Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS (AMENDMENT) 1996 NO.44

STATUTORY RULES 1996 No. 44

Issued by the authority of the Treasurer

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Regulations (Amendment)

The Superannuation Industry (Supervision) Act 1993 (the Act) and the Superannuation Industry (Supervision) Regulations (the Principal Regulations) provide for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by the Insurance and Superannuation Commissioner.

Section 353 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.

These regulations amend the Principal Regulations by exempting the trustees of the following types of funds from the requirement to prepare a statement of cash flows:

*       certain types of defined benefit funds;

*       funds in which the members' benefits are wholly determined by reference to life assurance policies; and

*       excluded funds (ie. superannuation funds with less than five members or approved deposit funds with only one beneficiary).

The purpose of this amendment is to implement the policy intent that these funds need not prepare cash flow statements. This is consistent with AAS 25 (the accounting standard applying to financial reporting by superannuation funds), where this requirement does not apply to these types of funds as it is seen as an unwarranted expense.

The regulations are described in detail in the attachment.

The regulations commence on gazettal.

ATTACHMENT

Superannuation Industry (Supervision) Regulations (Amendment)

Regulation 1 - Amendment

Regulation 1 provides that the Superannuation Industry (Supervision) Regulations (the Principal Regulations) are amended as set out in these Regulations. These Regulations will commence on gazettal.

Regulation 2 - New regulation 8.01A (Statement of cash flows)

Under paragraph 112(1)(ba) of the Superannuation Industry (Supervision) Act 1993 (the Act), trustees of all superannuation entities must prepare a statement of cash flows for each year of income. This provision was inserted into the Act in order to make the requirements of the Act broadly equivalent to those of AAS 25 (the accounting standard applying to financial reporting by superannuation funds) on this matter.

Consistent with AAS 25, this requirement was not intended to apply to certain types of defined benefit funds, excluded funds and funds in which the members' benefits are wholly determined by reference to life assurance policies as it is seen as an unwarranted expense.

Regulation 2 inserts a new regulation 8.01 A into the Principal Regulations that provides that the trustee of:

*       a defined benefit fund if the trustee prepares both a statement of net assets of the fund and a statement of changes in net assets of the fund;

*       a fund in which the members' benefits are wholly determined by reference to policies of life assurance; or

*       an excluded fund;

need not prepare a statement of cash flows in respect of the 1995/96 and all future years of income.