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SUPERANNUATION (CSS) CONTINUING CONTRIBUTIONS FOR BENEFITS REGULATIONS 2001 (NO. 1) 2001 NO. 230

STATUTORY RULES 2001 No. 230

Issued by the authority of the Minister for Finance and Administration

Superannuation Act 1976

Superannuation (CSS) Continuing Contributions for Benefits Regulations 2001 (No. 1)

The Superannuation Act 1976 (the Act) makes provision for, and in relation to, the Commonwealth Superannuation Scheme (CSS) which is an occupational superannuation scheme for Commonwealth employees and for certain other persons. Section 168 of the Act provides that the Governor-General may make regulations for the purposes of that Act.

Subsection 3(1) of the Act contains the definition of "eligible employee" which describes persons who may contribute to the CSS (ie CSS members). Paragraph (ea) of that definition includes persons to whom section 14A of the 1976 Act applies. Section 14A applies to certain persons described in that section, including persons specified in regulations pursuant to section 14A. Regulations pursuant to section 14A are contained in the Superannuation (CSS) Continuing Contributions for Benefits Regulations 1981 (the Principal Regulations).

Subsection 168(15) of the 1976 Act provides that Regulations for the purposes of section 14A may commence on a day not earlier than 12 months before their making. However, subsection 168(16) provides that if the contributions commenced earlier than 12 months before the making of the Regulations, the Regulations may commence from the earliest day that contributions have been accepted. (This provision was inserted into the 1976 Act in 1994 to ensure continuity of CSS membership for persons, such as these SAC Ltd employees, who would otherwise cease to be members because appropriate arrangements were not in place to provide continued membership. The retrospective nature of the Regulations ensures that the CSS members concerned suffer no disadvantage as a result.)

The purpose of the Regulations is to amend the Principal Regulations to provide that CSS members employed by the bodies specified in the Regulations continue to be CSS members subject to the conditions set out in the Regulations.

Former Federal Airports Corporation Employees

The Regulations will ensure the continued membership of the CSS for Federal Airports Corporations (FAC) employees who were transferred to:

•       Sydney Airports Corporation (SAC) Ltd on or after its establishment on  28 May 1998 (regulation 5 and schedule 1);

•       Bankstown Airport (BA) Ltd on or after its incorporation on 19 June 1998 (regulation 6 and schedule 1); or

•       Essendon Airport (EA) Ltd on or after that body was established on 1 July 1998 (regulation 7 and schedule 1).

The affected employees were CSS members while employed by FAC because they were covered by the mobility provisions contained in Divisions 2 and 3 of Part IV of the Public Service Act 1922. The Regulations will ensure continued CSS membership for the affected employees who have continued to contribute to the CSS in the belief that their CSS membership was unaffected by their change of employer. The Regulations ensure that while the affected employees continue to be employed by the respective organisation to which they were transferred and continue to contribute to the CSS, they remain members of the CSS.

These provisions will be taken to have commenced as follows:

•       on 28 May 1998 for FAC employees transferred to SAC Ltd;

•       on 19 June 1998 for FAC employees transferred to Bankstown Airport Ltd; and

•       on 1 July 1998 for FAC employees transferred to Essendon Airport Ltd.

The retrospective nature of these provisions ensures that the CSS members concerned suffer no disadvantage as a result of Regulations not being in place to provide membership before they were transferred.

Sydney Harbour Federation Trust (Schedule 2)

The Regulations will provide continuing membership of the CSS to employees of the Sydney Harbour Federation Trust (the Trust) who are CSS members immediately before commencing that employment or former members of the CSS or the superannuation scheme established under the Superannuation Act 1922 with rights of return to the CSS. The Trust will operate for a maximum period of 10 years.

The Regulations relating to the Trust will commence upon the commencement of the Sydney Harbour Federation Trust Act 2001.

Snowy Hydro Limited (Schedule 3)

Snowy Hydro Limited (SHL) is a company incorporated under the Corporations Law and its shareholders are the Commonwealth, New South Wales and Victoria. The Commonwealth will hold 13 per cent of the shares and will not control the company.

The Regulations provide that CSS members who are employed by the Snowy Mountains Hydro-electric Authority (SMHEA) when it is corporatised continue to be CSS members during their employment with SHL, except in certain specified circumstances.

The Regulations will specify the conditions that apply to the continuing membership of affected CSS members. Such membership will continue unless employment with SHL ceases or any person or entity other than the Commonwealth, New South Wales or Victoria becomes a shareholder of SHL or the member becomes a member of another superannuation fund providing employer superannuation support greater than the minimum required applying generally under the Superannuation Guarantee. Membership will also be contingent upon SHL paying the Commonwealth for the cost of benefits and administration in relation to its CSS members.

The Regulations relating to SHL will commence on the date of corporatisation of SMHEA. This occurs upon the repeal of the Snowy Mountains Hydro-electric Power Act 1949, which is effected by the commencement of section 59 of the Snowy Hydro Corporatisation Act 1997 (the Corporatisation Act).

Details of the Regulations are explained in the Attachment.

ATTACHMENT

SUPERANNUATION (CSS) CONTINUING CONTRIBUTIONS FOR BENEFITS AMENDMENT REGULATIONS 2001 (NO. 1)

Regulation 1

Regulation 1 provides that the Regulations are called the Superannuation (CSS) Continuing Contributions for Benefits Amendment Regulations 2001 (No. 1).

Regulation 2

Regulation 2 provides for the commencement of the Regulations.

Regulations 1 to 5 relating to the application of the Regulations to employees of Sydney Airports Corporation Ltd are taken to have commenced on 28 May 1998, being the date on which that body was corporatised.

Regulation 6 relating to the application of the Regulations to employees of Bankstown Airport Ltd is taken to have commenced on 19 June 1998, being the date on which that body was corporatised.

Regulation 7 relating to the application of the Regulations to employees of Essendon Airport commences on 1 July 1998, being the date on which that body was corporatised.

Schedule 1 relating to continuing membership for employees of SAC Ltd, BA Ltd and EA Ltd will commence on gazettal.

Schedule 2 relating to continuing membership for employees of Sydney Harbour Federation Trust commences on the commencement of the Sydney Harbour Federation Trust Act 2001.

Schedule 3 relating to continuing membership for employees of Snowy Hydro Ltd will commence upon the repeal of the Snowy Mountains Hydro-electric Power Act 1949, which is effected by the commencement of section 59 of the Snowy Hydro Corporatisation Act 1997.

Regulation 3

Regulation 3 provides that the Principal Regulations are amended in accordance with Schedules 1, 2, and 3.

Regulation 4

Regulation 4 provides a definition of the term "Regulations" for the purposes of regulations 5, 6 and 7.

Regulations 5, 6 and 7

Regulations 5 6 and 7 provide that the Superannuation (CSS) Continuing Contributions for Benefits Regulations 1981 (the `principal Regulations') are taken to have applied, from the applicable date mentioned in the relevant paragraph of regulation 2, as if they had included provisions to the effect of those inserted by Schedule 1, and as if references to provisions to the effect of the inserted provisions were included in appropriate places in the principal Regulations. Those regulations have retrospective effect, as allowed by subsection 168 (16) of the Superannuation Act 1976. However, those regulations are cast as application provisions, rather than providing for retrospective textual amendment of the Regulations. Other amendments made since 1998 have already changed the text in the areas affected; in these circumstances, retrospective textual amendment would also require the retrospective amendment of these amendments. The path taken avoids this problem.

The purpose of the application provisions is to allow the principal Regulations to apply to classes of persons mentioned in the inserted provisions from the date mentioned in the applicable paragraph of regulation 2. They cease to apply to an employee if a disqualifying event happened at any time after the date of retrospective commencement of the application provisions. Once actual textual amendments are made to the Regulations on the commencement of Schedule 1, the function performed by the application provisions is performed by the amended text of the Regulations. The application provisions are therefore expressed to cease to have effect on commencement of Schedule 1.

Schedule 1

Item 1 amends sub-subparagraph 3A(1)(v)(iii) (C) as a consequence of the insertion of paragraph 3A(1)(w) by item 2.

Item 2 inserts paragraphs 3A(1)(w), (x) and (y) which describe the classes of persons who continue to be CSS members during their employment with SAC Ltd, BA Ltd and EA Ltd.

Paragraph 3A(1)(w) provides continuing CSS membership for persons employed by SAC Ltd otherwise than on a casual or temporary part-time basis, and who were CSS members employed by the FAC immediately before commencing that employment, and who are not members of another superannuation scheme (except for top-up purposes).

Paragraph 3A(1)(x) provides continuing CSS membership for persons employed by BA Ltd otherwise than on a casual or temporary part-time basis, and who were CSS members employed by the FAC immediately before commencing that employment, and who are not members of another superannuation scheme (except for top-up purposes).

Paragraph 3A(1)(y) provides continuing CSS membership for persons employed by EA Ltd otherwise than on a casual or temporary part-time basis, and who were CSS members employed by the FAC immediately before commencing that employment, and who are not members of another superannuation scheme (except for top-up purposes).

Item 3 amends sub-subparagraph 3A(1A) as a consequence of the insertion of paragraphs 3A(1)(w), (x) and (y).

Item 4 amends subregulation 4(1A) as a consequence of the insertion of paragraphs 4(23), (24) and (25).

Item 5 inserts subregulations 4(23) (24) and (25) which describe circumstances which result in CSS membership of employees of SAC Ltd, BA Ltd and EA Ltd respectively ceasing and specifies when membership ceases in each circumstance.

Paragraph 4(23)(a) provides that membership continues by virtue of these amendments only while a member remains employed by SAC Ltd

Paragraph 4(23)(b) provides that membership ceases on the day immediately before the person joins another superannuation fund, as defined in the Principal Regulations, other than a scheme for top-up purposes.

Paragraph 4(23)(c) provides that membership ceases if and when Sydney Airports Corporation Ltd ceases to be a Commonwealth company within the meaning of the Commonwealth Authorities and Companies Act 1997.

Paragraph 4(24)(a) provides that membership continues by virtue of these amendments only while a member remains employed by BA Ltd.

Paragraph 4(24)(b) provides that membership ceases on the day immediately before the person joins another superannuation fund, as defined in the Principal Regulations, other than a scheme for top-up purposes.

Paragraph 4(24)(c) provides that membership ceases if and when the Commonwealth ceases to have a controlling interest in BA Ltd, whether that control is through SAC Ltd or otherwise.

Paragraph 4(25)(a) provides that membership continues by virtue of these amendments only while a member remains employed by EA Ltd.

Paragraph 4(25)(b) provides that membership ceases on the day immediately before the person joins another superannuation fund, as defined in the Principal Regulations, other than a scheme for top-up purposes.

Paragraph 4(25)(c) provides that membership ceases if and when EA Ltd ceases to be a Commonwealth company within the meaning of the Commonwealth Authorities and Companies Act 1997.

Item 6 amends Schedule 1 of the Principal Regulations which contains modifications of the 1976 Act that apply to certain persons who are members of the CSS by virtue of section 14A of that Act. This amendment is consequential to the amendments to Schedule 1 made by item 7.

Item 7 includes SAC Ltd, BA Ltd and EA Ltd as bodies that can be required to make payments to the Commonwealth in respect of their employees who are CSS members.

Schedule 2

Item 1 amends sub-subparagraph 3A(1)(y)(iii) (B) as a consequence of the insertion of paragraph 3A(1)(z) by item 2.

Item 2 inserts paragraph 3A(1)(z) which describes the class of persons who continue to be CSS members during their employment with the Sydney Harbour Federation Trust (the Trust). Affected persons are those who are employed by the Trust otherwise than on a casual or temporary part-time basis, and who immediately before commencing that employment were either CSS members, persons who had deferred benefits applicable from the CSS or under the 1922 Act, invalidity pensioners under the CSS or the 1922 Act or persons who have previously received transfer values from the CSS or under the 1922 Act which is available to be paid to the CSS (referred to in the 1976 Act and the regulations as a re-employed former contributor with preserved rights). The affected class of persons does not include a person who is a member of a superannuation scheme in relation to employment with the Trust, other than a scheme to which additional contributions are paid under a top up arrangement.

Item 3 amends sub-subparagraph 3A(1A) as a consequence of the insertion of paragraph 3A(1)(z).

Item 4 amends subregulation 4(1A) as a consequence of the insertion of paragraph 4(26).

Item 5 inserts subregulation 4(26) which describes circumstances which result in CSS membership of employees of the Trust ceasing and specifies when membership ceases in each circumstance.

Paragraph 4(26)(a) provides that membership continues by virtue of these amendments only while a member remains employed by the Trust.

Paragraph 4(26)(b) provides that membership ceases on the day immediately before the person joins another superannuation fund, as defined in the Principal Regulations, other than a scheme for top-up purposes.

Paragraph 4(26)(c) provides that membership ceases if and when the Trust ceases to be a Commonwealth authority within the meaning of the Commonwealth Authorities and Companies Act 1997.

Item 6 amends Schedule 1 of the Principal Regulations which contains modifications of the 1976 Act that apply to certain persons who are members of the CSS by virtue of section 14A of that Act. This amendment is consequential to the amendment to Schedule 1 made by item 7.

Item 7 includes the Trust as a body that can be required to make payments to the Commonwealth in respect of its employees who are CSS members.

Schedule 3

Item 1 inserts a definition of "SMHEA corporatisation date" in subregulation 2(1) that is linked to the date of corporatisation provided for in the Snowy Hydro Corporatisation Act.

Item 2 amends sub-subparagraph 3A(1)(z)(iii) (B) as a consequence of the insertion of paragraph 3A(1)(za) by item 3.

Item 3 inserts paragraph 3A(1)(za) which describes the class of persons who continue to be CSS members after corporatisation occurs. These are persons who were CSS members employed by the SMHEA immediately before corporatisation occurred and who become employees of SHL on corporatisation. Continuing membership is not provided where a CSS member becomes a member of another employer-provided superannuation scheme, other than a scheme for the purposes of providing supplementary benefits.

Item 4 amends sub-subparagraph 3A(1A) as a consequence of the insertion of paragraph 3A(1)(za).

Item 5 amends subregulation 4(1A) as a consequence of the insertion of paragraph 4(27).

Item 6 inserts subregulation 4(27) which describes circumstances which result in CSS membership of employees of SHL ceasing and specifies when membership ceases in each circumstance.

Paragraph 4(27)(a) provides that membership continues by virtue of these amendments only while a member remains employed by SHL.

Paragraph 4(27)(b) provides that membership ceases on the day immediately before the person joins another superannuation fund, as defined in the Principal Regulations, other than a scheme for top-up purposes.

Paragraph 4(27)(c) provides that membership ceases if any person or entity other than the Commonwealth, New South Wales or Victoria becomes a shareholder of SHL. This ensures that membership ceases if any part of SHL is sold.

Paragraph 4(27)(d) and (e) provide that continuing membership is contingent upon SHL continuing to make payments to the Commonwealth in respect of the benefits payable and costs of administration in respect of its CSS members. Should SHL cease to make these payments it would then be required to make separate superannuation arrangements for future superannuation entitlements for these employees in an alternative superannuation scheme that satisfies at least the minimum requirements applying generally under the Superannuation Guarantee.

Item 7 amends Schedule 1 as a consequence of the insertion of paragraph 159(1A)(x) by item 8.

Item 8 amends Schedule 1 of the Principal Regulations which contains modifications of the 1976 Act that apply to certain persons who are members of the CSS by virtue of section 14A of that Act. This amendment includes SHL as a body that the Minister for Finance and Administration can require to make payments to the Commonwealth, in relation to the cost of benefits and administration in respect of its employees who are CSS members