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Emergency Services Superannuation
(Amendment) Bill
Introduction Print
EXPLANATORY MEMORANDUM
Clause Notes
Clause 1 states that the purpose of the Bill is to amend the Emergency
Services Superannuation Act 1986 to--
· enable the payment of certain benefits on a taxed basis;
· enshrine the 84 times multiple for benefits on an
untaxed basis;
· improve the operation of the Act.
Clause 2 provides for the commencement of the Act on the day after it
receives the Royal Assent.
Clause 3 inserts new provisions (sub-sections (2AA) to (2AF)) into
section 20C of the Emergency Services Superannuation Act
1986 to distinguish between benefits paid prior to 1 July 2005 on
an untaxed basis using the existing multiple and those paid on or
after 1 July 2005 on a taxed basis.
New sub-section (2AA) applies to members who receive their
benefit prior to 1 July 2005 on an untaxed basis using the existing
multiples and those paid on or after 1 July 2005 on a taxed basis
who make an election to transfer their benefit into the ESSS
Beneficiary Account on an untaxed basis.
New sub-section (2AB) applies to benefits paid after 1 July
2005 on a taxed basis and for members who do not elect to
transfer an untaxed benefit into the ESSS Beneficiary Account.
Benefits calculated under this section apply a new set of
multiples in accordance with the formula prescribed.
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New sub-section (2AC) provides the multiples used to calculate
benefits paid in accordance with the formula outlined in sub-
section (2AB).
New sub-section (2AD) also relates to the formula used in sub-
section (2AB), specifically, the sum of percentage of salary
determined by the Board with regard to certain factors including
any contributory membership to a prior fund and any amounts
transferred in from an approved superannuation arrangement.
New sub-section (2AE) specifically relates to section 20K
benefits paid after 1 July 2005. Such benefits must be the lesser
of 75 times salary plus a specified percentage of a sum based on
pre-1 July 1988 membership OR 84 times salary.
New sub-section (2AF) provides that a contributor paid a lump
sum benefit on or after 1 July 2005 may within 60 days of
becoming entitled to such benefit apply to have that benefit
transferred into the ESSS Beneficiary Account as a benefit paid
on an untaxed basis.
Sub-clause (2) amends section 20C(2A) of the Emergency
Services Superannuation Act 1986 to ensure that any amount
paid to a non-member spouse pursuant to the Commonwealth
Family Law Act 1975 is taken into account when calculating the
member's maximum benefit multiple.
Clause 4 makes a technical amendment to section 20E(1) of the
Emergency Services Superannuation Act 1986 to remove the
word "retirement" where the benefit paid is the accrued benefit.
Clause 5 inserts "(ii)" after "(3)(b)" in section 20G(6) of the Emergency
Services Superannuation Act 1986 to clarify the circumstances
in which the Board is released from making further payment of a
temporary pension for illness or injury or otherwise.
Clause 6 amends section 21B(4) of the Emergency Services
Superannuation Act 1986 to ensure consistency by referring
specifically to Part 7 of the Superannuation Industry
(Supervision) Regulations 1994. The amendment to section 21B
reflects the Commonwealth Government's superannuation
initiatives that allow for superannuation contributions up to the
age of 75 by members in certain circumstances and for mandated
employer contributions regardless of a member's age.
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Clause 7 sub-clauses (1) and (2) amend section 21J(2) of the Emergency
Services Superannuation Act 1986 and insert new section
21J(2A) as a consequence of the move to paying taxed benefits
and the amendments to section 20C. New sub-section (2A)
requires that if a member elects to transfer their benefit to the
ESSS Beneficiary Account, the whole benefit must be
transferred.
Sub-clause (3) amends section 21J(4) of the Emergency
Services Superannuation Act 1986 to extend the period to
60 days to reflect the choice exercisable pursuant to section
20C(2AF). At present, a member has 14 days from the date of
termination to provide instructions to the Board regarding
payment of their benefit before the default mechanism activates.
Clause 8 amends section 25A of the Emergency Services
Superannuation Act 1986 to remove the word "unreasonable"
in relation to the amount of detriment an affected member can
suffer prior to the Board taking action as outlined. The Board
can now compensate a member for any detriment.
Clause 9 inserts new section 25AA into the Emergency Services
Superannuation Act 1986, which mirrors the relevant
provisions of section 25A of that Act. This provision relates to
the calculation of detriment for members joining on or after
1 July 2005. New sections 25AA(1) to 25AA(6) mirror sections
25A(6) to 25A(10).
Clause 10 inserts a new section 27A into the Emergency Services
Superannuation Act 1986 which relates to the changes to
section 21J in clause 7. The new section 27A provides the
Board with the power to credit unpaid benefits with interest.
This power was previously drawn from 21J(4), however, the
new 60 day default period is inappropriate for this purpose.
The new section 27A will ensure that the unpaid benefit accrues
interest from the date of termination of service if not paid or
transferred within 14 days.
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