[Draft] Superannuation Legislation Amendment Regulation 2012 (Cth)

The draft Superannuation Legislation Amendment Regulation 2012 has been introduced to the Federal Parliament, the purpose being to give effect to changes arising from legislation implementing MySuper and governance reforms. 

The proposed regulations amend the Corporations Regulations 2001, Superannuation  Guarantee (Administration) Regulations 1993, and Superannuation Industry (Supervision) Regulations 1994. As set out in the explanatory memorandum, the regulations would:

• require trustees to provide a significant event notice to a member of a MySuper product, where the trustee, or an associate of the trustee, suggests or recommends to the member that they transfer their interest in the MySuper product to any other product; 

• amend the conditions for insurance in respect of death that superannuation funds must meet in order for contributions to those funds to satisfy choice of fund requirements;

• allow the existing definition of permanent incapacity in the SIS Regulations to apply for the purposes of the SIS Act;

• prohibit trustees from providing insured benefits for members unless they are backed by an insurance policy from an insurer;

• prohibit trustees from providing externally insured benefits (other than those that satisfy the conditions of release in the SIS Regulations for death, terminal medical condition, permanent incapacity and temporary incapacity), to beneficiaries who join the fund from 1 July 2013;

• exempt the transfer of accrued default amounts to a MySuper product in another fund from the successor fund transfer rules;

• require trustees to provide a notice to a member when they are attributing the member’s accrued default amount to a MySuper product or moving it to another fund; and

• allow life and total and permanent disability (TPD) insurance to be offered on a compulsory basis for MySuper members if the trustee is reasonably satisfied the insurance cannot be provided on an opt-out basis at reasonable cost.

If passed, the proposed regulations would commence on 1 July 2013, with the remaining regulation changes for Stronger Super MySuper and Governance to be released in coming months. Subscribers can follow this legislation through Parliament by clicking here.

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