The Government Actuary, in his latest newsletter, has backed off on his threat to deregister superannuation schemes that are being used for general savings purposes.
Under the legislation superannuation schemes can only be registered if they are used "principally for the purpose of retirement."
Earlier this year the actuary, Geoff Rashbrooke, said that many schemes were being used as general savings vehicles. That is many of the payments and benefits being made from the schemes were not related to retirement.
He controversially proposed a formula for determining whether or not a scheme met the requirements of the act.
However, he has now stepped back from that position.
"I am persuaded...that a numerical approach is unlikely to be as helpful as I had initially thought it could be," he says.
"I remain of the view that the use of an arrangement for accumulating savings can not of itself b take to mean that it is for the purpose of providing retirement benefits; the test is the extent of provision of benefits from the scheme to a beneficiary near or upon retirement, where retirement means cessation of significant participation in the paid labour force."
Despite backing off Rashbrooke plans to keep pressure on trustees and scheme administrators.
"I will however continue to require trustees to demonstrate that they are operating schemes in compliance with the principal purpose (that is, the schemes are in fact principally providing benefits when retirement occurs from paid labour fore participation or, in the case of employer sponsored schemes, on permanent cessation of employment with the employer)."
Rashbrooke says he will be considering for main areas when it comes to determining if a scheme is meeting the "principally for retirement" part of the act. They are:
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