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EMERGENCY SERVICES SUPERANNUATION (AMENDMENT) BILL 2005

                 PARLIAMENT OF VICTORIA

Emergency Services Superannuation (Amendment)
                   Act 2005
                                Act No.


                      TABLE OF PROVISIONS
Clause                                                                Page
  1.     Purpose                                                         1
  2.     Commencement                                                    2
  3.     Amendment of section 20C--Accrued benefits                      2
  4.     Amendment of section 20E--Death of contributor or police
         recruit                                                         6
  5.     Amendment of section 20G--Temporary pension for illness or
         injury                                                          6
  6.     Amendment of section 21B--Membership of ESSPLAN                 6
  7.     Amendment of section 21J--Beneficiaries Accounts                6
  8.     Amendment of section 25A--Taxation on benefits                  7
  9.     New section 25AA inserted--No detriment provision               7
         25AA. No detriment provision                                    7
  10.    New section 27A inserted--Unpaid lump sum benefits             10
         27A. Unpaid lump sum benefits                                  10
                          

ENDNOTES                                                                11




                                    i
551285B.I1-3/5/2005                         BILL LA INTRODUCTION 3/5/2005

 


 

PARLIAMENT OF VICTORIA A BILL to amend the Emergency Services Superannuation Act 1986 and for other purposes. Emergency Services Superannuation (Amendment) Act 2005 The Parliament of Victoria enacts as follows: 1. Purpose The purpose of this Act is to amend the Emergency Services Superannuation Act 1986-- (a) to enable the payment of certain benefits as a 5 lump sum on a taxed basis and enshrine the 84 multiple for benefits on an untaxed basis; (b) to improve the operation of the Act. 1 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 2 Act No. 2. Commencement This Act comes into operation on the day after the day on which it receives the Royal Assent. 3. Amendment of section 20C--Accrued benefits See: (1) After section 20C(2) of the Emergency Services 5 Act No. Superannuation Act 1986 insert-- 94/1986. Reprint No. 5 '(2AA) Sub-sections (1) and (2) apply for the as at 15 October purposes of calculating-- 2003 and (a) the relevant lump sum payable to a amending contributor who becomes entitled to a 10 Act No. 40/2004. benefit before 1 July 2005 under LawToday: section 20D, 20F, 20G, 20H, 20J www.dms. dpc.vic. or 20K; or gov.au (b) the relevant lump sum payable to a contributor who-- 15 (i) becomes entitled to a benefit on or after 1 July 2005 under section 20D, 20F, 20G, 20H, 20J or 20K to which a determination made under section 25A(3) applies; and 20 (ii) makes an election under sub- section (2AF); or (c) the relevant lump sum payable in accordance with section 20E. 2 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 3 Act No. (2AB) For the purposes of calculating the relevant lump sum payable to a contributor who-- (a) becomes entitled to a benefit on or after 1 July 2005 under section 20D, 20F, 20G, 20H, 20J or 20K to which a 5 determination made under section 25A(3) applies; and (b) does not make an election under sub- section (2AF)-- the accrued benefit of a contributor is the 10 sum determined in accordance with the formula-- (A + B) - C-- where-- "A" is the sum of the percentage of salary of 15 the contributor (accrual rate) dependent on the contribution level over the period of membership of the contributor in accordance with the Table in sub-section (2AC); 20 "B" is the sum of the percentage of salary of the contributor specified in sub-section (2AD); "C" is 107% of the amount of the total of "A" and "B" which is attributable to 25 any period of membership of the contributor during the period commencing 1 July 1988 and ending 30 June 2005. 3 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 3 Act No. (2AC) The Table referred to in sub-section (2AB) is-- Annual Annual Contribution accrual rate accrual rate rate by for each year for each year contributor as of of percentage of membership membership salary of the before 1 July after 1 July contributor 2005 2005 0 10 85 3 16 14 5 20 18 6 24 215 7 28 25 8 32 285 9 36 Not Applicable (2AD) For the purposes of the definition of "B" in sub-section (2AB), the sum of the percentage of salary of the contributor is the sum of-- 5 (a) the percentage of the salary of the contributor that is determined by the Board having regard to the period of membership and contributions of the contributor under any prior fund and 10 any benefits paid to the contributor from any prior fund; and (b) the percentage of the salary of the contributor that is determined by the Board having regard to any money or 15 assets transferred from an approved superannuation arrangement. 4 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 3 Act No. (2AE) For the purposes of sub-section (2AB), the accrued benefit of a contributor or the benefit paid under section 20K to a contributor must not exceed whichever is the lesser of-- (a) the sum of-- 5 (i) 75 times the salary of the contributor; and (ii) 107% of the amount of the total of "A" and "B" (within the meaning of sub-section (2AB)) 10 which is attributable to any period of membership of the contributor before 1 July 1988; or (b) 84 times the salary of the contributor. (2AF) A contributor who becomes entitled to a 15 lump sum benefit on or after 1 July 2005 under section 20D, 20F, 20G, 20H, 20J or 20K to which a determination made under section 25A(3) applies may within 60 days of becoming entitled to the lump sum 20 benefit-- (a) make a request for the whole of the lump sum benefit to be transferred to a beneficiary account established under section 21J; and 25 (b) elect in the form approved by the Board to have the benefit calculated in accordance with sub-sections (1) and (2) as a benefit to which a determination made under section 30 25A(3) does not apply.'. (2) In section 20C(2A) of the Emergency Services Superannuation Act 1986 after "(2)" insert "or (2AE)". 5 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 4 Act No. 4. Amendment of section 20E--Death of contributor or police recruit In section 20E(1) of the Emergency Services Superannuation Act 1986 omit "retirement". 5. Amendment of section 20G--Temporary pension 5 for illness or injury In section 20G(6) of the Emergency Services Superannuation Act 1986 after "(3)(b)" insert "(ii)". 6. Amendment of section 21B--Membership of 10 ESSPLAN For section 21B(4)(b) of the Emergency Services Superannuation Act 1986 substitute-- "(b) the person is employed on a basis which satisfies the requirements specified in Part 7 15 of the Superannuation Industry (Supervision) Regulations 1994 of the Commonwealth.". 7. Amendment of section 21J--Beneficiaries Accounts (1) In section 21J(2) of the Emergency Services Superannuation Act 1986 for "The" substitute 20 "Subject to sub-section (2A), the". (2) After section 21J(2) of the Emergency Services Superannuation Act 1986 insert-- "(2A) If an election has been made under section 20C(2AF), the whole of the lump sum 25 benefit is to be transferred to the beneficiary account.". (3) In section 21J(4) of the Emergency Services Superannuation Act 1986 for "14 days" substitute "60 days". 30 6 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 8 Act No. 8. Amendment of section 25A--Taxation on benefits In section 25A of the Emergency Services Superannuation Act 1986-- (a) in sub-section (6) for "an unreasonable" substitute "any"; 5 (b) in sub-section (9) omit "unreasonable"; (c) in sub-section (10) for "an unreasonable" substitute "any". 9. New section 25AA inserted--No detriment provision After section 25A of the Emergency Services 10 Superannuation Act 1986 insert-- '25AA. No detriment provision (1) In this section-- "actuary" means a person who is-- (a) a fellow or an accredited member 15 of the Institute of Actuaries of Australia; and (b) approved by the Minister; and (c) appointed by the Board as the actuary for the purpose of this 20 section; "affected member" means a person who becomes a contributor on or after 1 July 2005 and becomes entitled to a benefit part of which is subject to a 25 determination made under section 25A(3); "after-tax benefit" has the same meaning as it has in section 25A; 7 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 9 Act No. "detriment" means receiving a lesser amount of after-tax benefit than would have been received if the benefit had not been subject to a determination made under section 25A(3); 5 "post-June 1983 component" has the same meaning as it has in section 25A; "rebatable 27H amount" has the same meaning as it has in section 25A; "tax law" has the same meaning as it has in 10 section 25A; "taxed element" has the same meaning as it has in section 25A; "taxed" has the same meaning as it has in section 25A; 15 "untaxed" has the same meaning as it has in section 25A. (2) If, having received an application from an affected member in accordance with sub- section (3), the Board is satisfied that a 20 reduction in benefits has resulted in a detriment to the member in respect of a benefit which has become payable to the member, the Board may take such steps, including without limitation increasing the 25 benefit, as the Board considers necessary to avoid or compensate for that detriment. (3) An affected member may within 3 months of a benefit becoming payable from the Fund (or any longer period approved by the Board 30 if the Board considers that there are special circumstances) apply to the Board for a review of the amount of the benefit. 8 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 9 Act No. (4) The application must be in a form and contain and be accompanied by information required by the Board. (5) The Board must not consider an application for review under this sub-section on any 5 ground other than detriment. (6) In determining whether a detriment exists and the extent of that detriment-- (a) the Board must act on the advice of the actuary, given either generally or in any 10 specific case; and (b) the actuary must have regard to the following factors-- (i) the receipt by a member of a post- June 1983 component of the 15 benefit classified for the purposes of the tax law as a taxed element rather than as an untaxed element; and (ii) the rates of tax and the basis for its 20 assessment under the tax law as at the commencement of section 145 of the Public Sector Superannuation (Administration) Act 1993 in 25 respect of a benefit that becomes payable to a person aged 55 years or more; and (iii) any other matters the actuary considers relevant.'. 30 9 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 s. 10 Act No. 10. New section 27A inserted--Unpaid lump sum benefits After section 27 of the Emergency Services Superannuation Act 1986 insert-- "27A. Unpaid lump sum benefits 5 If any lump sum benefit is not paid within 14 days of the date of termination of service of a contributor, the unpaid benefit is deemed to yield net earnings at a net earning rate as the Board in its discretion considers 10 appropriate in the circumstances at that time from the date of termination of service until the date on which the lump sum benefit is paid or transferred to an account established under this Act at the request of the 15 contributor.". 10 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

Emergency Services Superannuation (Amendment) Act 2005 Endnotes Act No. ENDNOTES By Authority. Government Printer for the State of Victoria. 11 551285B.I1-3/5/2005 BILL LA INTRODUCTION 3/5/2005

 


 

 


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