Trust deeds and governing rules - frequently asked questions
8.1 What documents does APRA expect to see as part of the fund's governing rules?
To be able to register a registrable superannuation entity (RSE), APRA must be satisfied that nothing in the governing rules of the entity conflicts with the requirements of Part 6 of the Act. In this regard, the trustee must submit all governing rules that together demonstrate to APRA that they contain and are consistent with these requirements. The definition of 'governing rules' in section 10 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) was not affected by the SSAA. The definition of '"governing rules" is defined as follows:
- "governing rules in relation to a fund, scheme or trust, means
- any rules contained in a trust instrument, other document or legislation, or combination of them;
- or any unwritten rules; governing the establishment or operation of the fund, scheme or trust".
Governing rules will always include the trust deed or other constituent instrument and any rules attached to the trust deed or other instrument together with any further rules which are made pursuant to such instrument. The governing rules will not generally encompass the documents setting out determinations, delegations or agreements made pursuant to those rules.
The following will generally not be considered part of the governing rules:
- a life insurance policy effected by the Trustee (except certain older style policies which themselves contain the constituent trust instrument);
- outsourcing agreements such as administration, custodian or investment management agreements to the extent that they are delegations made pursuant to the governing rules;
- resolutions or other determinations of the trustee or a committee or other delegate of the trustee, in so far as they do not set out provisions relating to the operation of the fund;
- participation agreements which simply record the agreement of an employer or other party to be bound by the governing rules of the fund. An exception will exist where the agreement actually sets out rules governing that employer's participation which are in addition to and are authorised by the trust deed.
Where agreements with participating employers would be included in the governing rules, APRA would only require a copy of the standard participation agreement, and marked-up extracts of where any particular agreement differs from the standard.
8.2 What will APRA do with the governing rules and/or trust deed?
APRA will review the governing rules against Part 6 of the SIS Act. To assist APRA in that review process, governing rules should be presented in a way that is comprehensible and which demonstrates that the Trustee understands what documents constitute its governing rules. Where APRA is required to perform 'forensic' work in order to ascertain what documents constitute the governing rules or piece together several amending deeds, this time-consuming exercise could cause delays in that review process.
8.3 Is a general compliance clause necessary?
No. However, without a compliance clause, APRA would in all likelihood have to review and consider every provision of the governing rules. As mentioned in 8.1 above, for registration purposes, APRA must be satisfied that the governing rules do not conflict with Part 6 of the SIS Act. A legally effective compliance clause may save inconsistent provisions within governing rules, which are not rectified by the deeming provisions of sections 52 or 53 or the invalidating or voiding provisions of sections 56 to 60A inclusive of the SIS Act. The effectiveness of a compliance clause can only be assessed on an individual basis. An effective compliance clause should as a minimum have sufficient breath of operation; expressly override inconsistent provisions within the governing rules and operate automatically without trustee determination or intervention.
8.4 Is a consolidated deed necessary?
No. However the fact that a set of rules is consolidated will assist APRA in its review process and demonstrate that the Trustee is aware of what terms comprise the fund's governing rules. A reference to a consolidated set of rules does not necessarily mean a set of rules which is executed afresh as a new deed of consolidation. A deed can be consolidated through a working copy which, if certified by or on behalf of the Trustee, will be acceptable to APRA.
8.5 Is it a requirement that governing rules which are inconsistent with Part 6 of the Superannuation Industry (Supervision) Act 1993 but are void or invalidated by the operation of Part 6 be removed or amended?