Focus on the Superannuation act 2000
The Superannuation Act 2000, which was passed in November 2000, will have a significant impact on the existing coverage, operations, members access to funds and supervision of the superannuation industry in PNG.
The new Act:
- extends the requirement for mandatory contributions to all employees, including non citizens
- reduces the employee number threshold from 25 to 20
- removes the monopoly position of the NPF and facilitates the establishment of new superannuation funds
- requires corporate trustees, investment managers and fund administrators to be separate licensed companies, and to comply with ownership and control provisions.
- requires trustees of authorised superannuation funds to appoint licensed investment managers and fund administrators
- specifies the duties and liabilities of trustees and directors of license holders
- provides for the approval of investment guidelines by the Bank of PNG and prohibits certain investments, including loans to members
- contains provisions as to members rights, withdrawals and transfers between funds
- makes the Bank of PNG responsible for the licensing and prudential supervision of the superannuation industry
- establishes a Task Force to assist with the implementation of the Act.
Although the strengthened regulatory and supervisory provisions are welcomed, the extension of the mandatory contributions to all employees, restrictions on members withdrawals, and prohibition of loans to members may cause some concerns. We also consider that superannuation taxation needs to be addressed, as the current tax regime does not encourage superannuation. This was not dealt with in the recent Taxation Review.
The Task Force established under the Act will consider a broad range of issues associated with the structure of the superannuation industry in PNG and they issued a discussion paper in November 2001 calling for public submissions. Commencement of the new Act is anticipated in early 2002.
PricewaterhouseCoopers are able to provide assistance on how the Act will impact you, whether as employee, employer, or superannuation provider.