Superannuation Industry (Supervision) Act 1993

This section does not apply to an excluded superannuation fund during the period:

beginning on 21 October 1992; and

ending immediately before the day on which subsection (2A) commenced.

This section does not apply to a self managed superannuation fund if, at all times after the day on which this subsection commenced when the fund was in existence, the fund was a self managed superannuation fund.

Except as provided by this section, a trustee of a standard employer‑sponsored fund must not pay an amount, or permit an amount to be paid, out of the fund to a standard employer‑sponsor.

Subsection (3) does not apply in circumstances where:

its application would result in the acquisition of property from a person otherwise than on just terms; and

the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution.

A reasonable amount may be paid out of any standard employer‑sponsored fund to a standard employer‑sponsor for services rendered in connection with the management or operation of the fund.

An amount may be paid out of a standard employer‑sponsored fund to a standard employer‑sponsor if the following requirements are fulfilled:

apart from this section, the governing rules would require or permit the amount to be paid to the employer‑sponsor;

whichever of the following subparagraphs is applicable has been complied with:

if the fund has a single corporate trustee:

the directors of the trustee have, by resolution, declared their intention to pay the amount out of the fund to the employer‑sponsor; and

when that resolution was passed, the board of the corporate trustee complied with the basic equal representation rules under Part 9;

if the fund has a group of individual trustees:

the trustees have, by resolution, declared their intention to pay the amount out of the fund to the employer‑sponsor; and

when that resolution was passed, the group of trustees complied with the basic equal representation rules under Part 9;

in any other case—the trustee has declared his or her intention to pay the amount out of the fund to the employer‑sponsor;

before the resolution referred to in subparagraph (b)(i) or (ii), was passed or before the declaration referred to in subparagraph (b)(iii) was made:

an actuary had given a written certificate to the trustee, or the trustees, of the fund stating that, if the amount were paid, the fund would remain in a satisfactory financial position; and

the trustee, or the trustees, were satisfied that the payment of the amount and the making of the changes (if any) to the governing rules were reasonable having regard to the interests of the employer‑sponsor and of the beneficiaries in the fund;

a trustee of the fund gave notice in accordance with the governing rules to all members of the fund:

stating the intention to pay the amount to the employer‑sponsor; and

stating that an actuary has given a certificate to the trustee, or the trustees, of the fund as required by subparagraph (c)(i); and

setting out particulars of any changes to the governing rules that were proposed to be made if the amount were paid to the employer‑sponsor;

at the end of 3 months after the notice mentioned in paragraph (d) was given to members, the provisions of whichever of the following subparagraphs is applicable were complied with:

if the fund has a single corporate trustee—the directors of the corporate trustee passed a resolution agreeing to pay the amount out of the fund to the employer‑sponsor;

if the fund has a group of individual trustees—the trustees passed a resolution agreeing to pay the amount out of the fund to the employer‑sponsor;

in any other case—the trustee decided to make the payment;

any other requirements made by the regulations.

The requirement in paragraph (5)(d) is taken not to have been fulfilled unless the notice is given in a way that enables each trustee of the fund to be reasonably satisfied that the notice came to the attention of all the members of the fund other than members who are lost members within the meaning of the regulations.

APRA may waive any or all of the requirements specified in subsection (5) in relation to a matter occurring on or after the date of commencement of this section.

Subsection (3) is a civil penalty provision as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or of being involved in a contravention of, that subsection.

A reference in this section to the payment of an amount out of a standard employer‑sponsored fund to a standard employer‑sponsor does not include a reference to the payment of an amount by way of the making of a loan to, or an investment in, the standard employer‑sponsor.

In this section:

if a standard employer‑sponsor is a body corporate—another body corporate that is related to the employer‑sponsor; or

if a standard employer‑sponsor is an individual—an associate of the employer‑sponsor.

For the purposes of this section:

a reference to a standard employer‑sponsored fund includes a reference to a former standard employer‑sponsored fund; and

a reference to a standard employer‑sponsor includes a reference to a former standard employer‑sponsor.