Superannuation Legislation Amendment Act (No. 3) 1999 (Cth)

Superannuation Legislation Amendment Act (No. 3) 1999 Act No. 121 of 1999 as amended This compilation was prepared on 28 October 2003 [This Act was amended by Act No. 101 of 2003] Amendment from Act No. 101 of 2003 [Schedule 6 (item 31) repealed Schedule 2 (item 34) Schedule 6 (item 31) commenced on 8 October 1999] Prepared by the Office of Legislative Drafting, Attorney‑General's Department, Canberra Contents 1 Short title................................... 2 Commencement............................... 3 Schedule(s).................................. Schedule 1—Amendment of the Superannuation Industry (Supervision) Act 1993 relating to self managed superannuation funds Part 1—Regulation of self managed superannuation funds Part 2—Consequential changes to references to "APRA" Part 3—Transitional and saving provisions Schedule 2—Consequential amendments of other Acts Australian Prudential Regulation Authority Act 1998 Financial Institutions Supervisory Levies Collection Act 1998 Income Tax Assessment Act 1936 Superannuation (Excluded Funds) Supervisory Levy Imposition Act 1991 Superannuation (Excluded Funds) Taxation Act 1987 Superannuation (Resolution of Complaints) Act 1993 Superannuation Supervisory Levy Imposition Act 1998 An Act to amend the law relating to superannuation, and for related purposes [Assented to 8 October 1999] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Superannuation Legislation Amendment Act (No. 3) 1999. 2 Commencement (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent. (2) Items 29 and 54 of Schedule 1 commence on 1 April 2000. (3) Items 44 and 50 of Schedule 1 commence on 1 July 2000. 3 Schedule(s) Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Amendment of the Superannuation Industry (Supervision) Act 1993 relating to self managed superannuation funds Part 1—Regulation of self managed superannuation funds 1 Subsection 3(1) Omit "APRA and ASIC", substitute "APRA, ASIC and the Commissioner of Taxation". 2 Subsection 6(1) Omit "subsection (3)", substitute "subsections (3) and (4)". 3 Paragraph 6(1)(a) After "administration of", insert "the following provisions, to the extent that administration of the provisions is not conferred on the Commissioner of Taxation by paragraph (e)". 4 Subparagraphs 6(1)(a)(i) to (v) Omit "and". 5 Subparagraph 6(1)(a)(vi) Omit "and" (second occurring). 6 Subparagraphs 6(1)(a)(vii) to (xii) Omit "and". 7 Paragraph 6(1)(b) After "(d)", insert "or on the Commissioner of Taxation by paragraph (f)". 8 Subparagraph 6(1)(c)(v) Omit "and". 9 At the end of paragraph 6(1)(c) Add (but not as part of subparagraph (v)): to the extent that administration is not conferred on the Commissioner of Taxation by paragraph (e); and 10 At the end of subsection 6(1) Add: ; and (e) the Commissioner of Taxation has the general administration of the following provisions to the extent that they relate to self managed superannuation funds: (i) Parts 4, 5, 7 and 8; (ii) Part 12 (other than section 105); (iii) Parts 13 and 14; (iv) Part 15 (other than sections 126B to 126F); (v) Parts 16, 17 (other than section 140), 21, 24 and 25A; and (f) the Commissioner of Taxation also has the general administration of Parts 3 and 6 (other than section 60A) and section 105: (i) to the extent that they relate to self managed superannuation funds; and (ii) to the extent that administration is not conferred on ASIC by paragraph (d). 11 Subsection 6(2) Omit "to 31", substitute " 27, 28, 29 (other than section 332), 30 and 31". 12 Subsection 6(2) (note) Omit "16", substitute "10". 13 After subsection 6(2) (after the note) Insert: (2A) Powers and duties are also conferred by Parts 1, 25 (other than Division 3), 26 to 28, 29 (other than section 332) and 30 (other than section 342) on the Commissioner of Taxation for the purposes of the administration of the provisions he or she administers. Note: Generally, the Commissioner of Taxation is not referred to in these provisions, Regulator is used instead. (2B) Powers and duties are also conferred on APRA by section 332 for the purposes of the administration of provisions administered by APRA or by the Commissioner of Taxation. 14 At the end of section 6 Add: (4) Despite subsection (1): (a) if an entity is not a self managed superannuation fund on the last day of a year of income, APRA has (subject to any later application of this subsection) the general administration of subsections 40(1) and (2), in relation to the entity, in respect of the following: (i) the doing of anything after the end of that year of income, in relation to that year of income; (ii) the doing of anything after the end of that year of income, in relation to any previous year of income; and (b) if an entity is a self managed superannuation fund on the last day of a year of income, the Commissioner of Taxation has (subject to any later application of this subsection) the general administration of subsections 40(1) and (2), in relation to the entity, in respect of the following: (i) the doing of anything after the end of that year of income, in relation to that year of income; (ii) the doing of anything after the end of that year of income, in relation any previous year of income; and (c) the following rules apply in relation to the general administration of subparagraphs 42(1AA)(b)(ii) and (c)(ii), subsection 42(1AC), subparagraphs 42A(3)(c)(ii) and (d)(ii) and subsection 42A(4): (i) subject to subparagraph (ii), APRA has the general administration of those provisions; (ii) if another person or body is specified in regulations under subsection 19(4) in respect of a class of superannuation funds, that person or body has the general administration of those provisions to the extent that they relate to funds belonging to that class. 15 Subsection 10(1) (definition of excluded fund) Repeal the definition. 16 Subsection 10(1) (definition of excluded superannuation fund) Repeal the definition. 17 Subsection 10(1) (at the end of the definition of member of staff) Add: ; and (c) in relation to the Commissioner of Taxation—a taxation officer. 18 Subsection 10(1) (at the end of the definition of Regulator) Add: ; and (c) the Commissioner of Taxation if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by the Commissioner of Taxation. 19 Subsection 10(1) Insert: self managed superannuation fund has the meaning given by section 17A. 20 Subsection 10(1) Insert: taxation officer means: (a) a Second Commissioner of Taxation; or (b) a Deputy Commissioner of Taxation; or (c) an officer or employee of the Australian Public Service or of an authority of the Commonwealth performing duties in the Australian Taxation Office; or (d) a person engaged to provide services relating to the Australian Taxation Office. 21 At the end of section 10 Add: (3) Without limiting the meaning of the expression member in this Act, that expression, in relation to a self managed superannuation fund, includes a person: (a) who receives a pension from the fund; or (b) who has deferred his or her entitlement to receive a benefit from the fund. 22 After section 17 Insert: 17A Definition of self managed superannuation fund Basic conditions—funds other than single member funds (1) Subject to this section, a superannuation fund, other than a fund with only one member, is a self managed superannuation fund if and only if it satisfies the following conditions: (a) it has fewer than 5 members; (b) if the trustees of the fund are individuals—each individual trustee of the fund is a member of the fund; (c) if the trustee of the fund is a body corporate—each director of the body corporate is a member of the fund; (d) each member of the fund: (i) is a trustee of the fund; or (ii) if the trustee of the fund is a body corporate—is a director of the body corporate; (e) no member of the fund is an employee of another member of the fund, unless the members concerned are relatives; (f) no trustee of the fund receives any remuneration from the fund or from any person for any duties or services performed by the trustee in relation to the fund. Basic conditions—single member funds (2) Subject to this section, a superannuation fund with only one member is a self managed superannuation fund if and only if: (a) if the trustee of the fund is a body corporate: (i) the member is the sole director of the body corporate; or (ii) the member is one of only 2 directors of the body corporate, and the member and the other director are relatives; or (iii) the member is one of only 2 directors of the body corporate, and the member is not an employee of the other director; and (b) if the trustees of the fund are individuals: (i) the member is one of only 2 trustees, of whom one is the member and the other is a relative of the member; or (ii) the member is one of only 2 trustees, and the member is not an employee of the other trustee; and (c) no trustee of the fund receives any remuneration from the fund or from any person for any duties or services performed by the trustee in relation to the fund. Certain other persons may be trustees (3) A superannuation fund does not fail to satisfy the conditions specified in subsection (1) or (2) by reason only that: (a) a member of the fund has died and the legal personal representative of the member is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during the period: (i) beginning when the member of the fund died; and (ii) ending when death benefits commence to be payable in respect of the member of the fund; or (b) the legal personal representative of a member of the fund is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during any period when: (i) the member of the fund is under a legal disability; or (ii) the legal personal representative has an enduring power of attorney in respect of the member of the fund; or (c) if a member of the fund is under a legal disability because of age and does not have a legal personal representative—the parent or guardian of the member is a trustee of the fund in place of the member; or (d) an appointment under section 134 of an acting trustee of the fund is in force. Circumstances in which entity that does not satisfy basic conditions remains a self managed superannuation fund (4) Subject to subsection (5), if a superannuation fund that is a self managed superannuation fund would, apart from this subsection, cease to be a self managed superannuation fund, it does not so cease until the earlier of the following times: (a) the time an approved trustee of the fund is appointed; (b) 6 months after it would so cease to be a self managed superannuation fund. Subsection (4) does not apply if admission of new members (5) Subsection (4) does not apply if the reason, or one of the reasons, why the superannuation fund would cease to be a self managed superannuation fund was the admission of one or more new members to the fund. Extended meaning of employee in certain circumstances (6) For the purposes of this section, a member of a fund, who is an employee of an employer‑sponsor of the fund, is also taken to be an employee of another person (the other person), if the employer‑sponsor is: (a) a relative of the other person; or (b) either of the following: (i) a body corporate of which the other person, or a relative of the other person, is a director; (ii) a body corporate related to that body corporate; or (c) the trustee of a trust of which the other person, or a relative of the other person, is a beneficiary; or (d) a partnership, where: (i) the other person, or a relative of the other person, is a partner in the partnership; or (ii) the other person, or a relative of the other person, is a director of a body corporate that is a partner in the partnership; or (iii) the other person, or a relative of the other person, is a beneficiary of a trust, if the trustee of the trust is a partner in the partnership. Note 1: An effect of this subsection is that a fund will not be a self-managed superannuation fund if a member is employed by an employer-sponsor of the fund, and another member (who is not a relative) has a specified interest in that employer-sponsor: see paragraph (1)(e). An example of this would be where the employer-sponsor is a company of which another member is a director. Note 2: Another effect is that a fund will not be a self-managed superannuation fund if its single member is employed by an employer-sponsor of the fund in which the other trustee of the fund (who is not a relative) has a specified interest: see subsection (2). (7) Subsection (6) does not limit the meaning of the term employee. Regulations (8) For the purposes of this section: (a) a member of a fund is taken to be an employee of a person belonging to a class specified in the regulations for the purposes of this paragraph; and (b) despite subsections (6) and (7) and section 15A, a member of a fund is not taken to be an employee of a person belonging to a class specified in the regulations for the purposes of this paragraph. Meaning of relative (9) In this section: relative, in relation to an individual, means: (a) a parent, child, grandparent, grandchild, sibling, aunt, uncle, great‑aunt, great‑uncle, niece, nephew, first cousin or second cousin of the individual or of his or her spouse or former spouse; or (b) another individual having such a relationship to the individual or to his or her spouse or former spouse because of adoption or remarriage; or (c) the spouse or former spouse of the individual, or of an individual referred to in paragraph (a) or (b). Disqualified persons (10) For the avoidance of doubt, subsection (3) does not permit a person, in the capacity of legal personal representative of a disqualified person (within the meaning of section 120), to be a trustee of a self managed superannuation fund. 23 Subsection 18(1) Omit "Subject to section 18A, a", substitute "A". 24 After paragraph 18(1)(a) Insert: (aa) the fund is not a self managed superannuation fund; and 25 Section 18A Repeal the section. 26 Subsection 19(4) Omit "APRA", substitute "APRA, or such other body or person as is specified in the regulations,". 27 After subsection 19(4) Insert: Regulations (4A) Without limiting subsection (4), regulations for the purposes of that subsection may specify that notices are to be given to different persons or bodies in respect of different classes of superannuation funds. 28 At the end of subsection 21(2) Add: ; (c) a person must not be the trustee of a superannuation fund with fewer than 5 members (other than a self managed superannuation fund) unless the person is an approved trustee. 29 At the end of subsection 21(2) Add: ; (d) APRA may suspend or remove a trustee of a superannuation fund with fewer than 5 members (other than a self managed superannuation fund) if the trustee is not an approved trustee. 30 Part 4 (heading) Repeal the heading, substitute: Part 4—Trustee of superannuation entity to lodge annual returns with the Regulator 31 At the end of section 36 Add: Self managed superannuation funds (5) A superannuation entity is not required to lodge a return under this section in respect of a year of income if the superannuation entity was, at all times during the year of income, a self managed superannuation fund. 32 After section 36 Insert: 36A Trustee of self managed superannuation fund to lodge annual returns Lodgment (1) The trustee of a superannuation entity that was a self managed superannuation fund at any time during a year of income must, within the reporting period, or within such longer period as the Commissioner of Taxation allows, give to the Commissioner of Taxation a return under this section. Period for lodgment (2) The reporting period is the period that begins at the end of the year of income and whose length is: (a) prescribed by the regulations for the purposes of this paragraph; or (b) if the length of the period is not prescribed—specified for the purposes of this paragraph by the Commissioner of Taxation by notice in the Gazette. Form of return (3) The return must: (a) be in the approved form; and (b) contain such information as is required by the form in relation to the fund in respect of that year of income or in relation to another year of income, or both. Note: The approved form of return may require the trustee to set out the tax file number of the entity. See subsection 299U(2). Approvals (4) An approval given by the Commissioner of Taxation of a form of return for the purposes of this section may require or permit the return: (a) to be attached to, or physically to form part of, another document; and (b) to be given on a specified kind of data processing device or by specified electronic transmission, in accordance with specified software or other requirements. Signature when not lodged electronically (5) If the return is given to the Commissioner of Taxation other than by data processing device or by electronic transmission, the return must be signed by: (a) if the trustee is a body corporate—a director of the body corporate; or (b) if the trustee is a group of 2 or more individuals—at least one of those individuals. Signature when lodged electronically (6) If the return is given to the Commissioner of Taxation on a data processing device or by way of electronic transmission: (a) the return must contain the electronic signature of a person specified in the approved form; and (b) a hard copy of the return must be made and signed by: (i) if the trustee is a body corporate—a director of the body corporate; or (ii) if the trustee is a group of 2 or more individuals—at least one of those individuals. The hard copy need not be given to the Commissioner of Taxation, but must be kept by a person referred to in paragraph (b) for a period of 10 years beginning on the date on which it was signed. (7) A person who intentionally or recklessly contravenes this section commits an offence punishable on conviction by a fine not exceeding 50 penalty units. (8) A notice under paragraph (2)(b) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. 33 At the end of subsection 42(1) Add: ; and (c) the entity was not a self managed superannuation fund at any time during the year of income. 34 After paragraph 42(1AA)(d) Insert: (da) the entity was not a self managed superannuation fund at any time during the year of income; and 35 After paragraph 42(1AC)(f) Insert: (fa) the entity was not a self managed superannuation fund at any time during the year of income; and 36 After subsection 42(1A) Insert: Note: The culpability test is still relevant to a fund that has been a self managed fund during only part of a year of income—see subparagraph 42A(2)(b)(ii), paragraph 42A(3)(g) and subparagraph 42A(4)(f)(ii). 37 At the end of section 42 Add: (3) If a person or body is specified in the regulations for the purposes of subsection 19(4), a reference to APRA in subparagraph (1AA)(b)(ii) or (c)(ii) or subsection (1AC) of this section is taken to be a reference to that person or body. 38 After section 42 Insert: 42A Complying superannuation fund—fund that has been a self managed superannuation fund at any time during a year Entity that was a self managed superannuation fund throughout a year of income (1) An entity that was a self managed superannuation fund at all times during a year of income is a complying superannuation fund in relation to that year of income for the purposes of this Division if: (a) either: (i) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence; or (ii) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence other than a time, before it became a resident regulated superannuation fund, when the entity was a resident approved deposit fund; and (b) the entity passes the test in subsection (5) in relation to the year of income. Entity that was a self managed superannuation fund during only part of a year of income (2) An entity that was a self managed superannuation fund during a part or parts of a year of income is a complying superannuation fund in relation to that year of income for the purposes of this Division if: (a) either: (i) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence; or (ii) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence other than a time, before it became a resident regulated superannuation fund, when the entity was a resident approved deposit fund; and (b) both: (i) the entity passes the test in subsection (5) in respect of the part or parts of the year of income during which the entity was a self managed superannuation fund; and (ii) if the trustee contravened this Act or the regulations in relation to the entity in respect of any other part or parts of the year of income—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions. Funds coming into existence during year of income etc. (3) An entity that: (a) is a superannuation fund that came into existence during the year of income and at that time or later in the year of income became a self managed superannuation fund; or (b) was a resident approved deposit fund that became a superannuation fund during the year of income; is also a complying superannuation fund in relation to the year of income if: (c) the entity complied with subsections 19(2) to (4): (i) within 60 days after the day on which it came into existence or became a superannuation fund, as the case may be; or (ii) within such further period, if any, as APRA (whether before or after the end of the period of 60 days) allows; and (d) either of the following conditions is satisfied: (i) the trustee did not contravene this Act or the regulations in relation to the entity during the whole of the period (the pre‑lodgment period) that began when the entity came into existence or became a superannuation fund, as the case may be, and ended when the entity complied with subsections 19(2) to (4); (ii) the trustee contravened this Act or the regulations in relation to the entity during the pre‑lodgment period on one or more occasions but the trustee satisfies APRA that, because of special circumstances that existed in relation to the fund during the pre‑lodgment period, it would be reasonable for the fund to be treated as if it had satisfied this Act and the regulations; and (e) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the pre‑lodgment period; and after the pre‑lodgment period: (f) the entity passed the test in subsection (5) in respect of the part or parts of the year of income, occurring after the pre‑lodgment period, during which the entity was a self managed superannuation fund; and (g) if the trustee contravened this Act or the regulations in relation to the entity in respect of any part or parts of the year of income, occurring after the pre‑lodgment period, during which the entity was not a self managed superannuation fund—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions. Trustee makes an election (4) An entity that was a self managed superannuation fund at some time, or at all times, during a year of income is also a complying superannuation fund in relation to the year of income if: (a) the trustee of the entity has purported to make an election under subsection 19(4); and (b) if, when the election was made, the requirements of subsections 19(2) to (4) are not complied with: (i) the requirements of subsections 19(2) to (4) (to the extent that they have not already been complied with) are complied with within 28 days after the trustee finds out (whether by written notice from APRA or otherwise) that they were not complied with, or within such further period, if any, as APRA (whether before or after the end of the period of 28 days) allows; and (ii) except where the trustee received written notice from APRA about the non‑compliance—the trustee tells APRA in writing of the compliance within 7 days after the requirements are complied with or within such further period, if any, as APRA (whether before or after the end of the period of 7 days) allows; and (c) either of the following conditions is satisfied: (i) the trustee did not contravene this Act or the regulations in relation to the entity during the whole of the period (the rectification period) that began when the trustee of the entity lodged the purported election under subsection 19(4) and ended when the entity complied with subsections 19(2) to (4); (ii) the trustee contravened this Act or the regulations in relation to the entity during the rectification period on one or more occasions but the trustee satisfies the APRA that, because of special circumstances that existed in relation to the fund during the rectification period, it would be reasonable for the fund to be treated as if it had satisfied this Act and the regulations; and (d) if the fund was in existence before the beginning of its 1994‑95 year of income—under regulations made for the purposes of section 50, the fund is treated as if it had satisfied the transitional superannuation fund conditions at all times during the period that began at the beginning of the fund's 1994‑95 year of income and ended when the trustee of the entity lodged the purported election under subsection 19(4); and (e) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the end of the rectification period; and (f) in respect of the part of the year of income occurring after the end of the rectification period, both: (i) the entity passed the test in subsection (5) in respect of the part or parts of the year of income occurring after the end of the rectification period, during which the entity was a self managed superannuation fund; and (ii) if the trustee contravened this Act or the regulations in relation to the entity in respect of any other part or parts of the year of income occurring after the end of the rectification period, during which the entity was not a self managed superannuation fund—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions. Circumstances in which entity passes the test in this subsection (5) An entity passes the test in this subsection in relation to a year of income or part of a year of income if: (a) the trustee did not contravene this Act or the regulations in relation to the entity during the year of income or the part of the year of income; or (b) if the trustee contravened this Act or the regulations in relation to the entity during the year of income or the part of the year of income, the Regulator, after considering: (i) the taxation consequences that would arise if the entity were to be treated as a non‑complying superannuation fund for the purposes of Part IX of the Income Tax Assessment Act 1936 in relation to the year of income concerned; and (ii) the seriousness of the contravention; and (iii) all other relevant circumstances; thinks that a notice should nevertheless be given stating that the entity is a complying superannuation fund in relation to the year of income concerned. Determining whether contravention (6) In determining for the purposes of this section whether the Act or the regulations were contravened in respect of the entity in respect of the pre‑lodgment period or the rectification period, this Act and the regulations are taken to have applied in relation to the entity in respect of that period as if the entity were a resident regulated superannuation fund during that period. References to APRA (7) If a person or body is specified in the regulations for the purposes of subsection 19(4), a reference to APRA in subparagraph (3)(c)(ii), (3)(d)(ii), or subsection (4) is taken to be a reference to that person or body. 39 Subsection 58(1) Omit "an excluded fund", substitute "a superannuation fund with fewer than 5 members or an excluded approved deposit fund". 40 Subsection 59(1) Omit "an excluded fund", substitute "a self managed superannuation fund". 41 Subsection 60(1) Omit "an excluded fund", substitute "a self managed superannuation fund ". 42 Subsection 66(5) (paragraph (a) of the definition of acceptable percentage) Omit "an excluded superannuation fund", substitute "a superannuation fund with fewer than 5 members". 43 Subsection 101(1) Omit "an excluded superannuation fund, or of an approved deposit fund other than an excluded approved deposit fund", substitute "a self managed superannuation fund, or of an approved deposit fund". 44 After section 106 Insert: 106A Duty to notify Commissioner of Taxation of change in status of entity Trustee's duty to notify Commissioner of Taxation (1) The trustee of a superannuation entity must give written notice to the Commissioner of Taxation if the trustee: (a) has knowledge that the superannuation entity has ceased to be a self managed superannuation fund; or (b) has knowledge that the superannuation entity has become a self managed superannuation fund since first becoming a superannuation entity. Note: The trustee of a fund that was already a self managed superannuation fund when the trustee made an election under section 19 does not have to give a notice to the Commissioner of Taxation at that time, because the fund became a self managed superannuation fund before (not since) becoming a superannuation entity. Timing of notice (2) A notice under subsection (1) must be given as soon as practicable, and not later than 21 days, after the trustee first has knowledge that the superannuation fund has ceased to be, or has become, a self managed superannuation fund. Offence (3) A person who contravenes subsection (1) is guilty of an offence punishable on conviction by a fine not exceeding 100 penalty units. 45 Subsection 107(1) Omit "an excluded superannuation fund", substitute "a superannuation fund with fewer than 5 members". 46 Subsection 108(1) Omit "an excluded", substitute "a self managed". 47 Subsection 117(2) Omit all the words after "21 October 1992; and", substitute: (b) ending immediately before the day on which subsection (2A) commenced. 48 After subsection 117(2) Insert: Self managed superannuation funds (2A) This section does not apply to a self managed superannuation fund if, at all times after the day on which this subsection commenced when the fund was in existence, the fund was a self managed superannuation fund. 49 After section 121 Insert: 121A Person not to be trustee of certain small funds unless an approved trustee A person must not be, or act as, a trustee of a superannuation entity that is a superannuation fund with fewer than 5 members (other than a self managed superannuation fund) unless the person is an approved trustee. 50 At the end of section 121A Add: (2) A person who contravenes subsection (1) is guilty of an offence punishable on conviction by imprisonment for a term not exceeding 6 months. (3) An offence under subsection (2) is an offence of strict liability. 51 Subsection 123(1) Omit "an excluded fund", substitute "a self managed superannuation fund". 52 Section 125 Omit "an excluded fund", substitute "a self managed superannuation fund". 53 Sections 126 and 126A Omit "an excluded fund" (wherever occurring), substitute "a self managed superannuation fund". 54 At the end of subsection 133(1) Add: ; or (d) where the superannuation entity is a superannuation fund with fewer than 5 members (other than a self managed superannuation fund)—the trustee is not an approved trustee