Superannuation Laws in Australia

Superannuation in Australia is provided by public retail funds, funds established for public servants and SMSF self-managed funds.

The super laws apply different admin requirements to the setting-up, running and compliance of the different sectors, with some considerable overlap.

The overall purpose of the rules is to enable (usually tax-favorable) savings for retirement, and for the orderly draw-down and taxing of funds during retirement.

Aspects of the Australian super laws seek to provide safeguards for consumers and members by setting out investment restrictions, obligations of trustees and others, and reporting requirements.

The system is partly compulsory, through contributions levied on wages and salaries by employers, including government, (the superannuation guarantee) and sent to the super fund on the employee’s behalf.

Self-employed can also participate in the system within certain limits, by employing themselves through a legal entity or directly as a sole trader or business partner.

Superannuation supervision

Government bodies directly involved in the regulation and supervision of super funds in Australia include:

APRA – Australian Prudential Regulation Authority: supervises all funds, other than SMSFs

ATO – Australian Taxation Office: supervises SMSF funds, and administers the tax rules for all funds.

ASIC – the Australian Securities and Investments Commission: enforces the Corporations Act 2001 which regulates financial services providers, including superannuation trustees with an Australian financial services licence

• consumers: investor and consumer protection in financial services, including super and investments
• finance professionals: registers of SMSF auditors and other matters

The Superannuation Complaints Tribunal dealt with complaints involving regulated super funds until 2018.

From 1 November 2018 the Australian Financial Complaints Authority (AFCA) replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.

Superannuation legislation

Some of the legislation specific to super funds includes:

Superannuation Industry (Supervision) Act 1993

• Sec 62 – sole purpose test
• Sec 62A – Self managed superannuation funds–investment in collectables and personal use assets
• Sec 67 Borrowing
• Sec 67A Limited recourse borrowing arrangements
• Sec 67B Limited recourse borrowing arrangements–replacement assets
• Sec 109 Investments of superannuation entity to be made and maintained on arm’s length basis

Superannuation Industry (Supervision) Regulations 1994

• SCHEDULE 1 CONDITIONS OF RELEASE OF BENEFITS

Superannuation Guarantee (Administration) Act 1992

See also: Australian Government Department of Finance – Superannuation Policy and Legislation

Super Reforms: Law Companion Rulings

• LCR 2016/8 Superannuation reform: Transfer balance cap and transition to retirement: transitional CGT relief
• LCR 2016/9 Superannuation reform: Transfer balance cap
• LCR 2016/10 Superannuation reform: Capped defined benefit income streams: non-commutable, lifetime pensions and lifetime annuities
• LCR 2016/11 Superannuation reform: Concessional contributions defined benefit interests and constitutionally protected funds
• LCR 2016/12 Superannuation reform: Total Superannuation balance
• LCR 2017/1 Superannuation reform: Capped defined benefit income streams: pensions or annuities paid from non-commutable, life expectancy or market-linked products
• LCR 2017/3 Superannuation reform: Superannuation death benefits and the transfer balance cap
• LCR 2020/3 The superannuation fund for foreign residents withholding tax exemption and sovereign immunity
• LCR 2021/2 Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement

LRBA guidance

Practical Compliance Guidelines PCG 2016/5 Income tax – arm’s length terms for Limited Recourse Borrowing Arrangements established by self-managed superannuation funds

See also

• Super Funds Borrowing
• How your SMSF is regulated – ATO
• APRA regulated funds – ATO
• Choosing a Super Fund – ASIC

This page was last modified on 2023-06-30