Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (PRODUCTIVITY BENEFIT) ALTERNATIVE ARRANGEMENTS (PRE-EXISTING ARRANGEMENTS WITH COMPLYING FUNDS) DECLARATION 1995 NO. 76

STATUTORY RULES 1995 No. 76

SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988 (THE ACT)

ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE

DECLARATION UNDER SECTION 4A OF THE ACT

The Superannuation (Productivity Benefit) Act 1988 (the Act) provides the mechanism by which the minimum level of employer superannuation contribution is made available to Commonwealth sector employees who have no other employer-sponsored superannuation coverage. The Act also provides superannuation arrangements for the Senior Executive Service and senior officers of the APS who elect to participate in the performance based pay superannuation arrangements.

Subsection 4A(1) of the Act allows the Minister to declare that a group of qualified employees is a specified class of employees who are neither fund employees nor interim arrangement employees (in effect a declared class of employees are outside the superannuation arrangements of the Act).

Subsection 4(A)2 of the Act allows the Minister to specify that particular superannuation arrangements (other than those provided under the Act) apply to the declared class of qualified employees.

This declaration has two purposes. Firstly, persons who have a pre-existing superannuation arrangement before taking up Commonwealth employment, and who make an election under this declaration, are declared to be a class of qualified employees under subsection 4A(1) of the Act.

Under subsection 4A(2) of the Act, employees with pre-existing superannuation arrangements may make an election to use any pre-existing superannuation arrangement for the purpose of receiving employer-sponsored superannuation contributions payable under the Act. To qualify, the pre-existing superannuation arrangement being nominated must be prepared to accept the superannuation contributions, and be a complying fund for the purposes of the Income Tax Assessment Act 1936.

The employee may, at any time, revoke the election to use the pre-existing superannuation arrangement and make a further election for one of any other pre-existing superannuation arrangements, the nominated fund (AGEST), or one of the other eleven approved funds under the Act.

Where an employee either does not make an election, or revokes an election without making a further election, the person becomes a member of AGEST. Any revocation of an election under this declaration must be made in writing and has effect from the day the notice is given.

The declaration commences from the commencement of the funded productivity superannuation arrangements under the Act on 1 July 1990. This would permit current AGEST members, (in addition to future members), who are still in Commonwealth employment to transfer their contributions made under the Act to any pre-existing superannuation arrangements. The retrospective effect of this declaration does not affect in a prejudicial manner the rights of any person other than the Commonwealth.