Rule 309: No beneficiary interest in insurance and no employer claim on superannuation fund money
Rule 309 sets two protections. Rules 301 to 315 govern approved superannuation funds under Part B of Schedule XI to the Act. A beneficiary has no interest in an insurance policy taken out by the trustees and is entitled only to an annuity. No fund money may be received by the employer under any circumstances, and the employer cannot have any lien or charge on the fund.
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Bare law
Rule 309 - Beneficiary not to have any interest in insurance and employer not to have any interest in moneys of fund
(1) No beneficiary shall have any interest in any insurance policy taken out by the trustees under the rules of a fund and he shall be entitled only to an annuity from the fund.
(2) No money belonging to the fund shall be receivable by the employer under any circumstances nor shall the employer have any lien or charge on the fund.
Rule breakdown
Beneficiary: Rule 309(1)
No interest in any policy taken by trustees.
Entitled only to an annuity from the fund.
Employer: Rule 309(2)
Cannot receive fund money under any circumstances.
Cannot have any lien or charge on the fund.
Key takeaways
Annuity only
Beneficiary's right is to an annuity.
No employer claim
Employer cannot get money or a lien.
Absolute
"Under any circumstances".
Practical checklist
- Keep fund money separate from employer money.
Avoid
- Do not create any charge over fund assets in favour of the employer.
FAQs
Can the employer take back excess money?
No. Rule 309(2) bars the employer from receiving fund money under any circumstances.
Does the employee own the insurance policy?
No, the beneficiary has no interest in the policy and is entitled only to an annuity.
Is there a similar rule for gratuity funds?
Yes, Rule 324.
Glossary
- Lien
- A right to retain property as security.
- Beneficiary
- Defined in Rule 301(b).