Document ID: chunk:federal_register_of_legislation:F2019L00646:body:0:p4
Version: federal_register_of_legislation:F2019L00646
Segment Type: other
Provision Reference: 
Character Range: 8574–11432

the surplus as unallocated surplus of that approved benefit fund; and

       (c)          may make transfers (which exclude surplus, but may include any fees) from that fund to the management fund only if the approved benefit fund rules of the fund provide expressly for such transfers.

    13.  For the purposes of modified subsection 56(3) of the Act, a friendly society, with respect to a defined benefit fund may, in accordance with its approved benefit fund rules, allocate or distribute any surplus to one or more of the following:

       (a)          the members of the approved benefit fund; or

       (b)          the management fund; or

       (c)          another approved benefit fund of the society.

Seed capital
    14.  Subject to paragraph 15, a friendly society may transfer an amount from the management fund to an approved benefit fund with prior written approval from APRA. Such an amount is 'seed capital' and may be included in the net assets of an approved benefit fund under LPS 112 for the purposes of meeting the requirements of LPS 110 for the approved benefit fund.

    15.  A friendly society must not repay seed capital from an approved benefit fund to the management fund:

       (a)          unless the approved benefit fund, after any such repayment, continues to meet the requirements of LPS 110 and LPS 112; and

       (b)          if any interest paid to the management fund in relation to the seed capital exceeds the earning rate of the approved benefit fund during the period when the seed capital forms part of the approved benefit fund.

    16.  Any seed capital that is a receivable from an approved benefit fund must be deducted from the net assets of the management fund in accordance with LPS 112.

Provision of financial benefits
    17.  Subject to paragraph 18, a friendly society must not pay, or provide for the payment of, amounts to which a member or any other person may be, or may become entitled to, because of contributions or payments made to the friendly society (whether by that member or person or by another person) unless the friendly society:

       (a)          maintains an approved benefit fund for the receipt of such contributions and payments; and

       (b)          pays those amounts as benefits from the approved benefit fund.

    18.  Paragraph 17 does not apply to amounts payable by a friendly society:

       (a)          in respect of shares of the friendly society; or

       (b)          as trustee for a superannuation entity within the meaning of the Superannuation Industry (Supervision) Act 1993.

Joint investments of approved benefit funds
    19.  A friendly society may only invest assets of two or more approved benefit funds in a single 'joint investment' if it does so in accordance with subsection 16H(4A) of the Act and paragraphs 20