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Superannuation Legislation (Commonwealth Employment) Repeal and Amendment (Consequential Amendments) Bill 1998

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1998

 

 

the parliament of the commonwealth of australia

 

 

house of representatives

 

 

 

superannuation legislation (commonwealth employment) Repeal and amendment (Consequential amendments) bill 1998

 

 

explanatory memorandum

 

 (Circulated by the authority of the Minister for Finance and Administration, the Hon John J Fahey, MP)

 



 

general outline

This Bill includes amendments to five Acts.  The Acts to be amended are the Commonwealth Funds Management Limited Act 1990 (the CFM Act), the Defence Force Retirement and Death Benefits Act 1973 (the DFRDB Act), the Governor-General Act 1974 (the G-G Act), the Judges’ Pensions Act 1968 ( the Judges Act) and the Military Superannuation and Benefits Act 1991 (the MSB Act).

With the exception of the amendment to the CFM Act these Acts are being amended as a consequence of the changes to the Commonwealth’s superannuation arrangements proposed by the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill 1998 , the Commonwealth Superannuation Board Bill 1998 and the Superannuation Legislation (Commonwealth Employment - Saving and Transitional Provisions) Bill 1998 .

The CFM Act is being amended with retrospective effect to remove a provision that was overlooked when that Act was amended to remove provisions that became redundant or inapplicable on the sale of Commonwealth Funds Management Limited.

The DFRDB Act is being amended as a consequence of the abolition of the office of Commissioner for Superannuation to provide that the Chairman of the Defence Force Retirement and Death Benefits Authority is to be appointed by the portfolio Minister.  The Act currently provides that the Chairman of the Authority is the Commissioner.

The G-G Act and the Judges Act are being amended as a consequence of the repeal of the Superannuation (Productivity Benefit) Act 1988 .  The amendments provide safety net superannuation guarantee minimum support to the Governor-General and judges in circumstances where the benefit payable to or in respect of a Governor-General or a judge would be less than the Superannuation Guarantee minimum level of employer superanuation.

The G-G Act is also being amended to replace the office of Commissioner for Superannuation as the person who is authorised to make decisions about eligibility for a spouse’s benefit under that Act.

The MSB Act is being amended as a consequence of the abolition of the office of Commissioner for Superannuation, to ensure that ComSuper will continue to provide administration services to the Military Superannuation and Benefits Board for at least three years

Financial Implications

These amendments do not involve any additional Budget outlays.

 



terms used in explanatory notes

"1976 Act" means the Superannuation Act 1976 ;

"1990 Act" means the Superannuation Act 1990 ;

"Board Bill" means the Commonwealth Superannuation Board Bill 1997 ;

“CFM Act” means the Commonwealth Funds Management Limited Act 1990

"ComSuper" means the organisation called Commonwealth Superannuation   Administration;

"CS Board" or "Commonwealth Superannuation Board" means the Commonwealth Superannuation Board as provided for in the Board Bill;

"CSS" means the Commonwealth Superannuation Scheme;

“DFRDB Act” means the Defence Force Retirement and Death Benefits Act 1973

“G-G Act” means the G-G Act ;

“Judges Act” means the Judges’ Pensions Act 1968;

“DFRDB Act” means the Defence Force Retirement and Death Benefits Act 1973 ;

“MSB Act” means the Military Superannuation and Benefits Act 1991

MSB Board” means the Military Superannuation and Benefits Board of Trustees No.1

“PB Act” means the S uperannuation (Productivity Benefit) Act 1988;

"PSS" means the Public Sector Superannuation Scheme;

“PSS Fund” means the fund established for the purposes of the PSS by the Trust Deed for that scheme made purusant to section 4 of the 1990Act;

"Repeal and Amendment Bill" means the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Bill 1998;

"Saving and Transitional Bill" means the Superannuation Legislation (Commonwealth Employment - Saving and Transitional Provisions) Bill 1998 ;

“SG” means the Superannuation Guarantee (Administration) Act 1992

"SIS" means the Superannuation Industry (Supervision) Act 1993 including the regulations under that Act.



notes on clauses

Clause 1 -Short title

Clause 1 provides for the short title of the Act to be the Superannuation Legislation Commonwealth Employment) Repeal and Amendment (Consequential Amendments) Act 1998.

Clause 2- Commencement

2.       Clause 2 provides for the commencement of the Act on Royal Assent with the following exceptions:

a)       the amendment to the CFM Act contained in Schedule 1 will have effect from 23 December 1997, the date of the sale of CFM Ltd.;

b)       the amendments contained in Schedules 2 to 5 will have effect from 1 July 1999, being the date on which the new superannuation administration arrangements commence; and

Clause 3 - Schedules

2.       Clause 3 provides that the Acts specified in the Schedules are to be amended according to the applicable items set out in each of the Schedules.



schedule 1 - Amendment of the Commonwealth funds Management Limited Act 1990

Item  - Section 45

3.       Item 1 repeals section 45 of the CFM Act.  The repealed provision requires CFM to provide a copy of its annual return lodged under the Corporations Law to the Minister for Finance and Administration, who must place the return before each House of Parliament.  The provision ceased to be appropriate when CFM was sold, but was overlooked when various redundant provisions of the CFM Act were repealed or rendered inapplicable when CFM was sold.



Schedule 2 - Amendments to the Defence force retirement and death benefits act

Item 1 - Subsection 3(1) (definition of Commissioner for Superanuation)

4.       Item 1 replaces a reference to “Superannuation Act” with a reference to the “Superannuation Act 1976 as previously in force” as a consequence of the repeal of that Act with effect from 1 July 1999.

Item 2 - Subsection 3(1)

5.       Item 2 inserts a definition of “Commonwealth Superannuation Board”.

Item 3 - Paragraph 8(2)(a)

6.         Item 3 substitutes paragraph 8(2)(a) which provided that the Chairman of the Defence Force Retirement and Death Benefits Authority was the Commissioner for Superannuation as a consequence of the abolition of the office of Commissioner.  The replacement paragraph provides that the Chairman of the Authority is to be appointed by the Minister.

Items 4 and 5 - Subparagraph 36(1)(b)(i) and Section 61

7.       Items 4 and 5 omit references to the Commissioner for Superannuation that applied in relation to certain CSS benefits.  The Commonwealth Superannuation Board will undertake the functions of the Commissioner in these cases, and references to Commonwealth Superannuation Board are substituted by these items.

Item 6 - Paragraph 71(5A)(a)

8.       Item 6 inserts a reference to the Commonwealth Superannuation Board to describe correctly the mechanism for repaying refunded contributions after the abolition of the office of Commissioner for Superannuation.

 



schedule 3 - amendment of the governor-general act 1974

Item 1 - Subsection 2A(2)

9.       Item 1 inserts a definition of ”authorised person” in the G-G Act.

Item 2 - Subsection 2A(2) (definition of Commissioner)

10.   Item 2 provides for the repeal of the definition as a consequence of the abolition of the office of Commissioner for Superannuation.

Item 3 - Nomination of authorised persons

11.   Item 3 inserts section 2AA which provides that the Secretary to the Department of Prime Minister and Cabinet may nominate officers of that Department to perform the functions of an authorised person.

Items 4, 5, 6 and 8 - removal of obsolete references

12.   Items 4, 5, 6 and 8 provide for the omission of references to the Commissioner and the substitution of references to an authorised person in paragraph 2B(3)(b), subsection 2B(5), subparagraph 2C(b)(iii) and section 4A as a consequence of the abolition of the office of Commissioner for Superannuation.

Item 7 - Provision of Superannuation Guarantee minimum benefits in certain circumstances

13.   Item 7 inserts section 4AA as a consequence of the repeal of  the PB Act with effect from 1 July 1999.  From that date, section 4AA replaces provisions contained in the Superannuation (Productivity Benefit) (Qualified Employees and Alternative arrangements) Declaration No.1 of 1993.  That declaration ensures that where a Governor-General or a surviving spouse of a Governor-General dies on or after 1 July 1999 the amount of the total superannuation benefit paid in respect of the person’s service as Governor-General is at least equal to the minimum amount required by the SG to avoid any superannuation guarantee shortfalls.

14.   Subsection 4AA(1) provides that section 4AA applies if the Governor-General or a former Governor-General dies on or after 1 July 1999 without leaving a spouse, or if a former Governor-General has died leaving a spouse or spouses, and the spouse or the last surviving spouse dies on or after 1 July 1999.

15.   The amount of benefit payable under section 4AA to the personal representative of the deceased person is equal to:

·         the sum of all amounts that would have been required to be contributed on a monthly basis to a complying superannuation fund to avoid a superannuation guarantee shortfall under the SG if no other benefits were payable under the Act; plus

·         the amount of interest that would have accrued had those contributions been paid into the PSS Fund ; less

·         the amount of any other benefits paid under section 4 of the Act in respect of service as Governor-General.

16.   Subsection (4) provides that where a benefit is payable under subsection 4AA(2) to the personal representative of a person, and no personal representative of the person can be found, the amount is to be paid to any person or persons whom the Commonwealth Superannuation Board determines.

17.   Subsection (5) contains definitions of the terms “Commonwealth Superannuation Board”, “complying superannuation fund or scheme” and “individual superannuation guarantee shortfall”.

 



Schedule 4 - amendment of the judges’ pensions act 1968

Item 1

18.   Item 1 inserts section 12A in the Judges Act as a consequence of the repeal of the PB Act with effect from 1 July 1999.  From that date, section 12A replaces provisions contained in the Superannuation (Productivity Benefit) (Qualified Employees and Alternative Arrangements) Declaration No.1 of 1993 to ensure that benefits paid under the Judges Pensions Act after 1 July 1999 are at least equal to the minimum amount required by the SG to avoid any superannuation guarantee shortfalls.

19.   Subsection 12A(1) provides that section 12A applies where no pension is payable to a Judge who ceases to hold office on or after 1 July 1999, where a former Judge dies on or after 1 July 1999 leaving no surviving spouse or eligible child, or where a pension payable to a surviving spouse or spouses or an eligible child or eligible children ceases to be payable on or after 1 July 1999.

20.   The amount of benefit payable under section 12A to the person or the personal representative of the deceased person is worked out in accordance with subsections 12A(2 )and 12A(3), and is equal to:

·          the amount that would have been required to be contributed on a monthly basis to a complying superannuation fund to avoid a superannuation guarantee shortfall under the SG if no other benefits were payable under the Act; plus

·         the amount of interest that would have accrued had those contributions been paid into the PSS Fund; less

·         the amount of any benefits paid under the Judges Act to the person, any surviving spouse or eligible child.

21.   Subsection (4) provides that where a benefit is payable under subsection (2) to the personal representative of a person, and no personal representative of the person can be found, the amount is to be paid to any person or persons whom the Commonwealth Superannuation Board determines.

22.   Subsection (5) contains definitions of the terms “Commonwealth Superannuation Board”, “complying superannuation fund or scheme” and “individual superannuation guarantee shortfall”.

 



schedule 5 - amendment of the military Superannuation and Benefits act 1991

Item 1

23.   Item 1 repeals the definition of Commissioner contained in subsection 3(1) as a consequence of the abolition of the office of Commissioner for Superannuation with effect from 1 July 1999.

24.   Item 2 inserts section 26A which provides that for the three years commencing on 1 July 1999 the administration of the Military Superannuation and Benefits Scheme is to be undertaken on behalf of the MSB Board by one or more bodies nominated by an authorised person, or if there is no nominated body, by the Commonwealth. 

25.    This will ensure that from 1 July 1999 ComSuper will continue to provide administrative services for the scheme on behalf of the MSB Board.   ComSuper is not currently a legal entity and subclause 26A(1) covers the circumstances where ComSuper either remains in the same form or becomes an incorporated company or body corporate at some time.

26.    Subclause 26A(2) ensures that there is sufficiently flexibility for the administration of certain functions of the Board to be outsourced if required.

27.    Subclause 26A(3) makes it clear that a reference to scheme administration in the section does not include services in relation to the investment of scheme monies and the management of those investments.  The subclause also allows the authorised person and the Board to agree on other services that are not required to be provided by the nominated body.  This allows the Board to obtain specialised services such as legal advice from other service providers.  The provider or providers of these services remains a matter for the MSB Board.

28.    Subclause 26A(4) provides that the Minister may authorise a person to perform the functions of authorised person under the section.  Subclause 26A(5) enables an authorised person to make, in writing, determinations, nominations and approvals for the purposes of the section.

29.   Subclause 26A(6) defines two terms.  'Authorised person’ means the Minister or a person authorised by the Minister under subclause 26A(4).  ‘Nominated body’ means a body that has entered into an agreement or arrangement (that includes the level of charges involved) with the Commonwealth to provide the services described in subclause 26A(1) and has been nominated by an authorised person.

Item 3

30.   Item 3 repeals Part 7 which relates to the Commissioner for Superannuation.

Item 4 and 5

31.   Items 4 and 5 repeal paragraphs 47(1)(b) and (c) which provide indemnity for the Commissioner for Superannuation and staff of the Commissioner and therefore redundant, and inserts paragraph 47(1)(f) to provide indemnity to persons performing duties in connection with the administration of the Act.

Item 6

32.   Item 6 repeals paragraph 51(c) which allows the Minister for Finance and Administration to delegate powers to the Commissioner for Superannuation.