Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (CONTINUING CONTRIBUTIONS FOR BENEFITS) REGULATIONS (AMENDMENT) 1995 NO. 201

Statutory Rules 1995 No. 201

Issued by the Authority of the minister for Finance

Superannuation Act 1976

Superannuation (Continuing Contributions for Benefits) Regulations (Amendment)

The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme, the Commonwealth Superannuation Scheme (the CSS), for certain Commonwealth employees and other persons, including employees of approved authorities.

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

Persons eligible to contribute to the CSS (ie, CSS members) are referred to in the Act as eligible employees. In accordance with paragraph (ea) of the definition of "eligible employee" in subsection 3(1), the term includes a person to whom section 14A applies. Section 14A of the Act provides that regulations made under that section may specify a class of persons to whom the section applies and may fix a time at which the section ceases to apply to a person. Regulations for the purposes of section 14A are contained in the Superannuation (Continuing Contributions for Benefits) Regulations (the Principal Regulations).

The Superannuation Industry (Superannuation) Act 1993 and regulations under that Act (SIS) provide for a regulatory system for superannuation schemes which are regulated superannuation funds under that Act. The CSS will become a regulated superannuation fund for the purposes of SIS by 1 July 1995.

SIS provides for the compulsory cashing (that is, payment) of benefits as soon as practicable after a member of a regulated superannuation fund, who is not gainfully employed on a full-time basis, attains age 70. Generally, the Act does not allow for the payment of a benefit to a person before that person cease to be a CSS member.

To ensure that the CSS will comply with this SIS requirement, the Regulations amend the Principal Regulations to provide that a person to whom section 14A applies will cease to be a CSS member once SIS provides for the compulsory payment of any of the person's CSS benefits.

If contributions are required to be paid in respect of the person after that time as a result of an industrial award or agreement, and arc permitted by SIS, they will be paid to a superannuation scheme other than the CSS.

The opportunity has also been taken to amend the Principal Regulations to clarify certain existing provisions.

The amendments contained in the Regulations are explained in the Attachment.

The regulations commenced on 1 July 1995.

ATTACHMENT A

SUPERANNUATION (CONTINUING CONTRIBUTIONS FOR BENEFITS) REGULATIONS (AMENDMENT)

The details of the amending Regulations are as follows:

Regulation 1

The amending Regulations commence on 1 July 1995.

Regulation 2

This provides that the Superannuation (Continuing Contributions for Benefits) Regulations (the Principal Regulations) are amended as set out in the amending Regulations.

Regulation 3

This omits regulation 1 of the Principal Regulations (Citation) and substitutes a new citation for the Principal Regulations. The new citation is Superannuation (CSS) Continuing Contributions for Benefits Regulations.

Regulation 4

This amends regulation 2 of the Principal Regulations which is the interpretation provision.

Subregulation 4.1 omits the definition of "superannuation scheme" and substitutes a new definition to clarify the intention of the definition and make a technical change.

Generally, section 14A does not apply to a person if the person's employer contributes in respect of them to a superannuation scheme other than the CSS, Both the omitted definition and the new definition broadly describe a superannuation scheme as a superannuation or retirement benefits scheme applying to a person's employment, with certain exceptions.

The exceptions which were included in the omitted definition are included in the new definition. However, the new definition clarifies the intention that the definition does not include a scheme if membership of that scheme by a person is for the purpose of receiving a productivity benefit or other benefits which satisfy in whole or in part the employees obligations in respect of the person under the Superannuation Guarantee (Administration) Act 1992.

The omitted definition excluded the scheme provided for by deed under the Superannuation Act 1990 (the 1990 Act) (referred to as the "Superannuation Scheme") where a person is a member of that scheme in respect of other employment. The reference to that scheme in the new definition is changed to reflect the new name of the scheme the Public Sector Superannuation Scheme, as provided for in amendments to the 1990 Act by the Superannuation Legislation Amendment Act (No. 1) 1995.

Subregulation 4.2 omits subparagraph 2(2)(b)(ii) of the Principal regulations and substitutes a new subparagraph 2(2)(b)(ii).

Subregulation 2(2) defines the circumstances in which a person is taken to be a member of a superannuation scheme for top-up purposes. Generally, section 14A does not apply to a person if the person's employer contributes in respect of them to another superannuation scheme, this is not the case when membership of that scheme is for top-up purposes only. A person is a member of a scheme for top-up purposes if that membership results from a remuneration arrangement which allows employer superannuation contributions to be paid to another superannuation scheme (ie, a top-up arrangement) as well as the CSS in respect of the person and for certain other reasons.

The new subparagraph 2(2)(b)(ii) clarifies the intention of the subregulation that membership of a scheme for top-up purposes may include, as well as membership m a result of a top-up arrangement, membership for the purpose of receiving one or more of the following:

-       a productivity benefit; or

-       other benefits which satisfy in whole or in pan the employees obligations in respect of the person under the Superannuation Guarantee (Administration) Act 1992; or

-       a benefit based on contributions in relation to performance pay.

Subregulation 4.3 makes a technical amendment to subregulation 2(5) of the Principal Regulations as a consequence of the new definition of "superannuation scheme".

Regulation 5

This regulation amends regulation 4 of the Principal Regulations which sets the time when section 14A ceases to apply to a person. It adds new subregulation 4(12) which provides that a person will cease to be a person to whom section 14A applies at the end of the day immediately before any CSS benefits become payable to a person because of SIS requirements.