Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (PSS) MEMBERSHIP EXCLUSION DECLARATION 1995 NO. 217

STATUTORY RULES 1995 No. 217

Issued by the Authority of the Minister for Finance

Superannuation Act 1990

Declaration under paragraph 6(2)(c)

The Superannuation Act 1990 (the 1990 Act) makes provision for and in relation to an occupational superannuation scheme, known as the Public Sector Superannuation Scheme, the PSS, for Commonwealth employees and certain other persons.

Section 6 of the 1990 Act specifies the persons who are, or who may be, members of the PSS. In accordance with paragraph 6(2)(c), a person declared by the Minister for Finance to be a person to whom section 6 does not apply is not a member of the scheme. Declarations made under paragraph 6(2)(c) of the 1990 Act are cited as Superannuation (PSS) Membership Exclusion Declarations.

Section 45 of the 1990 Act provides that such a declaration is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 and a Statutory Rule for the purposes of the Statutory Rules Publication Act 1903.

The Declaration contained in the Statutory Rule and cited as "Superannuation (PSS) Membership Exclusion Declaration" simplifies and updates the existing membership exclusion arrangements by repealing all existing Superannuation (PSS) Membership Exclusion Declarations and incorporating the relevant provisions of those Declarations in a single updated instrument.

The updated Declaration does not exclude any persons who were members when the repealed Declarations operated. However, the updated Declaration makes a prospective addition to the classes of persons excluded from PSS membership to allow retirement benefits to be paid from the PSS when the Superannuation Industry Supervision Act 1993 and regulations under that Act provide for the compulsory payment of those benefits. The Declaration also enables the continued membership of certain persons on leave without pay who might otherwise previously have been excluded.

The details of the Declaration are described in the Attachment.

It is intended that future membership exclusions will be provided through amendments to this Declaration.

This Declaration commenced on 1 July 1995.

ATTACHMENT A

SUPERANNUATION (PSS) MEMBERSHIP EXCLUSION DECLARATION

CLAUSE 1

This clause provides that the Declaration may be cited as the Superannuation (PSS) Membership Exclusion Declaration (the Principal Declaration).

This citation differs from the citations of earlier Declarations made under paragraph 6(2)(c) of the 1990 Act which are repealed by the Principal Declaration (the repealed Declarations) (see clause 4 below). Former Superannuation (PSS) Membership Exclusion Declarations included a sequential number in their citation. The last Declaration made was the Superannuation (PSS) Membership Exclusion Declaration No. 12 (which amended the Superannuation (PSS) Membership Exclusion Declaration No. 4). As the Principal Declaration will be amended, as required, by future declarations the mode of citation has been made consistent with that applicable to Regulations.

CLAUSE 2

This clause provides that the Principal Declaration commenced on 1 July 1995.

CLAUSE 3

Subclause 3(1) defines terms commonly used in the Principal Declaration. The term "mobility allowance" is the only term used in the repealed Declarations which does not appear in the Principal Declaration, although other more descriptive terms have been used in place of terms previously used in the repealed Declarations. The omission of the definition of mobility allowance is explained below in relation to clause 5. New terms included in the Principal Declaration and terms that have been significantly amended are described below.

The term "performance pay" previously referred to a payment of that name under an agreement under Division 3A of Part VI of the Industrial Relations Act 1988, The Industrial Relations Reform Act 1993 repealed this Division and inserted alternative provisions which provide for an agreement under Part VIB of the Industrial Relations Act 1988. The new definition of performance pay refers to payments made under an agreement under both the current and former provisions of the Industrial Relations Act 1988.

The term "superannuation scheme" which was used in the repealed Declarations is revised in the Principal Declaration to clarify the intention of the definition.

A person is prohibited from becoming or remaining a PSS member where that person is a member of another employment related superannuation scheme (other than the PSS or the CSS in relation to other employment) with certain exceptions.

Some of these exceptions, which were included in the former definition of superannuation scheme, are included in the new definition. However, the new definition also 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 employer's obligations in respect of the person under the Superannuation Guarantee (Administration) Act 1992.

In accordance with later provisions of the Principal Declaration, membership of another superannuation scheme is also permitted for certain persons who are taken to be a member of that scheme for top-up purposes.

Subclause 3(2) provides that a person is taken to be a member of a scheme for top-up purposes if that person is a member of that scheme because of a top-up arrangement (defined in subclause 3(1)) or because of a top-up arrangement and certain other purposes. The term "top-up arrangement" was previously described in subclauses 3(3) and 3(4) of Superannuation (PSS) Membership Exclusion Declaration No. 4 as inserted by Superannuation (PSS) Membership Exclusion Declaration No. 7. Broadly, the term describes an arrangement whereby the employer of a PSS member pays contributions to a superannuation scheme other than the PSS on behalf of the employee and those contributions are part of the employee's overall remuneration package. This provision is intended to describe a salary sacrifice arrangement available to certain employees.

As is the case for the definition of "superannuation scheme", subclause 3(2) makes it clear that membership of another scheme will be for top-up purposes, among other circumstances, if it results from a top-up arrangement and is for the purpose of receiving a productivity benefit or other benefits which satisfy, in whole or in part, the employer's obligations in respect of the person under the Superannuation Guarantee (Administration) Act 1992.

Subclause 3(3) replaces subclause 3(5) of Superannuation (PSS) Membership Exclusion Declaration No. 4. This is a technical provision which modifies the definition of "superannuation scheme" as used for determining "top-up purposes" in subclause 3(2) by including certain superannuation arrangements that would otherwise be excluded from the definition. This subclause has been varied as a consequence of other changes to the Principal Declaration but the meaning has not been changed.

CLAUSE 4

Subclause 4(1) provides that a person described in the Schedule is not a PSS member.

Subclause 4(2) replaces subclause 4(2) of the Superannuation (PSS) Membership Exclusion Declaration No. 4 as inserted by the Superannuation (PSS) Membership Exclusion Declaration No. 12. This subclause refers to the same item (although renumbered) in the Principal Declaration.

CLAUSE 5

This clause repeals all existing Superannuation (PSS) Membership Exclusion Declarations. Those Declarations which continue to be relevant have been incorporated into the Principal Declaration.

The provisions of the repealed Statutory Rules 1992 No. 419, which contained Superannuation (PSS) Membership Exclusion Declaration No. 5, have not been incorporated in the Principal Declaration. Superannuation (PSS) Membership Exclusion Declaration No. 5 amended Declaration No. 4 in relation to certain persons in receipt of mobility allowance pursuant to a determination under section 82D of the Public Service Act 1922. It is not necessary to continue provisions relating to mobility allowance as the determination was never made and alternative arrangements have superseded the proposed mobility allowance arrangements.

SCHEDULE

Appendix A fists the provisions of the repealed Declarations and their equivalent item in the Schedule to the Principal Declaration. Where changes other than minor drafting changes have been made those changes are described below.

Items 3, 4, 8, 22, 23, 28 and 30

These items do not include the references to persons eligible to be paid a mobility allowance which were included in the equivalent provisions of the repealed Declarations (see clause 5 above).

Items 4 and 8

These items may exclude certain persons as PSS members where they are (or, in the case if item 4, are required to become) a member of a superannuation scheme. Previously, an exception was made for persons who were on a period of leave of absence without pay provided they were not also a contributing member of the PSS during this period. Generally, a person who took up alternative employment during leave without pay and joined a superannuation scheme relevant to that employment could not pay contributions to the PSS during the leave but did not cease to be a PSS member.

However, these previous arrangements could disadvantage persons who took up other employment during leave of absence without pay and who were required to join the scheme of their employer, eg, because of the requirements of an industrial award, by excluding them from PSS membership.

Therefore, to overcome this inequity, the provisions of the repealed Declarations reflected in items 4 and 8 have been revised to enable PSS membership to continue for persons on a period of leave of absence without pay.

Item 22

This item prohibits PSS membership for persons who hold a statutory office under any of the Acts listed in the item. Membership of the PSS has not been made available to the holders of certain statutory offices where alternative superannuation arrangements are available to them. Generally, this applies where PSS membership is not available to staff of the body to which that office relates.

This item replaces item 21 of the Schedule to the Superannuation (PSS) Membership Exclusion Declaration No. 4 but makes the following technical amendments which:

*       change the Australian National University Act 1946 (which has been repealed) to the Australian National University Act 1991 which provides for ANU statutory office holders;

*       omit the Commonwealth Serum Laboratories Act 1961 (the CSL Act). The CSL Sale Act 1993 resulted in the sale of Commonwealth Serum Laboratories (CSL) on 30 May 1994. Consequently, statutory office holders are no longer appointed under the CR Act

*       correct the reference to the Maritime College Act 1978.

Item 35

The Superannuation Industry (Supervision) 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 PSS will become a regulated superannuation fund for the purposes of SIS by 1 July 1995.

SIS requires 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 PSS Rules do not allow for payment of a benefit to a person before that person ceases to be a PSS member.

To ensure that the PSS can comply with this SIS requirement, this item provides that a person will cease to be a PSS member once SIS provides for the compulsory payment of any of the person's PSS 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 are permitted by SIS, they will be paid to a superannuation scheme other than the PSS.

APPENDIX A

REPEALED SUPERANNUATION (PSS) MEMBERSHIP EXCLUSION

DECLARATIONS - EQUIVALENT PROVISIONS IN PRINCIPAL DECLARATION

Principal Declaration	Former Provision in repealed Declarations
Item No(s)
Item 1	Clause 4 of Declaration No. 1
Item 2	Clause 4 of Declaration No. 3
Item 3 (see Attachment A)	Item 1 in the Schedule to Declaration No. 4
Item 4 (see Attachment A)	Item 2 in the Schedule to Declaration No. 4
Items 5 to 7	Items 3 to 6 respectively in the Schedule to Declaration No. 4
Item 8 (see Attachment A)	Item 7 in the Schedule to Declaration No. 4
Items 9 to 21	Items 8 to 20 respectively in the Schedule to Declaration No. 4
Item 22 (see Attachment A)	Item 21 in the Schedule to Declaration No. 4
Item 23 (see Attachment A)	Item 22 in the Schedule to Declaration No. 4
Items 24 to 27	Items 23 to 26 respectively in the Schedule to Declaration No. 4
Item 28 (see Attachment A)	Item 27 in the Schedule to Declaration No. 4
Item 29	Item 28 in the Schedule to Declaration No. 4
Item 30 (see Attachment A)	Item 29 in the Schedule to Declaration No. 4
Item 31	Clause 4 of Declaration No. 8
Items 32 and 33	Items 30 and 31 respectively in the Schedule to Declaration No. 4 (as inserted by clause 4.1 of Declaration No. 9)
Item 34	Item 32 in the Schedule to Declaration No. 4 (as inserted by clause 4.1 of Declaration No. 12)
Item 35 (see Attachment A)	New Item

Note: Declaration means Superannuation (PSS) Membership Exclusion Declaration