Commonwealth Numbered Regulations - Explanatory Statements
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SUPERANNUATION INDUSTRY (SUPERVISION) AMENDMENT REGULATIONS 2011 (NO. 4) (SLI NO 278 OF 2011)
Select Legislative Instrument 2011 No. 278
Issued by authority of the Assistant Treasurer
Superannuation Industry (Supervision) Act 1993
Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 4)
Retirement Savings Act 1997
Retirement Savings Accounts Amendment Regulations 2011 (No. 4)
The Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Retirement Savings Act 1997 (RSA Act) allow trustees of superannuation funds and retirement savings account (RSA) providers to use tax file numbers (TFNs) to locate amounts held for members within a fund and also to facilitate consolidation of amounts held for members.
Subsection 353(1) of the SIS Act provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the SIS Act to be prescribed, or necessary, or convenient to be prescribed for carrying out or giving effect to the SIS Act.
Subsection 200(1) of the RSA Act provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the RSA to be prescribed, or necessary, or convenient to be prescribed for carrying out or giving effect to the RSA Act.
The Taxation Laws Amendment (2011 Measures No. 2) Act 2011 (the Amendment Act) provides that trustees of superannuation entities and RSA providers may use TFNs to locate member accounts subject to any conditions set out in the regulations.
The purpose of the Regulations is to amend the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Regulations 1997 to include rules with which trustees of superannuation entities and RSA providers must comply with when using a member's TFN to locate accounts, and where they use TFNs in order to facilitate account consolidation.
The rules safeguard member information and privacy, as they restrict the use of individuals' TFNs to situations where consent has been provided, and will place appropriate limitations on the ability of trustees and RSA providers to search for member accounts.
The measure expanding the use of TFNs, which these Regulations support, is designed to increase the administrative efficiency of the superannuation industry. It improves fund administration by allowing trustees and RSA providers to locate member accounts quickly and easily, and take steps to facilitate account consolidation.
Details of the amendments to the SIS Regulations are set out in Attachment A and the RSA Regulations are set out in Attachment B.
The SIS Act and the RSA Act specify no conditions that need to be met before the power to make the regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations would commence on the commencement of Part 2 of Schedule 3 to the Amendment Act, which will be 1 January 2012.
The Stronger SuperStream Working Group, comprising superannuation, accounting and financial services industry representatives, was consulted in the development of the Regulations. Draft regulations and a draft explanatory statement were published on 22 November 2011 for comment.
A number of submissions sought clarity on the application of the rules specified in the regulations. These concerns were addressed by updating the explanatory statement.
Authority: Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993. Subsection 200(1) of the Retirement Savings Accounts Act 1997.
ATTACHMENT A
Details of the Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 4)
Regulation 1 specifies that the title of the Regulations is the Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 4).
Regulation 2 provides for the Regulations to commence on the commencement of Part 2 of Schedule 3 to the Tax Laws Amendment (2011 Measures No. 2) Act 2011.
Regulation 3 provides that Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations).
Schedule 1 - Amendments
Item 1
Item 1 inserts a new Division 6.8, including new regulations 6.47 to 6.50, after Division 6.7 specifying the rules that apply where a superannuation fund trustee uses a TFN to locate amounts held for a beneficiary, or to facilitate account consolidation.
Previously, TFNs could only be used by a superannuation entity or RSA provider to locate, in the fund's records, member accounts provided other methods are used first and only if the other methods were insufficient.
Subsection 299LA(2) of the Superannuation Industry (Supervision) Act 1993 provides that a trustee will have obtained sufficient consent to use the beneficiary's TFN to locate multiple amounts within the fund if the beneficiary has quoted their TFN for superannuation purposes to the superannuation entity.
This position for intra-fund searches will not change with the introduction of these regulations, however from 1 January 2012, superannuation fund trustees and RSA providers will be able to use TFNs to facilitate the consolidation of multiple accounts held by the same person in the same superannuation fund and multiple superannuation funds, provided the requirements of the regulations are met.
Regulation 6.47 sets out the definitions for Division 6.8, defining beneficiary, RSA provider or superannuation entity, and trustee.
Regulation 6.48 explains how the conditions for the use of TFNs are structured within the regulations.
Regulation 6.49 explains that a trustee must obtain consent to use the beneficiary's TFN, to seek superannuation information relating to the beneficiary from the ATO or to contact an RSA provider or superannuation entity to seek superannuation information relating to the beneficiary.
The term 'consent' that will be used in regulation 6.49 refers to consent provided by the beneficiary to the trustee of the superannuation entity to seek information from another RSA provider or superannuation entity.
This consent could include:
• consent provided in writing by the beneficiary
• consent provided over the phone by the beneficiary, where the beneficiary's identity has been confirmed through the superannuation entity's or proof of identity procedures
• consent provided through an online form or portal where the beneficiary has logged into their member account through a secure online website, or
• consent provided through a recorded instruction or interactive voice response function within a call centre.
Example 1
Sarah can provide one consent to the trustee of her superannuation entity which encompasses both the process of seeking info from the Australian Taxation Office (ATO) regarding member accounts, and should there be any accounts found, the original consent will also allow the trustee of her superannuation entity to seek information from those specific superannuation entities.
Example 2
In contrast, to Example 1, Sarah may be aware that she has super held for her with X Fund. She can provide consent to the trustee of her current superannuation entity for them to seek information from X Fund.
It is not intended that beneficiaries will be able to provide a general consent to the trustee of their superannuation entity to search for accounts with any superannuation entity or RSA provider.
Regulation 6.50 sets out the procedure that trustees must follow where they search for amounts held for the beneficiary by another RSA provider or superannuation entity. The trustee may seek information through a facility provided by the ATO or, contact an RSA provider or superannuation entity as nominated by the beneficiary.
As the search carried out by the trustee of the superannuation entity is being undertaken at the request of the beneficiary, the trustee is acting as the agent of the beneficiary. Thus, the superannuation fund or RSA provider of whom the information is requested is required to respond to the trustee's request and provide details of any accounts held for the beneficiary.
ATTACHMENT B
Details of the Retirement
Savings Accounts Amendment Regulations
2011 (No. 4)
Regulation 1 specifies that the title of the Regulations is the Retirement Savings Accounts Amendment Regulations 2011 (No. 4).
Regulation 2 provides for the Regulations to commence on the commencement of Part 2 of Schedule 3 to the Tax Laws Amendment (2011 Measures No. 2) Act 2011.
Regulation 3 provides that Schedule 1 amends the Retirement Savings Accounts Regulations 1997 (RSA Regulations).
Schedule 1 - Amendments
Item 1
Item 1 inserts a new Division 4.6, including new regulations 4.44 to 4.47, after Division 4.5 specifying the rules that apply where an RSA provider uses a TFN to locate amounts held for an RSA holder, or to facilitate account consolidation.
Previously, TFNs could only be used by an RSA provider to locate, in the fund's records, member accounts provided other methods are used first and only if the other methods were insufficient.
Subsection 137A(2) of the Retirements Savings Accounts Act 1997 provides that an RSA holder will have obtained sufficient consent to use the RSA holder's TFN to locate multiple amounts within the fund if the RSA holder has quoted their TFN for superannuation purposes to the RSA provider.
This position for intra-fund searches will not change with the introduction of these regulations, however from 1 January 2012, RSA providers will be able to use TFNs to facilitate the consolidation of multiple accounts held by the same person in the same superannuation fund and multiple superannuation funds, provided the requirements of the regulations are met.
Regulation 4.44 sets out the definitions, for Division 4.6, defining RSA holder and RSA provider or superannuation entity.
Regulation 4.45 explains how the conditions for the use of TFNs are structured within the regulations.
Regulation 4.46 explains that an RSA provider must obtain consent of the RSA holder to use their TFN to seek superannuation information relating to the RSA holder from the ATO or to contact an RSA provider or superannuation entity to seek superannuation information relating to the RSA holder.
The term 'consent' that will be used in regulation 4.46 refers to consent provided by the RSA holder to the RSA provider to seek information from another RSA provider or superannuation entity.
This consent could include:
• consent provided in writing by the RSA holder
• consent provided over the phone by the RSA holder, where the RSA holder's identity has been confirmed through the RSA provider's proof of identity procedures
• consent provided through an online form or portal where the RSA holder has logged into their member account through a secure online website, or
• consent provided through a recorded instruction or interactive voice response function within a call centre.
Example 1
Sarah can provide one consent to her RSA provider which encompasses both the process of seeking info from the Australian Taxation Office (ATO) regarding member accounts, and should there be any accounts found, the original consent will also allow the RSA provider to seek information from those specific superannuation entities or RSA providers.
Example 2
In contrast, to Example 1, Sarah may be aware that she has super held for her with X Fund. She can provide consent to her current RSA provider for them to seek information from X Fund.
It is not intended that RSA holders will be able to provide a general consent to their RSA provider to search for accounts with any superannuation entity or RSA provider.
Regulation 4.47 sets out the procedure that RSA providers must follow where they search for amounts held for the RSA holder by another RSA provider or superannuation entity. The RSA provider may seek information through a facility provided by the ATO or, contact an RSA provider or superannuation entity as nominated by the RSA holder.
As the search carried out by the RSA provider is being undertaken at the request of the RSA holder, the RSA provider is acting as the agent of the RSA holder. Thus, the superannuation fund or RSA provider of whom the information is requested is required to respond to the RSA provider's request and provide details of any accounts held for the RSA holder.
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