Document ID: chunk:federal_register_of_legislation:F2023C00839:body:0:p11
Version: federal_register_of_legislation:F2023C00839
Segment Type: other
Provision Reference: 
Character Range: 24988–27729

see subsection 601FB(2).
(2) The formula or method must be based on the value of scheme property attributable to interests of the relevant class less any liabilities that under the constitution may be met from that property attributable to interests in that class divided by the number of interests on issue in that class.
(3) A discretion in the constitution of the kind referred to in subsection (1) must not be exercised on the basis that it will result in a particular amount being set as the amount that will be paid to a member making a withdrawal.
(4) If a constitution includes a provision covered by subsection (1) the responsible entity must comply with subsections (5) to (11).

           Exercise of discretion must be reasonable

(5) The responsible entity must act reasonably in exercising a discretion covered by subsection (1).
Note:  The responsible entity is also subject to its general duties under section 601FC including the duty to act in the best interests of the members of the scheme.
(6) Without limiting subsection (5), if the discretion relates to working out the value of scheme property, the manner in which a discretion is exercised must as far as practicable be consistent with ordinary commercial practice for valuing property of the relevant kind.

           Documentation of exercise of discretion

(7) The responsible entity must prepare one or more documents that:
(a) set out:
(i) a description of the formula or method that the responsible entity may apply in working out the withdrawal amount including each discretion covered by subsection (1) relevant to the formula or method; and
(ii) the circumstances in which the responsible entity may exercise each discretion; and
(iii) what policy (the documented policy) (if any) the responsible entity has set dealing with how they propose to exercise each discretion and the date on which the policy was set; and
(iv) what records the responsible entity will keep about the exercise of each discretion; and
Note:  If a particular policy applies in relation to more than one discretion set out in the constitution, it is sufficient for the policy to be documented once provided that each of the discretions to which it relates is specified. For instance, a policy relating to the rounding of the result of a calculation may be expressed to apply in relation to separate provisions in the constitution specifying a formula for performing calculations.
(b) if the discretion is to be exercised by a nominee—state that the discretion will be so exercised and identify the nominee; and
(c) in relation to each discretion for which a documented policy has been set—explain why it is reasonable to exercise the discretion in accordance with the policy; and
(d)