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Superannuation (prudential standard) determination No. 2 of 2013

Prudential Standard SPS 160 Defined Benefit Matters

Superannuation Industry (Supervision) Act 1993

I, Ross Jones, delegate of APRA, under subsection 34C(1) of the Superannuation Industry (Supervision) Act 1993 (the Act), DETERMINE Prudential Standard SPS 160 Defined Benefit Matters in the form set out in the Schedule, which applies to all RSE licensees of a defined benefit fund and all RSE actuaries.
This instrument commences on 1 July 2013.
Dated: 28 June 2013
[signed]
Ross Jones
Deputy Chair
Interpretation
In this instrument:

APRA means the Australian Prudential Regulation Authority.

RSE actuary has the meaning given in section 10(1) of the Act.

RSE licensee has the meaning given in section 10(1) of the Act.
Schedule

Prudential Standard SPS 160 Defined Benefit Matters comprises the 15 pages commencing on the following page.

Prudential Standard SPS 160

Defined Benefit Matters

Objectives and key requirements of this Prudential Standard

This Prudential Standard establishes requirements for an RSE licensee of a defined benefit fund to manage the fund with the objective of enabling the RSE licensee, out of the assets of the fund, to meet the liabilities of the fund as they become due.

The requirements in this Prudential Standard also apply to defined benefit sub-funds.

The key requirements of this Prudential Standard include that an RSE licensee must:

     * appoint an RSE actuary to undertake, and report on, regular actuarial investigations into the financial position of a defined benefit fund;
     * arrange for an interim actuarial investigation in circumstances where the financial position of a defined benefit fund deteriorates below a shortfall limit set by the RSE licensee;
     * implement a program to restore a defined benefit fund to a satisfactory financial position, so that the vested benefits of beneficiaries are fully funded, and submit the program to, and report to, APRA; and
     * if the fund is permitted to self-insure benefits, arrange for regular actuarial oversight, attest annually that the self-insurance continues to be in the best interests of beneficiaries and develop a contingency plan for an orderly wind-up of the self-insurance arrangements.

Authority
     1. This Prudential Standard is made under section 34C of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Application
    2.             This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees) of a defined benefit fund unless otherwise expressly stated in this Prudential Standard or where the RSE is listed in Attachment A.[1] Certain provisions of this Prudential Standard also apply to RSE actuaries.[2]

    3.             For the purposes of this Prudential Standard, 'defined benefit fund' means a regulated superannuation fund that has at least one defined benefit member, including where the regulated superannuation fund is a public sector superannuation scheme.