Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (DEFERRED BENEFITS) REGULATIONS (AMENDMENT) 1995 NO. 406

STATUTORY RULES 1995 No. 406

Issued by the Authority of the Minister for Finance

Superannuation Act 1976

Superannuation (Deferred Benefits) Regulations (Amendment)

The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to an occupational superannuation scheme, the Commonwealth Superannuation Scheme (the CSS), for Commonwealth employees and certain other persons. Members of the CSS are referred to in that Act as eligible employees.

Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of that Act.

The purpose of the Regulations is to enable the CSS to comply with the Superannuation Industry (Supervision) Act 1993 and the regulations under that Act (SIS). SIS provides a regulatory system for superannuation funds including public sector superannuation schemes such as the CSS. SIS provides, among other things, that a member's right or claim to accrued benefits must not be altered adversely to the member by amendment of the governing rules except in certain limited circumstances (eg to comply with other SIS rules).

Section 155C of the 1976 Act provides for the making of regulations under that Act to make such provision as is necessary for the purpose of enabling the CSS to satisfy any condition or requirement specified in SIS and certain other laws.

Prior to the amendments to the 1976 Act made by Superannuation Legislation Amendment Act (No. 1) 1995 (the amending Act), certain CSS members who had elected for preservation on cessation of membership and to whom deferred benefits had become applicable as a result, could request the payment of the deferred benefit on reaching minimum retiring age.

As part of the process of ensuring compliance with SIS, the 1976 Act was amended by the amending Act to ensure that the CSS Board may pay benefits only when such payments are permitted by SIS. These amendments inadvertently removed a right for payment of an accrued deferred benefit to certain former CSS members who have reached minimum retiring age by requiring that payment could only be made if they had reached age 55 and retired from the workforce.

However, SIS allows most components of deferred benefits to become payable at any time allowed by the scheme rules, if the person ceases current employment at the time of ceasing membership of the scheme. Therefore the amending Regulations amend the Superannuation (Deferred Benefits) Regulations (the Principal Regulations) to restore the right of a person whose cessation of membership coincided with change or cessation of employment to request the payment of a deferred benefit on attaining minimum retiring age.

The amending Regulations amend the Principal Regulations to insert a new regulation 4 to provide that sections 111A and 138 of the 1976 Act be read as if the provisions in these section restricting the payment of deferred benefits on or after minimum retiring age were omitted. This has the effect of restoring the right for certain former CSS members to have deferred benefits payable on request after attaining minimum retiring age, that was removed by the amending Act.

The amending Regulations also change the citation of the Principal Regulations to conform with the recently adopted method of citation for regulations under the 1976 Act. The new citation is "Superannuation (CSS) Deferred Benefits Regulations".

When section 155C was inserted in to the 1976 Act, it was agreed that any regulations made under that section would be followed by amending legislation as soon as possible. Accordingly, it is intended that the 1976 Act be amended in a similar way to the proposed regulations by the Superannuation Legislation Amendment Act 1996 which is proposed for introduction in the 1996 Autumn Sittings of Parliament.

The provisions in the amending Act concerning payment of deferred benefits apply in relation to any person who ceased to be a member of the CSS from 1 July 1995. In order to ensure that no removal of accrued rights occurs the amending Regulations commence from that date. A retrospective date of effect in respect of these regulations complies with subsection 48(2) of the Acts Interpretation Act 1901 in that the rights of the persons concerned are not affected in a manner prejudicial to them, neither are liabilities imposed on them.