Superannuation Guarantee Scheme - Benefit Certificate prepared at a later date

Does the Commissioner accept a later date than would otherwise be specified by the legislation, for the preparation of a benefit certificate where the request is made to rectify an error?

Yes. The Commissioner accepts a later date than would otherwise be specified by the legislation, for the preparation of a benefit certificate where the request is made to rectify an error.

The benefit certificate will be accepted in respect of minimum requisite benefits accrued during the financial years ending 30 June 2000 and 30 June 2001.

The superannuation scheme is a defined benefit superannuation scheme under subsection 6A(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA), as it has at least one member entitled to a benefit defined as 'a specified amount'.

The majority of benefits provided from the scheme are accumulation only benefits.

The sponsoring employer paid contributions to the scheme to provide accumulation benefits for members at a rate no less than the corresponding superannuation guarantee charge percentage in effect from time to time, prior to 30 June 1999.

From 1 July 1999 onwards, the employer wishes to use accumulation benefits paid for from surplus to meet the employer's superannuation guarantee obligations under subsection 22(2) of the SGAA. To do this, the scheme must have a benefit certificate as provided for under section 10 of the SGA in effect.

The benefit certificate must satisfy subregulation 3(2) of the Superannuation Guarantee (Administration) Regulations 1993 (SGAR), which requires that:

'A benefit certificate must: (a) specify, or identify by reference to the governing rules of each scheme to which the certificate relates, the minimum requisite benefit; and (b) specify: (i) the notional employer contribution rate in relation to each scheme, or combination of schemes, to which the certificate relates; and (ii) the class of members of the scheme or schemes to which the notional employer contribution rate relates; and (iii) Minimum requisite benefits are defined in regulation 2 of the SGAR and are subject to the minimum benefit requirements of part 5 of the Superannuation Industry (Supervision) Regulations 1994. That is, once a minimum requisite benefit has accrued it is covered by the provisions part 5 of the Superannuation Industry (Supervision) Regulations 1994 and can not be reduced.

The scheme's actuary intends to prepare a benefit certificate with a commencement date of 1 July 1999, which allows for accumulation benefits provided for members at a level satisfying the superannuation guarantee charge percentage in effect, for the financial years ended 30 June 2000 and 30 June 2001. This benefit certificate would have the effect of allowing the employer to use the accumulation benefits paid for from surplus to meet the employer's superannuation guarantee obligations, for these years.

Under subsection 10(5) of the SGAA a benefit certificate must be prepared no later than 14 August following the end of the financial year to which it relates and can not be backdated prior to 1 July of the first financial year to which it relates.

Subsection 10(5) of the SGAA and subregulation 3(1) of the SGAR give the Commissioner discretion to allow a benefit certificate to be backdated beyond the limits specified in the legislation. This power is expressed as the ability to accept a benefit certificate issued at a later date than would normally be required by this legislation.

Exercise of the Commissioner's discretion has the effect of allowing a backdated benefit certificate to be prepared.

No benefit certificate has been prepared for the scheme in respect of the period from 1 July 1992 onwards.

The scheme's actuary requests that the Commissioner exercise his discretion to accept a benefit certificate prepared on the basis described above.

The Commissioner is satisfied that the proposed minimum requisite benefits provided for members of the scheme will be no less than the level required by the superannuation guarantee legislation and the suggested change is intended solely to rectify an error.