Veterans' Entitlements (Actuarial Certificate-Life Expectancy Income Stream Guidelines) Determination 2013

Link to law: https://www.comlaw.gov.au/Details/F2013L00671

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REPATRIATION COMMISSION
Veterans’ Entitlements Act 1986
Veterans' Entitlements (Actuarial Certificate—Life Expectancy Income Stream Guidelines) Determination 2013
Instrument 2013 No. R12
The Repatriation Commission makes this Determination under subsection 5JB(1C), paragraph 5JB(1A)(b), subsection 5JB(5), of the Veterans’ Entitlements Act 1986
 
 
 
Dated this            11th  day of         April                    2013
 
 
 
Ian Campbell                Shane Carmody                      Major General Mark Kelly
IAN CAMPBELL      SHANE CARMODY           MAJOR GENERAL MARK KELLY
        PSM                                                                                           AO DSC
  PRESIDENT             DEPUTY PRESIDENT                            COMMISSIONER
 
 
 
Part 1            Preliminary
1.1       Name of Determination
            This determination is the Veterans' Entitlements (Actuarial Certificate—Life Expectancy Income Stream Guidelines) Determination 2013.
1.2       Commencement
     (1) This determination commences on the day after it is registered on        the Federal Register of Legislative Instruments.
 
(2) This determination applies to actuarial certificates given on or after the day the determination commences.
1.3      Revocation of Previous Determination
The Veterans' Entitlements (Actuarial Certificate—Life Expectancy Income Stream Guidelines) Determination 2009 is revoked.
1.4       Definitions
            In this determination:
            Act means the Veterans' Entitlements Act 1986.
annuity backed self managed superannuation fund means a self managed superannuation fund with a life expectancy income stream where that income stream is fully backed by an annuity that is sourced from a life insurance company.
annuity backed small APRA fund means a small APRA fund with a life expectancy income stream where that income stream is fully backed by an annuity that is sourced from a life insurance company.
Commission has the same meaning as in the Act.
            high degree of probability means:
            (a)       a certification by an actuary that the fund has a probability of at least 70% of being able to pay the pension as required under the fund’s governing rules; or
            (b)       a certification by an actuary that the fund has a probability of at least 50% but less than 70% of being able to pay the pension as required under the fund’s governing rules but special circumstances arise that, in the actuary’s opinion, if those circumstances had not arisen the fund would, as at the valuation date, have been able to be certified as having a high degree of probability.
            life insurance company has the same meaning as in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.
self managed superannuation fund has the same meaning as in section 17A of the Superannuation Industry (Supervision) Act 1993.
1.5       Purpose
            The purpose of this determination is to specify a class of provider of income streams who must provide an actuarial certificate and to set out the guidelines to be complied with by the Commission when determining, under paragraph 5JB(1A)(b) of the Act, whether an actuarial certificate is in force in relation to an income stream.  This determination also sets out what constitutes a high probability or positive opinion that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules in order for that income stream to be an asset-test exempt income stream.  This determination also sets out guidelines, under subsection 5JB(5) of the Act, to be complied with by the Commission in making a determination that an income stream is an asset-test exempt income stream for the purposes of the Act under subsection 5JB(4).
1.6      Class of provider—self managed superannuation fund
 
For paragraph 5JB(1A)(b) of the Act, a provider of an income stream from a self managed superannuation fund, other than an annuity backed self managed superannuation fund, is a specified class of provider.
1.7      Class of provider—small APRA fund
For paragraph 5JB(1A)(b) of the Act, a provider of an income stream from a small APRA fund, other than an annuity backed small APRA fund, is a specified class of provider.
 
Part 2            Guidelines
2.1       Asset-test exempt life expectancy income stream—self managed superannuation fund
            Provision of an actuarial certificate
            (1) Subject to subsection (2), if the provider of an income stream is included in the class of provider specified in section 1.6 then a member or the trustee of the fund must provide an actuarial certificate to the Commission.
            General requirements of the actuarial certificate
            (2) The actuarial certificate required to be provided to the Commission by the person or the trustee of the fund under subsection (1) must:
                  (a) be prepared in accordance with the Institute of Actuaries of Australia Guidance Note 465; and
(b) be certified no later than 26 weeks after the start of the financial year to which it applies and be provided to the Commission no later than 3 weeks after the end of that 26 week period; and
(c)     specify whether there is a high degree of probability, at the valuation date, of the fund meeting the income stream payments specified under the fund’s trust deed or governing rules; and
(d) specify an in force period from 1 July to 30 June of the financial year in which certification occurs.
2.2       Asset-test exempt life expectancy income stream—small APRA fund
            Provision of an actuarial certificate
            (1) Subject to subsection (2), if the provider of an income stream is included in the class of provider specified in section 1.7 then a member or the trustee of the fund must provide an actuarial certificate to the Commission.
            General requirements of the actuarial certificate
            (2) The actuarial certificate required to be provided to the Commission by the person or the trustee of the fund under subsection (1) must:
                  (a) be prepared in accordance with the Institute of Actuaries of Australia Guidance Note 465; and
(b) be certified no later than 26 weeks after the start of the financial year to which it applies and be provided to the Commission no later than 3 weeks after the end of that 26 week period; and
(c) specify whether there is a high degree of probability, at the valuation date, of the fund meeting the income stream payments specified under the fund’s trust deed or governing rules; and
(d) specify an in force period from 1 July to 30 June of the financial year in which certification occurs.
2.3       Application of paragraph 5JB(1A)(b) of the Veterans' Entitlements Act 1986 following certification of a high degree of probability
(1)   If the actuarial certificate provided to the Commission by the person or the trustee of the fund under subsection 2.1(1) or subsection 2.2(1) does certify that for the financial year in which the certificate is given, there is a high degree of probability that the fund will be able to pay the pension as required under the fund’s governing rules then paragraph 5JB(1A)(b) of the Act is satisfied.
 
Actuarial certificate certified or provided late
 
(2) Despite subsection 2.3(1), if an actuarial certificate in relation to a financial year is not:
(a)   certified under paragraph 2.1(2)(b) or subsection 2.2(2)(b) within 26 weeks beginning on 1 July of that financial year; or
(b)   provided to the Commission by the person or the trustee of the fund under subsection 2.1(1) or subsection 2.2(1) within 29 weeks beginning on 1 July of that financial year;
then paragraph 5JB(1A)(b) of the Act is considered to be not satisfied and the income stream is to be determined to be an asset-tested income stream (long term).
2.4       Application of paragraph 5JB(1A)(b) of the Veterans' Entitlements Act 1986 following non-certification of a high degree of probability
          Actuarial certificate provided does not certify high probability
 
If the actuarial certificate provided to the Commission by the person or the trustee of the fund under subsection 2.1(1) or subsection 2.2(1) does not certify that for the financial year in which the certificate is given, there is a high degree of probability that the fund will be able to pay the pension as required under the fund’s governing rules then paragraph 5JB(1A)(b) of the Act is considered to be not satisfied and the income stream is to be determined to be an asset-tested income stream (long term).