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Superannuation Legislation Amendment Bill 2004

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2002-2003-2004

 

 

the parliament of the commonwealth of australia

 

 

house of representatives

 

 

 

superannuation legislation amendment bill 2004

 

 

explanatory memorandum

 

 (Circulated by the authority of the Minister for Finance and Administration, Senator the Hon Nick Minchin)

 



Superannuation legislation amendment bill 2004

general outline

This Bill includes amendments to the Superannuation Act 1976 (the 1976 Act) and the Rules for the administration of the Public Sector Superannuation Scheme made by trust deed under the Superannuation Act 1990 (the 1990 Act). 

The 1976 Act and the 1990 Act provide the rules for the Commonwealth Superannuation Scheme (CSS) and the PSS, respectively.  These schemes provide superannuation arrangements for Australian Government employees and office holders.

The Bill amends the provisions of CSS and the PSS in relation to the superannuation salary for Secretaries of Departments and certain other persons who are appointed to Australian Government offices and who are members of either scheme.  The amendments are being made to provide or to confirm that superannuation salary for these scheme members can be set in determinations that prescribe remuneration and other terms and conditions of appointment and which are made under certain Acts of Parliament. 

Proposed amendments

The Bill amends the 1976 Act and the PSS Rules to recognise that superannuation salary for the purposes of the CSS and the PSS can be provided for in determinations that set remuneration for Secretaries of Departments and other Australian Government office holders who are members of the CSS or the PSS.

The Bill also confirms the validity of any such determinations of superannuation salary for the purposes of the CSS and the PSS that have been made in the past under various Acts of Parliament.  However, this validation of past determinations will not reduce benefits already paid from the CSS or the PSS in respect of any person who was covered by those determinations.

 

Financial Implications

The Bill has no financial impact.

 

 

 



 notes on clauses

Clause 1 -Short title

Clause 1 provides for the short title of the Act to be the Superannuation Legislation Amendment Act 2004.

Clause 2- Commencement

2.       Clause 2 provides for the commencement of the Act on the day of Royal Assent.

Clause 3 - Schedule(s)

3.       Clause 3 provides that the Superannuation Act 1976 and the PSS Rules are amended as provided for in Schedules to the Act.

schedule 1 - amendment of the superannuation act 1976

The Superannuation Act 1976 (1976Act) provides for the Commonwealth Superannuation Scheme (CSS).

Item 1 - Annual rate of salary

4.       This item inserts subsections 5(3AB) and (3AC) into the 1976 Act.  Section 5 of the 1976 Act defines the term “annual rate of salary” for the purposes of the CSS.  Contributions to and benefits from the CSS are generally based on a CSS member’s annual rate of salary.

5.       Subsection 5(3AB) describes the circumstances in which new subsection 5(3AC) applies.  Those circumstances are where determinations of remuneration are made in respect of a person who is appointed under one of various Acts of Parliament and where the CSS member’s annual rate of salary can be ascertained under the determination.

6.       Subsection 5(3AC) provides that the annual rate of salary for the CSS in respect of a person whose remuneration is determined as described in subsection 5(3AB) can be an amount ascertained from that determination.  This subsection overrides subsection 5(2) and 5(3), which also provide for the annual rate of salary for the CSS for certain members.

Item 2 - Application

7.       Item 2 provides that item 1 applies in respect of a determination of the remuneration of a person where a Minister or the Presiding Officers as appropriate has made the determination whether that determination is made before or after the commencement of item 1.  This item is being made to validate the effect of any determination that has purported to set superannuation salary for these scheme members.

8.       Item 2 provides also that item 1 applies in respect of determinations made by the Remuneration Tribunal after the commencement of that section.  Determinations made by the Remuneration Tribunal before the commencement of that section were able to validly set superannuation salary for these scheme members pursuant to Regulations under the 1976 Act.

9.       Item 2 also provides that even though the amendments in item 1 refer to determinations made in the past this is not intended to reduce any benefits already paid from the CSS to or in respect of a person who was the subject of such a determination.

 

Schedule 2 - amendment of the rules for the administration of the public sector superannuation scheme

10.     The Rules for the administration of the Public Sector Superannuation Scheme (PSS) are made by deed under the Superannuation Act 1990 (1990 Act).

Item 1 - Definition of basic salary

11.     Item 1 amends Rule 1.2.1 by repealing the definition of “basic salary” and substituting a new definition of that term.  Generally, contributions to and benefits from the PSS are based on, or derived from, a member’s basic salary and any recognised allowances (see item 2).

12.     The new definition of basic salary provides that basic salary is an amount, or an element or elements of remuneration, determined in accordance with paragraph (a), (b), (c) or (d) of the definition, as appropriate.

13.     Paragraph (a) of this definition continues to recognise an amount, or an element or elements of remuneration, as basic salary where it is ascertained under the determination of basic salary made by the PSS Board under the Rules applicable at 30 June 1995 provided none of the other paragraphs in that definition apply.  Except where paragraph (c) or (d) applies, paragraph (b) continues to allow basic salary to be ascertained by reference to a determination made by the Minister for Finance and Administration under Rule 1.2.3.  There is no current determination by the Minister under this definition.

14.     Where Rule 1.2.4 applies in respect of a member, and unless paragraph (d) of this definition applies, paragraph (c) provides that basic salary means an amount ascertained under the determination referred to in that Rule which is applicable to the member.  However, paragraph (d) provides, that notwithstanding all other paragraphs in this definition, basic salary will continue to mean an amount agreed between the member and his or her designated employer if such an agreement is made.

Item 2 - Definition of recognised allowances

15.     Item 2 amends Rule 1.2.1 by repealing the definition of “recognised allowances” and substituting a new definition of that term.  As noted for item 1, contributions to and benefits from the PSS are based on, or derived from basic salary and any recognised allowances a member may have.

16.     The new definition of recognised allowances provides that these allowances are an amount, or an element or elements of remuneration, determined in accordance with paragraph (a), (b), (c) or (d) of the definition, as appropriate.

17.     Paragraph (a) of this definition continues to recognise an amount, or an element or elements of remuneration, as recognised allowances for a member where it is ascertained under the determination of recognised allowances made by the PSS Board under the Rules applicable at 30 June 1995 provided none of the other paragraphs in the definition apply.  Except where paragraph (c) or (d) applies, paragraph (b) continues to allow recognised allowances to be ascertained by reference to a determination made by the Minister for Finance and Administration under Rule 1.2.3.  There is no current determination by the Minister under this definition.

18.     Where Rule 1.2.4 applies in respect of a member, and unless paragraph (d) of this definition applies, paragraph (c) provides that recognised allowances means an amount ascertained under the determination referred to in that Rule.  However, notwithstanding all other paragraphs in this definition, paragraph (d) provides that recognised allowances will continue to mean an amount agreed between the member and his or her designated employer if such an agreement is made.

Item 3

19.     Item 3 inserts new Rules 1.2.3 and 1.2.4 at the end of Division 2 of Part 1 of the PSS Rules.  These Rules are required for the purposes of the new definitions of “basic salary” and “recognised allowances” inserted by items 1 and 2. 

20.     New Rule 1.2.3 applies in relation to a PSS member if the Minister for Finance and Administration determines basic salary or recognised allowances in relation to the member.

21.     New Rule 1.2.4 applies to a PSS member if they are appointed under an Act of Parliament and their basic salary or recognised allowances can be ascertained from a determination made under an Act in respect of their remuneration and, in respect of recognised allowances, the determination expressly mentions recognised allowances.  A Minister, the Presiding Officers within the meaning of the Parliamentary Services Act 1999 or the Remuneration Tribunal as appropriate, may make such determinations. 

Item 4 - Application

2.       Item 4 provides that items 1 to 3 apply in respect of a determination of the remuneration of a person where a Minister or the Presiding Officers as appropriate has made the determination whether that determination is made before or after the commencement of those items.  This item is being made to validate the effect of any determination that has purported to set superannuation salary for these scheme members.

3.       Item 4 provides also that items 1 to 3 apply in respect of determinations made by the Remuneration Tribunal after the commencement of those items.  Determinations made by the Remuneration Tribunal before the commencement of these items were able to validly set superannuation salary for these scheme members pursuant to a determination made by the PSS Board under the Rules applicable at 30 June 1995.

4.       Subitems 4(2) and 4(3) provide that, even though the amendments in items 1 to 3 refer to determinations made in the past this is not intended to reduce any benefits already paid from the PSS to or in respect of a person who was the subject of such a determination.