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SUPERANNUATION (CSS) FORMER ELIGIBLE EMPLOYEES AMENDMENT REGULATIONS 2005 (NO. 1) (SLI NO 205 OF 2005)
EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 205
Superannuation Act 1976
Superannuation (CSS) Former Eligible Employees Amendment Regulations 2005 (No. 1)
The Superannuation Act 1976 (the Act) makes provision for the Commonwealth Superannuation Scheme (CSS), which is an occupational superannuation scheme for Australian Government employees and for certain other persons.
Subsection 168(1) of the Act provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 126A of the Act provides that regulations may modify the provisions of that Act in relation to persons who cease to be eligible employees (CSS members) and immediately become members of another superannuation scheme. Regulations made under section 126A of the Act are contained in the Superannuation (CSS) Former Eligible Employees Regulations (the Principal Regulations) which modify the Act in various ways in relation to specified persons. The modifications are contained in a series of Schedules.
The Principal Regulations include modifications to the Act in respect of specified persons who have not ceased employment but have ceased to be CSS members upon joining another superannuation arrangement offered by their employer. The Principal Regulations provide that those persons are entitled to either deferred benefits or postponed benefits and also provide that those benefits are payable in different circumstances than apply to other persons under the Act.
Under the Act, deferred benefits may become payable in a number of circumstances, including on request after the person has reached minimum retiring age (generally age 55). Postponed benefits can become payable on the earlier of retirement from the workforce after minimum retiring age or upon the age of 65. The Act also provides that a benefit is not payable where the Superannuation Industry (Supervision) Act 1993 (the SIS Act) does not permit the payment of the benefit.
From 1 July 2005 regulations made under the SIS Act provide that pensions such as the deferred benefits pension payable under the Act can be paid where a person has reached their preservation age (without the need for the person ceasing to be employed). However persons specified in the relevant Schedules to the Principal Regulations would still be required to cease to be employed before their deferred benefits could become payable.
Under the Act, consistent with regulations under the SIS Act, postponed benefits become payable to a person on reaching age 65. In relation to certain persons specified in the relevant Schedules to the Principal Regulations their postponed benefits cannot become payable at age 65 unless they have ceased to be employed.
The purpose of the Regulations is to amend the Principal Regulations to allow persons specified in the relevant Schedules to access their benefits in the same circumstances as those which apply to other persons who have deferred benefits or postponed benefits as appropriate under the Act.
The Regulations:
· remove the restriction that persons specified in the Principal Regulations have to cease to be employed by their employer before deferred benefits can become payable; and
· remove the restriction that persons specified in the Principal Regulations have to cease to be employed by their employer before postponed benefits can become payable at age 65.
Details of the Regulations are set out in the Attachment.
Subsection 168(13) of the Act provides that regulations may not be made under the Act unless the CSS Board has consented to those regulations. However paragraph 168(13)(b) of the Act prescribes a number of exemptions where the CSS Board's consent is not required.
Subparagraph 168(13)(b)(i) exempts a regulation that relates to a payment that after the making of the regulation, will be required, or permitted, to be made under the Act by an employer-sponsor within the meaning of the SIS Act. The Commonwealth pays all benefits under the Act and is an employer-sponsor within the meaning of the SIS Act. As the Regulations relate solely to the payment of benefits under the Act, the CSS Board's consent to their making is not required.
The Act specifies no other conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Northern Territory (NT) Superannuation Office was consulted about the effect of the Regulations on NT employees and the NT Government. In the case of other bodies covered by the Regulations, they no longer exist, are no longer owned by the Commonwealth or the Regulations will have minimal (if any) impact. ComSuper, which administers the CSS on behalf of the CSS Board, was also consulted about the Regulations.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
ATTACHMENT
Details of the Superannuation (CSS) Former Eligible Employees Amendment Regulations 2005 (No. 1)
This regulation provides that the title of the Regulations is the Superannuation (CSS) Former Eligible Employees Amendment Regulations 2005 (No. 1).
This regulation provides that the Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
Regulation 3 – Amendment of Superannuation (CSS) Former Eligible Employees Regulations
This regulation provides that the Superannuation (CSS) Former Eligible Employees Regulations (the Principal Regulations) are amended as set out in Schedule 1.
Schedules 1, 2, 3, 4, 7, 8, 9, 9A, 10 and 10A to the Principal Regulations modify, one or more, particular sections of the Superannuation Act 1976 (the Act). These are sections 138, 139 and 110TB of the Act.
Section 138 of the Act sets out the circumstances when deferred benefits become payable to persons who cease to be CSS members after 1 July 1995 and have deferred benefits applicable.
In relation to those persons who ceased to CSS members before 1 July 1995 and had deferred benefits applicable, the circumstances in which those benefits become payable are governed by section 139 of the Act as it existed before it was amended by the Superannuation Legislation Amendment Act (No.1) 1995.
Section 110TB of the Act sets out the circumstances when postponed benefits become payable to CSS members.
Item [1] – Schedule 1 Modifications – Employees of Northern Territory
Item [1] amends Schedule 1 to the Principal Regulations to omit modified paragraphs 139(2)(c) to (e) of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 1 applies to Northern Territory (NT) employees employed before 1 October 1986 who have ceased to be CSS members by joining a NT superannuation scheme and are entitled to deferred benefits.
Item [2] – Schedule 2 Modifications – Members of Police Force of Northern Territory
Item [2] amends Schedule 2 to the Principal Regulations to omit modified paragraphs 139(2)(c) to (e) of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 2 applies to certain CSS members of the Police Force of the Northern Territory employed before 1 January 1988 who have ceased to be CSS members by joining a NT superannuation scheme and are entitled to deferred benefits.
Item [3] – Schedule 3 Modifications – Employees of Aerospace Technologies of Australia Pty Ltd
Item [3] amends Schedule 3 to the Principal Regulations to omit modified paragraphs 139(2)(c) to (e) of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 3 applies to certain CSS members who were employees of Aerospace Technologies of Australia Pty Ltd (Aerospace) before 1 March 1989 and who became members of the Aerospace Employees Superannuation Fund on or after that date or before 1 April 1989. On becoming a member of this superannuation fund they ceased to be CSS members and deferred benefits became applicable to them.
Item [4] – Schedule 4 Modifications – Employees of AIDC Ltd
Item [4] amends Schedule 4 to the Principal Regulations to omit modified paragraphs 139(2)(c) to (e) of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 4 applies to certain CSS members who were employed by AIDC Ltd before 20 November 1989 and on or after that date but before 22 December 1989 became members of either the Australian Industry Development Corporation Executive Superannuation Plan or the Australian Industry Development Corporation Staff Superannuation Plan. On becoming a member of one of these superannuation plans they ceased to be CSS members and deferred benefits became applicable to them.
Item [5] – Schedule 7 Modifications – employees of Australian Defence Industries Ltd
Item [5] amends Schedule 7 to the Principal Regulations to omit clauses 20 to 21 of the Act, which relate to the payment of deferred benefits under section 139 of the Act.
This removes the restriction that deferred benefits do not become payable to persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 7 applies to certain CSS members who were employees of Australian Defence Industries Ltd and who became a member of either the ADI Superannuation Fund or the Superannuation Trust of Australia between 21 December 1990 and 21 December 1991. On becoming a member of either of these superannuation arrangements they ceased to be CSS members and deferred benefits became applicable to them.
Item [6] – Schedule 8 Modifications – Employees of Coselco Mimotopes Pty Ltd
Item [6] amends Schedule 8 to the Principal Regulations to omit clauses 3 to 4 of the Act, which relate to the payment of deferred benefits under section 139 of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 8 applies to certain CSS members who were employees of Coselco Mimotopes Pty Ltd and who became a member of the Coselco Mimotopes Pty Ltd Superannuation Plan between 21 December 1990 and 21 December 1991. On becoming a member of this superannuation plan they ceased to be CSS members and deferred benefits became applicable to them.
Item [7] – Schedule 9 Modifications – former employees of repatriation institutions who cease to be eligible employees before 1 July 1995
Item [7] amends Schedule 9 to the Principal Regulations to omit modified clause 6 of the Act as a consequence of the amendments made by item [8].
Item [8] – Schedule 9 Modifications - former employees of repatriation institutions who cease to be eligible employees before 1 July 1995
Item [8] amends Schedule 9 to the Principal Regulations to omit modified clause 8 of the Act, which relates to the payment of deferred benefits under section 139 of the Act.
This removes the restriction that CSS deferred benefits do not become payable to applicable persons until they cease to be employed at a repatriation institution or in other State employment. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 9 applies to certain employees of repatriation institutions who were CSS members and who transferred to State employment and became a member of a State superannuation scheme before 1 July 1995.
On transfer of the Repatriation Hospitals and other Commonwealth repatriation institutions to State control, staff employed at those institutions were able to retain CSS membership or alternatively were able to join a superannuation scheme applicable to their State employment and cease CSS membership. On becoming a member of such a scheme they ceased to be CSS members and deferred benefits became applicable to them.
Item [9] – Schedule 9A Modifications - former employees of repatriation institutions who cease to be eligible employees on or after 1 July 1995
Item [9] amends Schedule 9A to the Principal Regulations to omit modified clauses 3 to 4 of the Act, which relate to the payment of deferred benefits under section 138 of the Act.
This removes the restriction that CSS deferred benefits do not become payable to applicable persons until they cease to be employed at a repatriation institution or other State employment. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 9A applies to certain employees of repatriation institutions who were CSS members and who transferred to State employment and became a member of a State superannuation scheme on or after 1 July 1995.
On transfer of the Repatriation Hospitals and other Commonwealth repatriation institutions to State control, staff employed at those institutions were able to retain CSS membership or alternatively were able to join a superannuation scheme applicable to their State employment and cease CSS membership. On becoming a member of such a scheme they cease to be CSS members and deferred benefits become applicable to them.
Item [10] – Schedule 10 Modifications – certain Northern Territory employees who cease to be eligible employees before 1 July 1995
Item [10] amends Schedule 10 to the Principal Regulations to omit modified clause 5 of the Act, which relates to the payment of postponed benefits under section 110TB of the Act.
This removes the restriction that postponed benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore postponed CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other postponed CSS members under the Act.
Schedule 10 applies to certain NT employees, who were CSS members, engaged in employment under a contract of service that is an Executive Contract of Employment, and became members of a superannuation scheme other than the CSS before 1 July 1995.
Item [11] – Schedule 10 Modifications – certain Northern Territory employees who cease to be eligible employees before 1 July 1995
Item [11] amends Schedule 10 to the Principal Regulations to omit modified clause 9 of the Act, which relates to the payment of deferred benefits under section 139 of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 10 applies to certain NT employees, who were CSS members, engaged in employment under a contract of service that is an Executive Contract of Employment, and became members of a superannuation scheme other than the CSS before 1 July 1995.
Item [12] – Schedule 10A Modifications - certain Northern Territory employees who cease to be eligible employees on or after 1 July 1995
Item [12] amends Schedule 10A to the Principal Regulations to omit modified clause 5 of the Act, which relates to the payment of postponed benefits under section 110TB of the Act.
This removes the restriction that postponed benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore postponed CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other postponed CSS members under the Act.
Schedule 10A applies to certain NT employees, who were CSS members, engaged in employment under a contract of service that is an Executive Contract of Employment, and became members of a superannuation scheme other than the CSS on or after 1 July 1995.
Item [13] – Schedule 10A Modifications - certain Northern Territory employees who cease to be eligible employees on or after 1 July 1995
Item [13] amends Schedule 10A to the Principal Regulations to omit modified clause 8 of the Act, which relates to the payment of deferred benefits under section 138 of the Act.
This removes the restriction that deferred benefits do not become payable to applicable persons until they cease to be employed by their relevant employer. Therefore deferred CSS benefits in relation to these persons will become payable in the same circumstances as those which apply to other CSS deferred benefit members under the Act.
Schedule 10A applies to certain NT employees, who were CSS members, engaged in employment under a contract of service that is an Executive Contract of Employment, and became members of a superannuation scheme other than the CSS on or after 1 July 1995.