)

             (1)  Section 7 of the Product Disclosure Statement must describe, in the form of a summary, the significant tax information relating to superannuation products, including:

                     (a)  how tax amounts due are paid; and

                     (b)  the main taxes that are payable in relation to contributions (if contributions are permitted), fund earnings and withdrawals.

             (2)  Section 7 must:

                     (a)  state, in the form of a warning, that the person should provide the person's tax file number as part of acquiring the superannuation product; and

                     (b)  explain, in the form of a summary, the consequences if the person does not provide the person's tax file number; and

                     (c)  if contributions are permitted--set out a warning that there will be taxation consequences if the contribution caps applicable to superannuation are exceeded.

             (3)  The superannuation trustee may provide additional information about taxation matters relating to superannuation products by applying, adopting or incorporating a matter in writing.

10   Contents of section 8 (Insurance in your super)

             (1)  If the superannuation product does not offer insurance cover, the Product Disclosure Statement is not required to include any of the information in this clause.

             (2)  If the superannuation product offers insurance cover, section 8 must:

                     (a)  describe, in the form of a summary, the main types of insurance cover that a person can acquire; and

                     (b)  describe, in the form of a summary, how to apply for insurance cover; and

                     (c)  include a statement to the effect that there are costs associated with insurance cover; and

                     (d)  describe, in the form of a summary, who is responsible for paying the insurance costs and how they are calculated.

             (3)  If the superannuation product offers insurance cover by default, section 8 must:

                     (a)  describe, in the form of a summary, the level and type of cover; and

                     (b)  state:

                              (i)  the actual cost of the cover in dollars, or the range of costs that would be payable depending on a person's circumstances; and

                             (ii)  who is responsible for paying the costs; and

                     (c)  state whether a person can:

                              (i)  decline to acquire the cover; or

                             (ii)  cancel the cover; and

                     (d)  state how a person can decline to acquire the cover or cancel the cover; and

                     (e)  state whether a person can change the person's insurance cover; and

                      (f)  state how a person can change the person's insurance cover; and

                     (g)  state, in the form of a warning, that, unless a person declines to acquire the default insurance cover or cancels it, the cost of the cover will be deducted from the person's account or from the person's contributions (as applicable); and

                     (h)  include information about eligibility for, and the cancellation of, the insurance cover; and

                      (i)  include information about any conditions and exclusions that are applicable to the insurance cover.

             (4)  If the superannuation product does not offer insurance cover by default but offers insurance cover as an option, section 8 must include the following information:

                     (a)  the level and type of insurance cover available;

                     (b)  the actual cost of the cover in dollars, or the range of costs that would be payable depending on a person's circumstances;

                     (c)  eligibility for, and the cancellation of, the insurance cover;

                     (d)  any conditions and exclusions that are applicable to the insurance cover;

                     (e)  any other significant matter in relation to insurance cover.

Examples for paragraph (e):

1                 Information about how a person can apply for the insurance cover.

2                 Information about how a person can subsequently change or cancel the insurance cover.

             (5)  The superannuation trustee:

                     (a)  may provide the information in paragraphs (3)(h) and (i) and subclause (4); and

                     (b)  may provide additional information about insurance cover;

by applying, adopting or incorporating a matter in writing.

             (6)  If information about:

                     (a)  eligibility for, or the cancellation of, the insurance cover; or

                     (b)  any conditions and exclusions that are applicable to the insurance cover;

is provided for in accordance with subclause (5), section 8 must include a warning to the effect that the matter may affect a person's entitlement to insurance cover and that the information should be read before deciding whether the insurance is appropriate.

             (7)  If information about:

                     (a)  the level and type of optional insurance cover available; or

                     (b)  the actual cost of the optional insurance cover in dollars, or the range of costs that would be payable depending on a person's circumstances; or

                     (c)  any other significant matter in relation to insurance cover;

is provided for in accordance with subclause (5), section 8 must include a warning to the effect that the information should be read before deciding whether the insurance is appropriate.

11   Contents of section 9 (How to open an account)

             (1)  Section 9 of the Product Disclosure Statement must, if applicable:

                     (a)  describe, in the form of a summary, how to open an account with the superannuation provider; and

                     (b)  explain the cooling-off period that applies to the superannuation product; and

                     (c)  explain how to make a complaint (by means that include the provision of relevant contact details).

Note:          The effect of subclause 10(1) is that the Product Disclosure Statement is not required to include section 8 (as set out in clause 10) if the superannuation product does not offer insurance cover. In that case, subclause 2(2) allows the Statement to present the information in this clause as "section 8" or "section 9".

             (2)  The superannuation trustee:

                     (a)  may provide more detailed information about cooling-off periods, complaints and dispute resolution; and

                     (b)  may provide that information by applying, adopting or incorporating a matter in writing.



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