This proposed regulation is intended to implement the relevant Bereavement Sector Advisory Committee's (BSAC) recommendations (*pdf).
If adopted, this draft regulation would work in conjunction with the Act, and in particular Part VI, entitled "Trust Accounts". Together with the Act, it would replace and expand upon the provisions in the current Cemeteries Act (Revised) (CA) and the Funeral Directors and Establishments Act (FDEA).
The draft regulation, in conjunction with the Act, addresses rules for how an operator is to trust monies received from a purchaser. The rules around trusting of monies are intended to provide consumers with a high level of protection.
To reduce the impact of new trusting rules on operators currently governed by the CA and FDEA, the draft regulation provides some flexibility in how monies may be held in trust and retains the two existing trust models.
The draft regulation sets out where money may be placed in trust, the types of trust instruments, when money must be deposited into and when it may be taken out of trust, and who may use a pooled trust fund and under what circumstances. In addition, this draft regulation proposes special rules for how money received for future interment or scattering rights must be trusted.
Care and maintenance funds will be addressed in the Taxation and Care and Maintenance Fund cluster of draft regulations.
The draft regulation should be reviewed together with sections 51, 52 and 56 of the Act, which also set out requirements for the trusting of monies received under the Act.
The Act allows capital gains realized from trust money to be disbursed in accordance with the regulations. The draft regulation does not include specific provisions outlining how capital gains may be dealt with. Ministry staff have set out a proposed direction on how to address capital gains in the attached Policy Intent document (*pdf). The draft regulations developed based on stakeholders´ comments on the policy intent will be released for public comment in conjunction with a subsequent cluster.