Mr SLIPPER (11:17 AM) —I move:

That the bill be now read a second time.

The Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill is one of a package of four bills that provide for new superannuation arrangements for Commonwealth civilian employees including closure of the existing partially funded defined benefit scheme to new employees. The bills also provide for new administrative arrangements for all existing schemes.

The other bills in the package are the Commonwealth Superannuation Board Bill 1998, the Superannuation Legislation (Commonwealth Employment—Saving and Transitional Provisions) Bill 1998 and the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment (Consequential Amendments) Bill 1998.

This main purpose of this bill is to ensure that the Commonwealth's civilian employees can participate in our choice of funds policy announced in the 1997 budget. This will give them greater control over, and flexibility in making, their superannuation arrangements.

At present, many Commonwealth employees are tied to membership of the Public Sector Superannuation Scheme (the PSS) or the closed Commonwealth Superannuation Scheme (the CSS). The bill will close the PSS to new members from 1 July 1999 and new employees will be able to choose from superannuation arrangements made available by their employers. From 1 July 2000, CSS and PSS members will, if they wish, be able to cease active membership and choose the alternative superannuation arrangements made available by their employers. The bill will provide for the entitlements of CSS members who exercise choice to be based on the resignation deferred benefit, but adjusted to ensure no increase in unfunded liabilities.

The bill will make a number of other amendments to various superannuation acts covering civilian employees. For example, it includes amendments to the Superannuation Act 1976 to allow CSS members to transfer amounts held in the Australian Government Employees Superannuation Trust or other funds to the CSS Fund. It will also amend that act to remove the current restrictions on the payment of reversionary benefits to a CSS pensioner's spouse or child from a post-retirement relationship with a pro rata payment where the relationship was short term. Similar changes are made in respect of spouses' benefits under the Parliamentary Contributory Superannuation Act 1948.

In addition, the bill provides for modifications to the superannuation redundancy entitlement arrangements for employees who cease to be CSS or PSS members as a result of a sale or outsourcing, in the terms announced in June 1997. In line with the operational date of the new preservation arrangements to apply to the general work force, the bill will provide for preservation from 1 July 1999 of the employer financed component of a CSS or PSS lump sum superannuation redundancy payment.

The bill will also amend the Superannuation Act 1976, with effect from 5 December 1997, to restore its original intention in relation to the acceptance of late elections for preservation of rights. The operation of this provision has been changed progressively by interpretations placed upon it by the Administrative Appeals Tribunal and the Federal Court. The changes included in the bill are designed to balance out the interests of the Commonwealth with the interests of current CSS members and former members who seek to make a late election.

Finally, to simplify and streamline the administration of our civilian superannuation arrangements, the bill includes amendments to simplify the operation of relevant legislation and subsequently repeals a number of acts applying to those arrangements. Savings and transitional provisions relating to these repealed acts are included in the Superannuation Legislation (Commonwealth Employment—Saving and Transitional Provisions) Bill 1998 contained in this package.

The Superannuation Legislation (Commonwealth Employment) Repeal and Amendment (Consequential Amendments) Bill 1998 amends various pieces of legislation as a consequence of amendments made by this bill. The other bill in the package, the Commonwealth Superannuation Board Bill 1998, will provide for new rationalised administration arrangements for the closed schemes and for the continued administration of the repealed Acts by a new board, the Commonwealth Superannuation Board.

Financial Implications

This bill will result in a net increase in budget outlays as a result of increased funding of future superannuation accruals. However, this will be offset by a reduction in future unfunded superannuation liabilities. The financial implications of the bill are explained in more detail in the explanatory memorandum. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Martin) adjourned.