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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Superannuation Administration Amendment
(Investment Management and Other Matters)
Bill 2015
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
This Bill is cognate with the Treasury Corporation Amendment Bill 2015.
Overview of Bill
The object of this Bill is to amend the Superannuation Administration Act 1996 to make provision
with respect to the investment management of the public sector superannuation schemes under
that Act (STC funds or STC schemes) and the fiduciary and other obligations and powers of the
SAS Trustee Corporation (STC), which administers those schemes.
The amendments made by this Bill:
(a) authorise the Treasurer to require STC to appoint an investment manager approved by the
Treasurer (a mandated investment manager) to provide investment management services
in relation to an STC fund subject to any terms and conditions determined by the Treasurer
and consistently with STC's investment strategies, reserves strategy and custodial policies
for the STC fund, and
(b) clarify that a mandated or other investment manager appointed by STC may engage other
investment managers to provide the relevant investment management services, and
(c) enable the Minister to declare prudential standards, or reporting and auditing requirements,
and to require STC to comply with them, and
(d) enable, at the request of STC, the transfer of accumulation-style components of benefits
under a STC scheme to a successor fund.
b2014-140.d22
Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Explanatory note
Outline of provisions
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on a day or days to be appointed
by proclamation.
Schedule 1 Amendment of Superannuation Administration
Act 1996 No 39
Schedule 1 [1] inserts definitions of terms used in the other proposed amendments. The proposed
amendment transfers, from section 59 to the general definition section, the definition of
superannuation investment management services and expands the definition to include
providing services in relation to the custody of the assets and securities of a superannuation fund.
Schedule 1 [3], [4], [6] and [11] make consequential amendments on the extension of that
definition.
Schedule 1 [2] requires STC to have regard to the role of employers under STC schemes in
funding benefits under those schemes when exercising its functions.
Schedule 1 [5] ensures that an investment manager appointed by STC to carry out the function of
providing superannuation investment management services on behalf of STC may engage another
investment manager to provide those services.
Schedule 1 [7] enables the Minister to waive the obligation to obtain the Minister's consent to a
contract or arrangement for the appointment of an investment or scheme administration manager.
Schedule 1 [9] requires STC to ensure that any investment manager providing superannuation
investment management services on its behalf complies with the investment strategy determined
by STC for the fund concerned.
Schedule 1 [10] requires an investment manager who carries out all superannuation investment
management services for a superannuation fund of STC to engage a separate person to undertake
services relating to the custody of assets and securities.
Schedule 1 [13] inserts proposed section 60 to enable the Treasurer, by order given to STC, to
require the investment of the whole or any part of the STC funds to be managed by one or more
investment managers approved by the Treasurer (a mandated investment manager). The order of
the Treasurer may be given only with the approval of the Minister administering the principal Act.
A mandated investment manager may, subject to any terms and conditions set out or described in
the order and any investment or reserves strategy or custodial policy determined by STC, invest
the STC funds concerned in any investment that is authorised or permitted by the principal Act or
any other applicable legislation.
Under the proposed section, the terms and conditions that may be set out or described in the order,
may, for example, relate to any or all of the following matters:
(a) the kind and extent of superannuation investment management services to be provided,
(b) the period during which the STC funds are to be managed by the mandated investment
manager,
(c) the engagement by the mandated investment manager of a person to provide custodial
services and the kind and extent of such custodial services,
(d) the circumstances in which the contract or arrangement may be varied or terminated.
The proposed amendment also provides that STC is taken to have discharged the obligations and
duties imposed on it in relation to the investment and management of the relevant STC funds, if a
mandated investment manager provides superannuation investment management services in
respect of the relevant STC funds on behalf of STC, or engages another person to provide them,
under a contract or arrangement entered into by STC in accordance with section 59.
Schedule 1 [6] and [12] make consequential amendments.
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Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Explanatory note
Schedule 1 [14] omits provisions relating to services for the custody of the assets and securities
of an STC scheme as a result of the extension of the meaning of "superannuation investment
management services" to cover such custodial services.
Schedule 1 [15] enables STC to request, and the Minister to approve, the transfer of part of the
benefits of all or some members of an STC fund to a successor superannuation fund. Any
successor fund must provide for the maintenance of existing rights of persons whose benefits are
transferred and the transfer and successor fund must comply with Commonwealth legislation
regulating such transfers. Any part of benefits that are transferred cannot consist of defined benefit
interests.
Schedule 1 [16] enables the Minister, by order published in the Gazette, to declare that specified
prudential standards, or reporting or auditing requirements, apply to STC (and those engaged by
STC) in the exercise of the principal functions of STC specified in the order. Schedule 1 [8] makes
a consequential amendment.
Schedule 1 [17] provides for the making of savings and transitional regulations consequent on the
enactment of any Act that amends the Superannuation Administration Act 1996.
Page 3
First print
New South Wales
Superannuation Administration Amendment
(Investment Management and Other Matters)
Bill 2015
Contents
Page
1 Name of Act 2
2 Commencement 2
Schedule 1 Amendment of Superannuation Administration Act 1996 No 39 3
b2014-140.d22
New South Wales
Superannuation Administration Amendment
(Investment Management and Other Matters)
Bill 2015
No , 2015
A Bill for
An Act to amend the Superannuation Administration Act 1996 in relation to the investment
management of superannuation funds, and to other matters.
Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
The Legislature of New South Wales enacts: 1
1 Name of Act 2
This Act is the Superannuation Administration Amendment (Investment 3
Management and Other Matters) Act 2015. 4
2 Commencement 5
This Act commences on a day or days to be appointed by proclamation. 6
Page 2
Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Schedule 1 Amendment of Superannuation Administration Act 1996 No 39
Schedule 1 Amendment of Superannuation Administration 1
Act 1996 No 39 2
[1] Section 4 Definitions 3
Insert in alphabetical order: 4
investment manager means a person who provides superannuation investment 5
management services for a superannuation fund or funds or part of any such 6
fund under a contract or an arrangement with STC, and includes any other 7
person engaged by that person to provide all or any of those superannuation 8
investment management services. 9
mandated investment manager--see section 60. 10
superannuation investment management services include (but are not limited 11
to) the following: 12
(a) managing investments for any superannuation fund or funds or part of 13
any such fund, 14
(b) advising on investments and investment strategies and other related 15
strategies for any superannuation fund or funds or part of any such fund, 16
(c) providing services in relation to the custody of the assets and securities 17
of any superannuation fund or funds or part of any such fund. 18
[2] Section 51 Duties relating to functions 19
Insert at the end of section 51 (2) (d): 20
, and 21
(e) the role of employers under STC schemes in funding benefits under 22
those schemes. 23
[3] Section 53 Power to enter into contracts or arrangements 24
Insert "all or any" before "superannuation investment management services" in 25
section 53 (1) (a). 26
[4] Section 53 (1) (c) 27
Omit the paragraph. 28
[5] Section 53 (1A) 29
Insert after section 53 (1): 30
(1A) An investment manager who enters into a contract or arrangement with STC 31
to provide superannuation investment management services may (subject to 32
the terms of that contract or arrangement) engage another investment manager 33
to provide any such service. In that case, a reference in this section to the 34
person who enters into or makes the contract or arrangement with STC 35
includes a reference to any such other investment manager engaged to provide 36
the service. 37
[6] Section 54 Minister's consent required 38
Omit "section 53 (1) (a), (b) or (c)". 39
Insert instead "section 53 (1) (a) or (b) with a person other than a mandated investment 40
manager". 41
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Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Schedule 1 Amendment of Superannuation Administration Act 1996 No 39
[7] Section 54 (2) 1
Insert at the end of section 54: 2
(2) The Minister may, by notice in writing given to STC, waive the requirement 3
for consent generally or in such circumstances as may be specified by the 4
Minister. 5
[8] Section 58 Investment strategy 6
Insert ", subject to this Part and section 129A," after "STC must" in section 58 (1). 7
[9] Section 59 Investment manager to be appointed 8
Omit section 59 (2). Insert instead: 9
(2) STC must ensure that any such investment manager (and others the investment 10
manager engages to provide the relevant services) operates within the 11
investment powers of STC and complies with the investment strategy 12
determined by STC and notified to the investment manager. 13
[10] Section 59 (3A) 14
Insert after section 59 (3): 15
(3A) A contract or arrangement under which an investment manager undertakes to 16
provide all superannuation investment management services for a 17
superannuation fund or part of a fund is to make provision for the engagement 18
of a separate person to provide services in relation to the custody of assets and 19
securities. 20
[11] Section 59 (5) 21
Omit the subsection. 22
[12] Section 59, note 23
Omit the note. Insert instead: 24
Note. The Minister's consent is required to any such contract or arrangement that is 25
entered into with a person other than a mandated investment manager unless that 26
requirement is waived (see section 54). 27
[13] Section 60 28
Insert after section 59: 29
60 Mandated investment managers 30
(1) The Treasurer may, with the approval of the Minister, by order in writing 31
given to STC, require: 32
(a) the investment of the whole or any part of the STC funds to be managed 33
by one or more investment managers approved by the Treasurer 34
(a mandated investment manager), and 35
(b) STC to enter into a contract or arrangement referred to in section 59 36
with any such mandated investment manager with respect to 37
superannuation investment management services for the whole or that 38
part of the STC funds subject to the terms and conditions set out or 39
described in the order. 40
(2) Subsection (1) does not prevent STC from entering into a contract or 41
arrangement containing additional terms or conditions that are not inconsistent 42
with the terms and conditions set out or described in the order. 43
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Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Schedule 1 Amendment of Superannuation Administration Act 1996 No 39
(3) The Treasurer must consult with STC and the proposed mandated investment 1
manager before giving an order under this section. 2
(4) A mandated investment manager (or an investment manager engaged by a 3
mandated investment manager to provide relevant services): 4
(a) may invest the whole or part of the STC funds concerned only in any 5
investment that is authorised or permitted by this Act or any other 6
applicable legislation, and 7
(b) must carry out the superannuation investment management services 8
concerned subject to the applicable terms and conditions and 9
consistently with any relevant investment strategy or policy. 10
(5) STC is taken to have discharged the obligations and duties imposed on it under 11
this and any other law (written or unwritten) in relation to the investment and 12
management of the whole or part of the STC funds, if a mandated investment 13
manager (or an investment manager engaged by a mandated investment 14
manager) provides superannuation investment management services in 15
respect of the STC funds or part of the STC funds on behalf of STC in 16
accordance with subsection (4). 17
Note. Under section 69 (6) any act, matter or thing done in the name of, or on behalf 18
of, STC by the STC Board is taken to have been done by STC. Section 80 protects 19
persons such as the chief executive officer (who is subject to the control and direction 20
of the Board) from personal and other liability. 21
(6) An order under this section takes effect on the day specified in the order. 22
(7) In this section: 23
relevant investment strategy or policy, in relation to the whole or any part of 24
the STC funds, means an investment strategy or reserves strategy determined 25
by STC under section 58, or custodial policy determined by STC under this 26
Act, in relation to the whole or that part of the STC funds. 27
[14] Section 61 Custodian to be appointed 28
Omit the section. 29
[15] Section 127A 30
Insert after section 127: 31
127A Transfers to successor funds 32
(1) The Minister may, at the request of STC, approve the transfer of part of the 33
benefits of all or some members of an STC scheme to a successor fund. 34
(2) The Minister must not approve the transfer of a part of the benefit of a member 35
of an STC scheme if that part consists of or includes a defined benefit interest 36
within the meaning of the Superannuation Industry (Supervision) Regulations 37
1994 of the Commonwealth. 38
(3) The Minister must not approve a transfer unless the Minister is satisfied that 39
the transfer complies with the requirements of the Superannuation Industry 40
(Supervision) Act 1993 of the Commonwealth and any regulations or other 41
instruments under that Act that would apply to the transfer to a successor fund 42
if the STC scheme was not an exempt public sector superannuation scheme 43
under that Act. 44
(4) Without limiting subsection (3), the trust deed of any successor fund must 45
include provisions to ensure that a right that a contributor to, or a member of, 46
the STC scheme had immediately before the transfer to the successor fund is 47
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Superannuation Administration Amendment (Investment Management and Other Matters) Bill 2015 [NSW]
Schedule 1 Amendment of Superannuation Administration Act 1996 No 39
not removed or restricted. The rules included in the deed may, however, confer 1
additional rights on a contributor or member. 2
(5) Regulations may be made for or with respect to the following matters, in 3
relation to a transfer to a successor fund: 4
(a) the transfer of benefits of members of, or contributors to, an STC 5
scheme from that scheme to the successor fund, 6
(b) the transfer of assets and liabilities of an STC scheme, in respect of 7
transferred benefits of members or contributors or former members or 8
contributors, to the successor fund, 9
(c) the payment of benefits transferred to the successor fund, 10
(d) the funds and reserves to be established in respect of the successor fund, 11
(e) the preservation or deferral of benefits transferred to the successor fund, 12
(f) the entitlements, rights and obligations of a member of, or contributor 13
to, an STC scheme whose benefit is transferred to the successor fund, 14
(g) the deeming of employers to be no longer employers under an STC 15
scheme where all the benefits of the relevant employees are transferred 16
from the STC scheme to the successor fund. 17
[16] Section 129A 18
Insert after section 129: 19
129A Prudential standards or reporting and auditing requirements 20
(1) The Minister may, by order published in the Gazette, declare that prudential 21
standards, or reporting and auditing requirements, specified or described in the 22
order are standards or requirements that apply to STC in the exercise of any 23
principal function of STC described in the order. 24
(2) Before making an order under this section, the Minister is to consult STC on 25
the proposed standards or requirements. 26
(3) An order under this section takes effect on the day specified in the order. 27
(4) STC, and any person carrying out a principal function on behalf of STC, must 28
comply with any standard or requirement applied to STC under this section. 29
[17] Schedule 3 Savings and transitional provisions 30
Insert at the end of clause 1 (1): 31
any other Act that amends this Act 32
Page 6
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