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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017
The Parliament of the
Commonwealth of Australia
THE SENATE
Presented and read a first time
Superannuation Laws Amendment
(Strengthening Trustee Arrangements)
Bill 2017
No. , 2017
(Treasury)
A Bill for an Act to amend the law in relation to
superannuation, and for related purposes
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--RSE licensees
3
Part 1--Main amendments
3
Superannuation Industry (Supervision) Act 1993
3
Part 2--Other amendments
10
Superannuation Industry (Supervision) Act 1993
10
Part 3--Application and transitional provisions
13
Schedule 2--Board of CSC
15
Part 1--Independence of directors
15
Governance of Australian Government Superannuation Schemes Act
2011
15
Part 2--Application provisions
17
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
1
A Bill for an Act to amend the law in relation to
1
superannuation, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act is the Superannuation Laws Amendment (Strengthening
5
Trustee Arrangements) Act 2017.
6
2 Commencement
7
(1) Each provision of this Act specified in column 1 of the table
8
commences, or is taken to have commenced, in accordance with
9
column 2 of the table. Any other statement in column 2 has effect
10
according to its terms.
11
12
2
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The day after this Act receives the Royal
Assent.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedules
7
Legislation that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
RSE licensees Schedule 1
Main amendments Part 1
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
3
Schedule 1--RSE licensees
1
Part 1--Main amendments
2
Superannuation Industry (Supervision) Act 1993
3
1 Part 9
4
Repeal the Part, substitute:
5
Part 9--Independence of RSE licensees
6
7
86 RSE licensee must have independent directors etc. or trustees
8
(1) If an RSE licensee of a registrable superannuation entity is a body
9
corporate:
10
(a) the Chair of the RSE licensee's board of directors must be
11
independent from the RSE licensee; and
12
(b) at least one third of the RSE licensee's directors must be
13
independent from the RSE licensee; and
14
(c) the RSE licensee must comply with any requirements of the
15
prudential standards relating to the appointment or removal
16
of directors who are independent from the RSE licensee.
17
(2) To avoid doubt, the Chair of the RSE licensee's board of directors
18
is to be included in determining whether the requirement in
19
paragraph (1)(b) is complied with.
20
(3) If an RSE licensee of a registrable superannuation entity is a group
21
of individual trustees:
22
(a) at least one third of the trustees must be independent from the
23
RSE licensee; and
24
(b) the RSE licensee must comply with any requirements of the
25
prudential standards relating to the appointment or removal
26
of trustees who are independent from the RSE licensee.
27
Schedule 1 RSE licensees
Part 1 Main amendments
4
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
87 Meaning of independent from an RSE licensee
1
(1) A person is independent from an RSE licensee of a registrable
2
superannuation entity unless the person:
3
(a) if the RSE licensee is a body corporate that has a share
4
capital--has a shareholding interest in 5% or more of the
5
share capital of the RSE licensee; or
6
(b) if the RSE licensee is a body corporate--has a shareholding
7
interest in 5% or more of the share capital of a body
8
corporate that is related to the RSE licensee; or
9
(c) if the RSE licensee is a body corporate--is, or has been at
10
any time during the preceding 3 years:
11
(i) an executive officer (other than a director) or an
12
employee of the RSE licensee; or
13
(ii) a director or executive officer of a body corporate that is
14
related to the RSE licensee; or
15
(d) has, or has had at any time during the preceding 3 years, a
16
business relationship:
17
(i) with the RSE licensee; or
18
(ii) if the RSE licensee is a group of individual trustees--
19
with any of the trustees;
20
that is, or was at the time, material to the person or to the
21
RSE licensee (or trustee); or
22
(e) is, or has been at any time during the preceding 3 years:
23
(i) a director or executive officer of a person paragraph (d)
24
applies to; or
25
(ii) a person who, in the capacity of an employee of a
26
person paragraph (d) applies to, is or was involved in
27
the business relationship referred to in that paragraph; or
28
(f) if the RSE licensee is a trustee of a regulated superannuation
29
fund--is, or has been at any time during the preceding 3
30
years, a director or executive officer of:
31
(i) an employer-sponsor of the fund who is a large
32
employer in relation to the fund within the meaning of
33
section 29TB; or
34
(ii) an organisation, representing the interests of one or
35
more employer-sponsors of the fund, that has the right
36
RSE licensees Schedule 1
Main amendments Part 1
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
5
to appoint, or nominate for appointment, directors or
1
trustees of the RSE licensee; or
2
(iii) an organisation, representing the interests of members
3
of the fund, that has the right to appoint, or nominate for
4
appointment, directors or trustees of the RSE licensee;
5
or
6
(g) is a person to whom circumstances of a kind prescribed by
7
regulations made for the purposes of this paragraph apply.
8
(2) For the purposes of paragraphs (1)(a) and (b), disregard any
9
shareholding interest that:
10
(a) does not confer a right to profit from the interest, or give rise
11
to an expectation that the person will profit from the interest;
12
and
13
(b) a person has as a result of holding office as a director of the
14
RSE licensee.
15
(3) Despite subsection (1), a person is independent from an RSE
16
licensee if circumstances of a kind prescribed by regulations made
17
for the purposes of this subsection apply to the person.
18
(4) Despite subsections (1) and (3):
19
(a) a person is independent from an RSE licensee if APRA so
20
determines under section 88; and
21
(b) a person is not independent from an RSE licensee if APRA
22
so determines under section 90.
23
88 Determination that a person is independent from an RSE licensee
24
(1) APRA may, on application by an RSE licensee, determine that a
25
person is independent from the RSE licensee if APRA reasonably
26
believes that the person is likely to be able to exercise independent
27
judgement in performing the role of:
28
(a) if the RSE licensee is a body corporate--a director of the
29
licensee; or
30
(b) if the RSE licensee is a group of individual trustees--one of
31
those trustees.
32
(2) In deciding whether to make the determination APRA must have
33
regard to:
34
Schedule 1 RSE licensees
Part 1 Main amendments
6
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
(a) the extent (if any) to which circumstances of a kind referred
1
to in paragraphs 87(1)(a) to (g) do not apply to the person;
2
and
3
(b) the extent (if any) to which circumstances of a kind referred
4
to in subsection 87(3) apply to the person.
5
(3) APRA must:
6
(a) if it makes a determination under this section in relation to
7
the person--give the RSE licensee written notice of the
8
determination; or
9
(b) if it refuses an application under section 89 to make such a
10
determination--give the RSE licensee written notice of:
11
(i) its decision to refuse the application; and
12
(ii) the reasons for that refusal.
13
(4) A determination under this section:
14
(a) takes effect on the day it is made; and
15
(b) ceases to have effect if APRA makes a determination under
16
section 90 that the person is not independent from the RSE
17
licensee.
18
89 Applying for a determination that a person is independent from
19
an RSE licensee
20
(1) An RSE licensee may apply to APRA, in writing, for a
21
determination under section 88 that a particular person is
22
independent from the RSE licensee.
23
(2) APRA may give to the applicant a notice requesting the applicant
24
to give APRA, in writing, specified information relating to the
25
application.
26
Note:
A failure to give the requested information delays the time within
27
which APRA must decide the application: see paragraph (3)(b).
28
(3) APRA must decide the application:
29
(a) within 60 days after receiving it; or
30
(b) if the applicant was requested to provide information under
31
subsection (2)--within 60 days after receiving from the
32
applicant all of the information the applicant was requested to
33
provide under that subsection;
34
RSE licensees Schedule 1
Main amendments Part 1
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
7
unless APRA extends the period for deciding the application under
1
subsection (4).
2
(4) If APRA thinks that it will take longer than 60 days to decide the
3
application, APRA may extend the period for deciding it by up to
4
60 days if APRA informs the applicant of the extension:
5
(a) in writing; and
6
(b) within the period in which it would otherwise be required to
7
decide the application under subsection (3).
8
(5) If APRA extends the period for deciding the application, it must
9
decide the application within the extended period.
10
(6) If APRA has not decided the application by the end of the period
11
by which APRA is required to decide it, APRA is taken to have
12
decided, at the end of the last day of that period, to refuse the
13
application.
14
90 Determination that a person is not independent from an RSE
15
licensee
16
(1) APRA may determine that a person is not independent from an
17
RSE licensee if APRA is reasonably satisfied that the person is
18
unlikely to be able to exercise independent judgement in
19
performing the role of:
20
(a) if the RSE licensee is a body corporate--a director of the
21
licensee; or
22
(b) if the RSE licensee is a group of individual trustees--one of
23
those trustees.
24
(2) In deciding whether to make the determination APRA must have
25
regard to:
26
(a) the extent (if any) to which circumstances of a kind referred
27
to in paragraphs 87(1)(a) to (g) apply to the person; and
28
(b) the extent (if any) to which circumstances of a kind referred
29
to in subsection 87(3) do not apply to the person.
30
(3) APRA may specify in the determination a period for which the
31
determination has effect.
32
Schedule 1 RSE licensees
Part 1 Main amendments
8
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
(4) A determination under this section takes effect on the day it is
1
made.
2
(5) APRA must give the RSE licensee written notice of:
3
(a) the determination; and
4
(b) the reasons for making the determination.
5
(6) A determination under this section ceases to have effect:
6
(a) if, under subsection (3), a period is specified in the
7
determination--when that period ends (unless it ends sooner
8
under paragraph (b)); or
9
(b) if APRA makes a determination under section 88 that the
10
person is independent from the RSE licensee.
11
(7) If, under subsection (3), a period is specified in the determination,
12
the person is not taken to be independent merely because the
13
period has ended.
14
91 Effect of vacancies
15
For the purposes of the application of section 86 to an RSE
16
licensee, if:
17
(a) a vacancy occurs in the membership of a group of trustees or
18
of the board of a corporate trustee; and
19
(b) immediately before the vacancy occurred, the RSE licensee
20
complied with that section; and
21
(c) the vacancy is filled within 120 days after it occurred; and
22
(d) immediately after the vacancy is filled, the RSE licensee
23
complies with that section;
24
the RSE licensee is taken to have complied with that section at all
25
times during the period of the vacancy.
26
92 Consequences of non-compliance with this Part
27
(1) A contravention of this Part does not result in the invalidity of a
28
transaction.
29
(2) However, a contravention of this Part may result in a fund being
30
directed under section 63 not to accept any contributions made to
31
the fund by an employer-sponsor (see subsection 63(6)).
32
RSE licensees Schedule 1
Main amendments Part 1
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
9
93 This Part does not apply if acting trustee appointed under
1
Part 17
2
This Part does not apply to an RSE licensee if the RSE licensee has
3
an acting trustee appointed under Part 17.
4
94 This Part overrides trust deeds etc.
5
Despite any provision of:
6
(a) a trust deed or other rules according to which a registrable
7
superannuation entity is administered; or
8
(b) the constitution of an RSE licensee that is a body corporate;
9
or
10
(c) any other document relating to an RSE licensee that imposes
11
requirements relating to the appointment of directors or
12
trustees of an RSE licensee;
13
a person does not contravene the trust deed or rules, the
14
constitution or the other document by complying with any
15
requirement that this Part imposes on the person.
16
Schedule 1 RSE licensees
Part 2 Other amendments
10
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
Part 2--Other amendments
1
Superannuation Industry (Supervision) Act 1993
2
2 Section 4 (table item dealing with Part No. 9)
3
Repeal the item, substitute:
4
9
independence of RSE licensees
3 Subsection 10(1) (definition of employer representative)
5
Repeal the definition.
6
4 Subsection 10(1)
7
Insert:
8
independent, from an RSE licensee, has the meaning given by
9
sections 87, 88 and 90.
10
5 Subsection 10(1)
11
Repeal the following definitions:
12
(a) definition of independent director;
13
(b) definition of independent trustee;
14
(c) definition of member representative;
15
(d) definition of policy committee.
16
6 Subsection 10(1) (paragraphs (m) to (nc) of the definition of
17
reviewable decision)
18
Repeal the paragraphs, substitute:
19
(m) a decision of APRA refusing to make a determination under
20
section 88 that a person is independent from an RSE licensee;
21
or
22
(n) a decision of APRA to make a determination under
23
section 90 that a person is not independent from an RSE
24
licensee; or
25
7 Subsection 10(1)
26
Insert:
27
RSE licensees Schedule 1
Other amendments Part 2
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
11
shareholding interest has the same meaning as in the Income Tax
1
Assessment Act 1997.
2
8 Subsection 10(2)
3
Repeal the subsection.
4
9 Subsection 29C(6) (note)
5
Repeal the note, substitute:
6
Note:
Part 9 has requirements for at least one third of directors to be
7
independent.
8
10 Subsection 29C(7) (note)
9
Repeal the note, substitute:
10
Note:
Part 9 has requirements for at least one third of trustees to be
11
independent.
12
11 Subsection 29EA(4)
13
Repeal the subsection.
14
12 Subsection 63(6) (heading)
15
Repeal the heading, substitute:
16
Contravention of rules relating to independence of directors and
17
trustees
18
13 Subsection 63(6)
19
Omit "equal representation", substitute "independence of directors and
20
trustees".
21
14 Subsections 63(7B) to (7D)
22
Repeal the subsections.
23
15 Subsection 63(8)
24
Omit "or (7B)".
25
16 Sections 107 and 108
26
Repeal the sections.
27
Schedule 1 RSE licensees
Part 2 Other amendments
12
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
17 Subparagraphs 117(5)(b)(i) and (ii)
1
Repeal the subparagraphs, substitute:
2
(i) if the fund has a single corporate trustee--the directors
3
of the trustee have, by resolution, declared their
4
intention to pay the amount out of the fund to the
5
employer-sponsor;
6
(ii) if the fund has a group of individual trustees--the
7
trustees have, by resolution, declared their intention to
8
pay the amount out of the fund to the employer-sponsor;
9
18 Subsection 117(9)
10
Repeal the subsection.
11
19 Paragraphs 223A(1)(f) and (g)
12
Repeal the paragraphs.
13
20 Subsection 312(1) (subparagraph (a)(iv) of the definition of
14
procedural irregularity)
15
Repeal the subparagraph.
16
21 Subsection 327(1) (paragraph (d) of the definition of
17
modifiable provision)
18
Repeal the paragraph.
19
22 Subsection 327(1) (at the end of the definition of
20
modifiable provision)
21
Add:
22
; (i) a provision of Part 3 of Schedule 1 to the Superannuation
23
Laws Amendment (Strengthening Trustee Arrangements) Act
24
2017.
25
RSE licensees Schedule 1
Application and transitional provisions Part 3
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
13
Part 3--Application and transitional provisions
1
23 The transition period
2
In this Part:
3
transition period means the period:
4
(a) starting on the day after this Act receives the Royal Assent;
5
and
6
(b) ending on the third anniversary of that day.
7
24 The effect of complying with transitional prudential
8
standards
9
If:
10
(a) a body corporate, or group of individual trustees, was an RSE
11
licensee immediately before the start of the transition period;
12
and
13
(b) after the commencement of this item, the RSE licensee
14
complies with any requirements of the prudential standards
15
relating to the transition of RSE licensees to compliance with
16
Part 9 of the Superannuation Industry (Supervision) Act 1993
17
as amended by this Act;
18
then:
19
(c) Part 9 of that Act, as in force immediately before that
20
commencement, does not apply to the RSE licensee; and
21
(d) the amendments made by this Schedule do not apply to the
22
RSE licensee until the end of the transition period.
23
25 Transitional prudential standards override trust deeds etc.
24
Despite any provision of:
25
(a) a trust deed or other rules according to which a registrable
26
superannuation entity is administered; or
27
(b) the constitution of an RSE licensee that is a body corporate;
28
or
29
(c) any other document relating to an RSE licensee that imposes
30
requirements relating to the appointment of directors or
31
trustees of an RSE licensee;
32
Schedule 1 RSE licensees
Part 3 Application and transitional provisions
14
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
a person does not contravene the trust deed or rules, the constitution or
1
the other document by complying with any requirement that the
2
prudential standards referred to in paragraph (b) of item 24 impose on
3
the person.
4
Board of CSC Schedule 2
Independence of directors Part 1
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
15
Schedule 2--Board of CSC
1
Part 1--Independence of directors
2
Governance of Australian Government Superannuation
3
Schemes Act 2011
4
1 Section 4
5
Insert:
6
independent from CSC has the meaning given by
7
subsection 12(4A).
8
RSE licensee has the same meaning as in the Superannuation
9
Industry (Supervision) Act 1993.
10
2 Subsection 12(4)
11
Repeal the subsection, substitute:
12
(4) In the case of any other director:
13
(a) the Minister must consult the Defence Minister before
14
making an appointment; and
15
(b) the person appointed must be independent from CSC.
16
(4A) A person is independent from CSC if the person is, under
17
section 87 of the Superannuation Industry (Supervision) Act 1993,
18
independent from CSC for the purposes of that Act.
19
3 At the end of section 12
20
Add:
21
(7) If paragraph (4)(b) required a person appointed as a director to be
22
independent from CSC, the person's appointment is not invalid
23
because he or she ceases, after the appointment, to be independent
24
from CSC.
25
Note:
The Minister may terminate the person's appointment for ceasing to
26
be independent from CSC: see subsection 17(5A).
27
Schedule 2 Board of CSC
Part 1 Independence of directors
16
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
No. , 2017
4 After subsection 17(5)
1
Insert:
2
(5A) The Minister may terminate the appointment of a director if:
3
(a) at the time of the appointment, paragraph 12(4)(b) required
4
the person appointed to be independent from CSC; and
5
(b) the director ceases, after the appointment, to be independent
6
from CSC.
7
5 Subsection 17(6)
8
Omit "or (5)", substitute ", (5) or (5A)".
9
6 After subsection 18(2)
10
Insert:
11
(2A) A person is not eligible for appointment to act as a director if:
12
(a) at the time of the appointment of the director in whose place
13
the person would act, paragraph 12(4)(b) required that
14
director to be independent from CSC; and
15
(b) at the time of the person's appointment to act, the person is
16
not independent from CSC.
17
Board of CSC Schedule 2
Application provisions Part 2
No. , 2017
Superannuation Laws Amendment (Strengthening Trustee
Arrangements) Bill 2017
17
Part 2--Application provisions
1
7 Existing appointments
2
(1)
The amendments made by this Schedule to section 12 of the
3
Governance of Australian Government Superannuation Schemes Act
4
2011 do not affect the appointment of a director that took effect before
5
the commencement of this item.
6
(2)
The amendments made by this Schedule to section 17 of the
7
Governance of Australian Government Superannuation Schemes Act
8
2011 do not apply to the termination of the appointment of a director if
9
the appointment took effect before the commencement of this item.
10
(3)
The amendments made by this Schedule to section 18 of the
11
Governance of Australian Government Superannuation Schemes Act
12
2011 do not apply to the appointment of a person to act as a director if
13
that director's appointment took effect before the commencement of
14
this item.
15