Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p12
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 12/76)
Character Range: 56281–60198

is not shown.
For the purposes of the examples, the following insurance arrangements are assumed.
       * The superannuation entity with only defined contribution members has insurance arrangements that involve taking on insurance risk and the entity fully reinsures those risks, giving rise to both insurance liabilities and assets of the entity.
       * The hybrid superannuation entity is acting as an agent in respect of the insurance arrangements it has in place for defined contribution members.  These insurance arrangements do not give rise to insurance liabilities and assets of the entity.  Some components of the benefits for defined benefit members are in the nature of insurance, but separate amounts are not presented in respect of those components.

Illustrative example I
As at 30 June 20XX, Defined Contribution Superannuation Plan (the Plan) has 425,301 members and is a public offer fund open to new members.  The Plan is a defined contribution style plan and, as such, members' accounts are credited or debited each year with contributions and a proportionate share of net investment income and expenses (including income tax expense) of the Plan.

Statement of Financial Position for Defined Contribution Superannuation Plan
as at 30 June 20XX

                                                    Note  $000
Assets
Cash                                                      240,510
Receivables                                               324,909
Units in unlisted cash management trusts                  4,921,700
Listed Australian shares held directly                    7,490,663
Units in international share trusts                       3,944,033
Units in unlisted property trusts                         1,269,828
Australian fixed interest securities held directly        4,212,948
Overseas fixed interest securities held directly          879,034
Property held directly                                    436,978
Reinsurance assets                                        6,458
Deferred tax assets                                       52,358
 Total assets                                             23,779,419

Liabilities
Payables                                                  (236,641)
Income tax payable                                        (148,561)
Deferred tax liabilities                                  (364,903)
Insurance liabilities                               A     (6,519)
Total liabilities excluding member benefits               (756,624)

Net assets available for member benefits                  23,022,795
Member benefits                                           (22,965,083)
Total net assets                                          57,712

Equity
Investment reserve                                  B     (1,655)
Operational risk reserve                            C     (56,057)
Total equity                                              (57,712)

Note A – Insurance contract liabilities

Members can elect to take out term life cover with the Plan up to a maximum of $500,000 per member.  The Plan uses the services of an actuary to determine its insurance contract liabilities who bases the calculations on relevant industry-focused mortality tables and the entity's own claims experience.  The entity has reinsured all of its direct insurance risks with EFG Reinsurance (Australia).

Note B – Investment reserve

The investment reserve comprises the difference between the cumulative amount of investment income (net of investment expenses) allocated to members' accounts compared to the cumulative investment income (net of investment expenses) earned.

Note C – Operational risk reserve

An operational risk reserve is required under Australian Prudential Regulation Authority Standards to maintain adequate financial resources to address potential losses arising from operational risks.  The Trustee has assessed a reserve of approximately 0.25% of