Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT) 1991 NO. 445

STATUTORY RULES 1991 No. 445

Issued by authority of the Minister for Finance

Superannuation Act 1976

Superannuation (Former Eligible Employees) Regulations (Amendment)

The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme for certain Commonwealth employees and other persons.

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

Persons eligible to contribute under the Act are referred to as "eligible employees". The term "eligible employee" is defined in subsection 3(1) of the Act.

Section 126A of the Act provides that the regulations may modify the Act in its application to or in respect of a person who ceases to be an eligible employee and who immediately after ceasing, becomes a member of another superannuation scheme. Regulations for the purposes of section 126A of the Act are contained in the Superannuation (Former Eligible Employees) Regulations.

The Commonwealth provides health services to veterans and their dependants through the repatriation hospitals and other facilities. These repatriation hospitals and some other repatriation institutions are to be transferred to State control as part of the integration of veteran's health services with those of the States.

On transfer of the Repatriation Hospitals and other Commonwealth repatriation institutions to State control, staff employed at those institutions may transfer to State employment. These staff are at present employed under the Public Service Act 1922 and include persons who are eligible employees under the Act.

Eligible employees who transfer to State employment will continue, by virtue of amendments to the Superannuation (Continuing Contributions for Benefits) Regulations, to be eligible employees under the Act. They may, alternatively, join a superannuation scheme applicable to their State employment and cease to be eligible employees under the Act.

Where a person ceases to be an eligible employee under the Act, benefits would normally become payable. It is intended that those persons who have been eligible employees for more than one year and who join a State scheme, will have their benefits under the Act preserved. Preserved benefits would be paid as either:

•       a transfer value to the State scheme where that is an eligible scheme under the Act (presently only applicable to Queensland); or

•       a deferred benefit consisting of an indexed pension benefit and a refund of the members own contributions accumulated with interest or additional non-indexed pension benefits).

Staff who have been eligible employees for less than one year will receive a refund of their own contributions accumulated with interest.

The amended regulations provide that those transferred repatriation staff who have more than one year as eligible employees and join a State scheme will have their benefits preserved as set out above.

Where a deferred benefit is applicable that benefit will become payable in the same circumstances that are presently provided for in section 139 of the Act, but subject to the person having ceased State employment. Details of the proposed amendments are attached.

The amendments will come into affect on commencement of the Repatriation Institutions (Staff) Act.

ATTACHMENT

SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)

Regulation 13

This regulation provides that the amendments set out in schedule 9 will apply in respect of those persons who

•       have been eligible employees for more than one year;

•       are taken to have resigned from the Australian Public Service on accepting State employment offered in connection with transfer of a repatriation institution to that State; and

•       have become a member of a State scheme.

Schedule 9

Paragraph 1 modifies the Act by inserting a new section 80AA to clarify that a refund of member contributions with accumulated interest will not be available to these transferees.

Paragraphs 2 and 3 modify the Act by amending subsection 137(1) and omitting subsections 137(2) to (4) so that the transferees are treated as if they had elected for preserved benefits.

Paragraph 4 amends subsection 138(1) to ensure that a transfer value to a State scheme will be available even though transferees are continuing employment.

Paragraph 5 amends subsection 139 so that all transferees who have been taken to have elected for preserved benefits and in respect of whom a transfer value is not applicable are entitled to deferred benefits.

Paragraph 6 amends subsection 139(2) to ensure benefits are only payable where the additional provisions of section 139(2A) as set out in the schedule are also satisfied.

Paragraph 7 amends subparagraph 139(2)(b) so that deferred benefits will apply in the event of death whether or not transferees have completed 5 years of eligible employment or are employed in public employment at that time.

Paragraph 8 inserts new subsections 139(2A) and 2(B) to ensure that deferred benefits are not payable unless the transferee has ceased to be continuously employed within the State.

Paragraphs 9 and 10 modify the Act by omitting those provisions that would otherwise conflict with the availability of deferred benefits where a transferee has completed one year of eligible employment.