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This is a Bill, not an Act. For current law, see the Acts databases.
FUTURE FUND BILL 2005
2004-2005
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Future Fund Bill 2005
No. , 2005
(Finance and Administration)
A Bill for an Act about the Future Fund, and for
related purposes
Future Fund Bill 2005 No. , 2005 ii
Contents
Part 1--Introduction
2
1 Short
title ...........................................................................................2
2 Commencement.................................................................................2
3 Object ................................................................................................3
4 Simplified
outline ..............................................................................4
5 Definitions.........................................................................................4
6 Financial
assets..................................................................................8
7 Crown
to
be bound ............................................................................9
8 Extension
to
external Territories .......................................................9
9 Extra-territorial application ...............................................................9
Part 2--The Future Fund
10
10 Simplified
outline ............................................................................10
11 Establishment
of
the Future Fund....................................................10
12
Establishment of the Future Fund Special Account.........................10
13 Operation
of
the Future Fund ..........................................................10
Part 3--Investment of the Future Fund
12
14 Simplified
outline ............................................................................12
15
Objects of investment of the Fund...................................................12
16 Investment
of the Fund....................................................................12
17
Management of investments of the Fund.........................................13
18 Investment
Mandate ........................................................................13
19
Board to be consulted on Investment Mandate................................15
20
Compliance with Investment Mandate ............................................15
21
Board must not trigger the takeover provisions of the
Corporations Act 2001 ....................................................................16
22
Board must not have a significant stake in a foreign listed
company ..........................................................................................17
23 Borrowing........................................................................................18
24 Investment
policies..........................................................................18
25 Derivatives ......................................................................................19
26 Additional
financial assets...............................................................20
27 Securities
lending arrangements ......................................................20
28 Investment
managers .......................................................................20
29 Custody
of
securities .......................................................................21
30 Exemption
from taxation .................................................................21
31 Franking
credits...............................................................................22
32
Realisation of non-financial assets ..................................................22
iii Future Fund Bill 2005 No. , 2005
Part 4--The Future Fund Board of Guardians
24
Division 1--Introduction
24
33 Simplified
outline ............................................................................24
Division 2--Establishment and functions of the Future Fund
Board of Guardians
25
34
Establishment of the Future Fund Board of Guardians....................25
35 Board's
functions.............................................................................25
36 Board's
ordinary powers .................................................................25
37
Board is a body corporate................................................................25
38 Membership.....................................................................................26
39
Application of the Corporations Act 2001.......................................27
Division 3--Terms and conditions for Board members
28
40
Term of appointment and related matters for Board members ........28
41
Remuneration and allowances of Board members...........................28
42
Leave of absence of Board members...............................................28
43
Resignation of Board members .......................................................28
44
Termination of appointment of Board members..............................29
45
Other terms and conditions of Board members ...............................29
46 Acting
Board
members....................................................................29
Division 4--Meetings
31
47 Holding
of
meetings ........................................................................31
48
Who is to preside at a meeting.........................................................31
49 Quorum............................................................................................31
50 Voting..............................................................................................32
51 Records
of
meetings ........................................................................32
Division 5--Resolutions without meetings
33
52 Resolutions
without meetings..........................................................33
53 Record
of
resolutions.......................................................................33
Division 6--Reporting obligations
34
54
Nominated Minister may require Board to prepare reports or
give information ..............................................................................34
55
Keeping the responsible Ministers informed etc..............................35
Division 7--Duties of Board members etc.
36
56 Care
and
diligence--civil obligation ...............................................36
57 Good
faith--civil obligation............................................................36
58
Use of position--civil obligation.....................................................37
59
Use of information--civil obligation...............................................37
60 Good
faith--criminal offence..........................................................38
Future Fund Bill 2005 No. , 2005 iv
61
Use of position--criminal offence...................................................38
62
Use of information--criminal offence.............................................38
63
Compliance with statutory duties ....................................................39
64
Interaction of sections 56 to 62 with other laws etc.........................39
65
Reliance on information or advice provided by others ....................40
66
Consequences of breach of duty--additional effect of the
Commonwealth Authorities and Companies Act 1997.....................40
67
Insurance for certain liabilities of Board members ..........................41
Division 8--Conflict of interests
43
68
Material personal interest--Board member's duty to disclose ........43
69
Board member may give other Board members standing
notice about an interest....................................................................44
70
Interaction of sections 68 and 69 with other laws etc. .....................45
71 Restrictions on voting......................................................................45
72
Ministerial power to make declarations and class orders.................46
Part 5--The Future Fund Management Agency
48
Division 1--Introduction
48
73 Simplified
outline ............................................................................48
Division 2--Establishment and functions of the Future Fund
Management Agency
49
74
Establishment of the Future Fund Management Agency .................49
75 Functions
of
the Agency..................................................................49
Division 3--Management and staff of the Future Fund
Management Agency
50
76 Duties
of
the Chair...........................................................................50
77 Staff
of
the Agency..........................................................................50
78
Consultants and persons seconded to the Agency ...........................50
79
Chair not subject to direction by the Board on certain matters ........51
Division 4--Other provisions
52
80
Application of the Financial Management and
Accountability Act 1997...................................................................52
81 Annual
report...................................................................................52
82
Consultants and advisers to the Board.............................................53
Part 6--Miscellaneous
55
83 Nominated
Minister.........................................................................55
84
Miscellaneous receipts to be credited to the Fund Account.............55
85 Regulations......................................................................................55
v Future Fund Bill 2005 No. , 2005
Schedule 1--Credits of amounts, and transfers of
financial assets, to the Future Fund
56
Part 1--Introduction
56
1 Simplified
outline ............................................................................56
Part 2--Credits of amounts to the Future Fund
57
2
Credit of $18 billion to the Fund Account .......................................57
3
Credit of additional amounts to the Fund Account--
Ministerial determinations...............................................................57
4
Duration of subclause 3(1) determinations ......................................58
5
Credit of amounts to the Fund Account--gifts................................59
Part 3--Transfers of financial assets to the Future Fund
60
6
Transfers to the Fund--Commonwealth-owned financial
assets ...............................................................................................60
7
Transfers of financial assets to the Fund--gifts...............................62
8
Ministerial directions about transferred financial assets ..................62
9
Continuing effect of instruments relating to transferred
financial assets.................................................................................63
Schedule 2--Debits of amounts from the Future Fund
64
1 Simplified
outline ............................................................................64
2
Purposes of the Fund Account.........................................................64
3
Board must ensure that there is sufficient money to cover the
main purposes of the Fund Account ................................................65
Schedule 3--Target asset level declarations
67
1 Simplified
outline ............................................................................67
2 Designated
actuary ..........................................................................67
3 Target
asset
level declarations .........................................................67
4
Reliance on projections when making target asset level
declarations etc. ...............................................................................69
Future Fund Bill 2005 No. , 2005 2
A Bill for an Act about the Future Fund, and for
1
related purposes
2
The Parliament of Australia enacts:
3
Part 1--Introduction
4
5
1 Short title
6
This Act may be cited as the Future Fund Act 2005.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
Introduction Part 1
Section 3
Future Fund Bill 2005 No. , 2005 3
column 2 of the table. Any other statement in column 2 has effect
1
according to its terms.
2
3
Commencement information
Column 1
Column 2
Column 3
Provision(s) Commencement Date/Details
1. Sections 1 and
2 and anything in
this Act not
elsewhere covered
by this table
The day on which this Act receives the
Royal Assent.
2. Sections 3 to
85
A single day to be fixed by Proclamation.
However, if any of the provision(s) do not
commence within the period of 6 months
beginning on the day on which this Act
receives the Royal Assent, they commence
on the first day after the end of that period.
3. Schedules 1, 2
and 3
At the same time as the provision(s) covered
by table item 2.
Note:
This table relates only to the provisions of this Act as originally
4
passed by the Parliament and assented to. It will not be expanded to
5
deal with provisions inserted in this Act after assent.
6
(2) Column 3 of the table contains additional information that is not
7
part of this Act. Information in this column may be added to or
8
edited in any published version of this Act.
9
3 Object
10
(1) The object of this Act is to strengthen the Commonwealth's
11
long-term financial position by establishing the Future Fund.
12
(2) The Future Fund will make provision for unfunded superannuation
13
liabilities that will become payable during a period when an ageing
14
population is likely to place significant pressure on the
15
Commonwealth's finances.
16
Part 1 Introduction
Section 4
4 Future Fund Bill 2005 No. , 2005
4 Simplified outline
1
The following is a simplified outline of this Act:
2
·
This Act sets up the Future Fund.
3
·
The Future Fund Board of Guardians is responsible for
4
deciding how to invest the Future Fund.
5
·
Investments of the Future Fund will consist of financial assets.
6
·
The Board is bound by an Investment Mandate given to it by
7
the responsible Ministers.
8
·
The Future Fund Management Agency is responsible for
9
assisting and advising the Board.
10
5 Definitions
11
In this Act:
12
actuary means a person who is a Fellow or an Accredited Member
13
of the Institute of Actuaries of Australia.
14
Agency means the Future Fund Management Agency established
15
by section 74.
16
asset means:
17
(a) any kind of real or personal property; or
18
(b) any legal or equitable estate or interest in real or personal
19
property; or
20
(c) any legal or equitable right.
21
balance of the Fund means the sum of:
22
(a) amounts standing to the credit of the Fund Account; and
23
(b) the value of investments of the Fund.
24
bank has the same meaning as in the Financial Management and
25
Accountability Act 1997.
26
Introduction Part 1
Section 5
Future Fund Bill 2005 No. , 2005 5
Board means the Future Fund Board of Guardians established by
1
section 34.
2
Board member means a member of the Board, and includes the
3
Chair.
4
business judgment means any decision to take or not take action in
5
respect of a matter relevant to the operations of the Board.
6
Chair means the Chair of the Board.
7
Commonwealth authority has the same meaning as in the
8
Commonwealth Authorities and Companies Act 1997.
9
Commonwealth company has the same meaning as in the
10
Commonwealth Authorities and Companies Act 1997.
11
Commonwealth-owned financial asset means a financial asset
12
held by the Commonwealth.
13
derivative means a derivative (within the meaning of Chapter 7 of
14
the Corporations Act 2001) that is a financial asset.
15
designated actuary has the meaning given by clause 2 of
16
Schedule 3.
17
dishonest means:
18
(a) dishonest according to the standards of ordinary people; and
19
(b) known by the person to be dishonest according to the
20
standards of ordinary people.
21
Finance Minister has the same meaning as in the Financial
22
Management and Accountability Act 1997.
23
financial asset has the meaning given by section 6.
24
foreign listed company means a company:
25
(a) any of the shares of which are listed for quotation in the
26
official list of a stock exchange in a foreign country; and
27
(b) none of the shares of which are listed for quotation in the
28
official list of a stock exchange in Australia.
29
Fund means the Future Fund established by section 11.
30
Part 1 Introduction
Section 5
6 Future Fund Bill 2005 No. , 2005
Fund Account means the Future Fund Special Account established
1
by section 12.
2
funded component of a superannuation benefit means the part (if
3
any) of the superannuation benefit that, for actuarial purposes, is
4
treated as the funded component. For this purpose, disregard
5
Schedule 2.
6
GFS Australia means the publication of the Australian Bureau of
7
Statistics known as Australian System of Government Finance
8
Statistics: Concepts, Sources and Methods, as updated from time to
9
time. This updating takes 2 forms:
10
(a) from time to time, a new version of the publication is
11
produced;
12
(b) from time to time, material in the current version of the
13
publication is updated by other publications of the Australian
14
Bureau of Statistics.
15
GFS system has the same meaning as in GFS Australia.
16
investment means any mode of application of money or financial
17
assets for the purpose of gaining a return (whether by way of
18
income, capital gain or any other form of return).
19
investment function of the Board means:
20
(a) a function or power conferred on the Board by section 16, 17,
21
23, 25, 27 or 28; or
22
(b) a right or power conferred on the Board in its capacity as the
23
holder of an investment of the Fund.
24
investment manager means a person or body (other than the
25
Agency) who undertakes to do any or all of the following:
26
(a) invest amounts on behalf of the Board;
27
(b) manage the investment of funds on behalf of the Board;
28
(c) acquire derivatives on behalf of the Board;
29
(d) manage derivatives on behalf of the Board;
30
(e) enter into securities lending arrangements on behalf of the
31
Board;
32
(f) realise financial assets on behalf of the Board;
33
Introduction Part 1
Section 5
Future Fund Bill 2005 No. , 2005 7
(g) perform custodial functions in relation to the financial assets
1
of the Board.
2
Investment Mandate has the meaning given by subsection 18(3).
3
investment of the Fund means a financial asset that, under a
4
provision of this Act, is taken to be an investment of the Fund.
5
involved, in relation to a contravention, has the same meaning as in
6
the Commonwealth Authorities and Companies Act 1997.
7
nominated Minister has the meaning given by section 83.
8
person (except in Division 7 of Part 4) includes a partnership.
9
Note:
See also paragraph 22(1)(a) of the Acts Interpretation Act 1901.
10
realise includes redeem or dispose of.
11
responsible Ministers means:
12
(a) the Treasurer; and
13
(b) the Finance Minister.
14
securities lending arrangement means an agreement of the kind
15
known as a securities lending arrangement.
16
South Australian railways arrangement means an arrangement
17
between the Commonwealth and South Australia dealing with
18
employer superannuation liabilities arising in relation to former
19
employees of the South Australian railways.
20
superannuation benefit means a pension, allowance or other
21
benefit payable under:
22
(a)
the
Superannuation Act 1922; or
23
(b)
the
Superannuation Act 1976; or
24
(c) the scheme established under the Superannuation Act 1990;
25
or
26
(d) the Parliamentary Contributory Superannuation Act 1948; or
27
(e) the scheme established under the Military Superannuation
28
and Benefits Act 1991; or
29
(f)
the
Defence Forces Retirement Benefits Act 1948; or
30
Part 1 Introduction
Section 6
8 Future Fund Bill 2005 No. , 2005
(g)
the
Defence Force Retirement and Death Benefits Act 1973;
1
or
2
(h)
the
Judges' Pensions Act 1968; or
3
(i) section 4, 4A or 4AA of the Governor-General Act 1974.
4
superannuation liability means a liability to make a payment of a
5
superannuation benefit.
6
target asset level declaration means a declaration under subclause
7
3(1) of Schedule 3.
8
Tasmanian railways arrangement means an arrangement between
9
the Commonwealth and Tasmania dealing with employer
10
superannuation liabilities arising in relation to former employees of
11
the Tasmanian railways.
12
unfunded superannuation liability means:
13
(a) so much of a superannuation liability as is not attributable to
14
the funded component of a superannuation benefit; or
15
(b) an amount payable by the Commonwealth under a South
16
Australian railways arrangement; or
17
(c) an amount payable by the Commonwealth under a
18
Tasmanian railways arrangement.
19
value means market value. For this purpose, disregard anything
20
that would prevent or restrict conversion of a financial asset to
21
money.
22
6 Financial assets
23
A reference in this Act to a financial asset is a reference to:
24
(a) an asset that, in accordance with GFS Australia, is treated as
25
a financial asset for the purposes of the GFS system in
26
Australia; or
27
(b) an asset specified in regulations made for the purposes of this
28
paragraph;
29
but does not include a reference to an asset that, under the
30
regulations, is taken to be a non-financial asset for the purposes of
31
this Act.
32
Introduction Part 1
Section 7
Future Fund Bill 2005 No. , 2005 9
Note:
For specification by class, see subsection 13(3) of the Legislative
1
Instruments Act 2003.
2
7 Crown to be bound
3
(1) This Act binds the Crown in each of its capacities.
4
(2) This Act does not make the Crown liable to be prosecuted for an
5
offence.
6
8 Extension to external Territories
7
This Act extends to every external Territory.
8
9 Extra-territorial application
9
This Act extends to acts, omissions, matters and things outside
10
Australia (unless the contrary intention appears).
11
Part 2 The Future Fund
Section 10
10 Future Fund Bill 2005 No. , 2005
1
Part 2--The Future Fund
2
3
10 Simplified outline
4
The following is a simplified outline of this Part:
5
·
This Part sets up the Future Fund.
6
·
The Future Fund consists of the Future Fund Special Account
7
and the investments of the Future Fund.
8
11 Establishment of the Future Fund
9
(1) The Future Fund is established by this section.
10
(2) The Future Fund consists of:
11
(a) the Future Fund Special Account; and
12
(b) the investments of the Fund.
13
12 Establishment of the Future Fund Special Account
14
(1) The Future Fund Special Account is established by this section.
15
(2) The Fund Account is a Special Account for the purposes of the
16
Financial Management and Accountability Act 1997.
17
Note 1:
Fund Account means the Future Fund Special Account--see
18
section 5.
19
Note 2:
An Appropriation Act may contain a provision to the effect that, if any
20
of the purposes of a Special Account is a purpose that is covered by an
21
item in the Appropriation Act (whether or not the item expressly
22
refers to the Special Account), then amounts may be debited against
23
the appropriation for that item and credited to that Special Account.
24
13 Operation of the Future Fund
25
Schedules 1, 2 and 3 have effect.
26
Note 1:
Schedule 1 is about credits of amounts, and transfers of financial
27
assets, to the Future Fund.
28
The Future Fund Part 2
Section 13
Future Fund Bill 2005 No. , 2005 11
Note 2:
Schedule 2 is about debits of amounts from the Future Fund.
1
Note 3:
Schedule 3 is about target asset level declarations.
2
Part 3 Investment of the Future Fund
Section 14
12 Future Fund Bill 2005 No. , 2005
1
Part 3--Investment of the Future Fund
2
3
14 Simplified outline
4
The following is a simplified outline of this Part:
5
·
The Future Fund Board of Guardians is responsible for
6
deciding how to invest the Future Fund.
7
·
Investments of the Future Fund will consist of financial assets.
8
·
Investments of the Future Fund will be held in the name of the
9
Board.
10
·
The Board is bound by an Investment Mandate given to it by
11
the responsible Ministers.
12
15 Objects of investment of the Fund
13
(1) The main object of the acquisition by the Board of a financial asset
14
as an investment of the Fund is to enhance the ability of the
15
Commonwealth to discharge unfunded superannuation liabilities as
16
mentioned in paragraphs 2(a) and (b) of Schedule 2.
17
(2) The ancillary objects of the acquisition by the Board of a financial
18
asset as an investment of the Fund are to enhance the ability of the
19
Commonwealth and the Board to:
20
(a) discharge liabilities, costs, expenses and obligations; and
21
(b)
make
payments;
22
as mentioned in paragraphs 2(c) to (m) of Schedule 2.
23
16 Investment of the Fund
24
(1) The Board may invest amounts standing to the credit of the Fund
25
Account in any financial assets.
26
Investment of the Future Fund Part 3
Section 17
Future Fund Bill 2005 No. , 2005 13
(2) Investments under subsection (1) are to be made in the name of the
1
Board.
2
(3) Investments under subsection (1) are taken to be investments of the
3
Fund.
4
(4) This section does not authorise the acquisition of a derivative.
5
Note:
For acquisition of derivatives, see section 25.
6
17 Management of investments of the Fund
7
(1) Income derived from an investment of the Fund is to be credited to
8
the Fund Account.
9
(2) A return of capital, or any other financial distribution, relating to
10
an investment of the Fund is to be credited to the Fund Account.
11
(3) The Board may realise an investment of the Fund.
12
(4) Upon realisation of an investment of the Fund, the proceeds of the
13
investment are to be credited to the Fund Account.
14
(5) At any time before an investment of the Fund matures, the Board
15
may authorise the re-investment of the proceeds upon maturity in a
16
financial asset investment with the same entity. The new
17
investment is taken to be an investment of the Fund.
18
(6) Section 39 of the Financial Management and Accountability Act
19
1997 does not apply to an investment of the Fund.
20
18 Investment Mandate
21
(1) The responsible Ministers may give the Board written directions
22
about the performance of its investment functions, and must give at
23
least one such direction.
24
Note:
For variation and revocation, see subsection 33(3) of the Acts
25
Interpretation Act 1901.
26
(2) In giving a direction under subsection (1), the responsible
27
Ministers must have regard to:
28
Part 3 Investment of the Future Fund
Section 18
14 Future Fund Bill 2005 No. , 2005
(a) maximising the return earned on the Fund over the long term,
1
consistent with international best practice for institutional
2
investment; and
3
(b) such other matters as the responsible Ministers consider
4
relevant.
5
(3) Directions under subsection (1) are to be known collectively as the
6
Investment Mandate.
7
(4) A direction under subsection (1) may set out the policies to be
8
pursued by the Board in relation to:
9
(a) matters of risk and return; and
10
(b) the allocation of financial assets.
11
A policy relating to the allocation of financial assets must not be
12
inconsistent with a policy relating to matters of risk and return.
13
(5) Subsection (4) does not limit subsection (1).
14
(6) The Investment Mandate prevails over subsection (10) to the extent
15
of any inconsistency.
16
(7) The responsible Ministers must not give a direction under
17
subsection (1) that is inconsistent with this Act (other than
18
subsection (10)).
19
(8) A direction under subsection (1) must not take effect before the
20
15th day after the day on which it is given.
21
(9) A direction under subsection (1) is a legislative instrument for the
22
purposes of the Legislative Instruments Act 2003.
23
Note:
Section 42 of the Legislative Instruments Act 2003 does not apply to
24
the direction--see section 44 of that Act.
25
(10) In the performance of its investment functions, the Board must
26
seek to maximise the return earned on the Fund over the long term,
27
consistent with international best practice for institutional
28
investment.
29
Note:
Investment function is defined in section 5.
30
(11) Subsection (10) has effect subject to:
31
(a) this Act; and
32
Investment of the Future Fund Part 3
Section 19
Future Fund Bill 2005 No. , 2005 15
(b) a direction under subsection (1); and
1
(c) a direction under subclause 8(1) of Schedule 1.
2
(12) Before the first occasion on which an amount is debited from the
3
Fund Account for the purpose of discharging, in whole or in part,
4
an unfunded superannuation liability, the responsible Ministers
5
must review the Investment Mandate in consultation with the
6
Board.
7
Note:
If there is to be a change in the Investment Mandate, the responsible
8
Ministers must consult the Board under section 19.
9
19 Board to be consulted on Investment Mandate
10
(1) Before giving the Board a direction under subsection 18(1), the
11
responsible Ministers must:
12
(a) send a draft of the direction to the Board; and
13
(b) invite the Board to make a submission to the responsible
14
Ministers on the draft direction within a time limit specified
15
by the responsible Ministers; and
16
(c) consider any submission that is received from the Board
17
within that time limit.
18
(2)
If:
19
(a) the responsible Ministers give the Board a direction under
20
subsection 18(1); and
21
(b) the Board made a submission to the responsible Ministers on
22
a draft of the direction within the time limit specified by the
23
responsible Ministers;
24
the submission is to be tabled in each House of the Parliament with
25
the direction.
26
Note:
For tabling of the direction, see section 38 of the Legislative
27
Instruments Act 2003.
28
(3) A time limit specified under this section must be reasonable.
29
20 Compliance with Investment Mandate
30
(1) The Board must take all reasonable steps to comply with the
31
Investment Mandate.
32
Part 3 Investment of the Future Fund
Section 21
16 Future Fund Bill 2005 No. , 2005
(2) As soon as practicable after the Board becomes aware that it has
1
failed to comply with the Investment Mandate, the Board must
2
give the responsible Ministers a written statement:
3
(a) informing the responsible Ministers of the failure to comply
4
with the Investment Mandate; and
5
(b) setting out the action that the Board proposes to take in order
6
to comply with the Investment Mandate.
7
(3) If the responsible Ministers are satisfied that the Board has failed
8
to comply with the Investment Mandate, the responsible Ministers
9
may, by written notice given to the Board, direct the Board:
10
(a) to give the responsible Ministers, within a period specified in
11
the notice, a written explanation for the failure to comply
12
with the Investment Mandate; and
13
(b) to take action specified in the notice, within a period
14
specified in the notice, in order to comply with the
15
Investment Mandate.
16
(4) The Board must comply with a direction under subsection (3).
17
(5) A failure to comply with:
18
(a) the Investment Mandate; or
19
(b) a direction under subsection (3);
20
does not affect the validity of any transaction.
21
(6) A direction under subsection (3) is not a legislative instrument for
22
the purposes of the Legislative Instruments Act 2003.
23
21 Board must not trigger the takeover provisions of the
24
Corporations Act 2001
25
(1) Section 606 of the Corporations Act 2001 does not apply to an
26
acquisition by the Board if the acquisition is the result of a transfer
27
under clause 6 or 7 of Schedule 1 to this Act.
28
(2) Subsections 606(1A) and (2A) and section 611 of the Corporations
29
Act 2001 do not apply to an acquisition by the Board.
30
Investment of the Future Fund Part 3
Section 22
Future Fund Bill 2005 No. , 2005 17
(3) A failure by the Board to comply with section 606 of the
1
Corporations Act 2001 (as modified by this section) does not affect
2
the validity of any transaction.
3
Note:
See also section 39 (application of the Corporations Act 2001).
4
22 Board must not have a significant stake in a foreign listed
5
company
6
(1) The Board must take all reasonable steps to ensure that it does not
7
hold a stake in a foreign listed company of more than 20%.
8
Stake
9
(2)
The
Financial Sector (Shareholdings) Act 1998 applies for the
10
purposes of determining the Board's stake in a foreign listed
11
company, with the following modifications:
12
(a) assume that the Board does not have any associates;
13
(b) assume that any financial assets held by the Board were held
14
by the Board in its own right;
15
(c) disregard paragraph 8(1)(c) of Schedule 1 to that Act;
16
(d) the modification set out in subsection (3).
17
(3) For the purposes of determining the Board's stake in a foreign
18
listed company, if, under a securities lending arrangement:
19
(a) at a particular time (the disposal time), the Board disposed of
20
a financial asset (the borrowed financial asset) to another
21
person (the borrower); and
22
(b) the Board may come under an obligation to:
23
(i) re-acquire the borrowed financial asset from the
24
borrower at a later time; or
25
(ii) acquire an identical financial asset from the borrower at
26
a later time;
27
the borrowed financial asset is taken to be held by the Board during
28
the period:
29
(c) beginning at the disposal time; and
30
(d) ending when the obligation mentioned in paragraph (b) is
31
discharged or can no longer arise.
32
Part 3 Investment of the Future Fund
Section 23
18 Future Fund Bill 2005 No. , 2005
Validity of transactions
1
(4) A failure to comply with subsection (1) does not affect the validity
2
of any transaction.
3
23 Borrowing
4
(1) The Board must not borrow money unless the borrowing is
5
authorised by subsection (2) or (3).
6
(2) The Board is authorised to borrow money if:
7
(a) the purpose of the borrowing is to enable the Board to cover
8
settlement of a transaction for the acquisition of one or more
9
financial assets; and
10
(b) at the time the relevant acquisition decision was made, it was
11
likely that the borrowing would not be needed; and
12
(c) the period of the borrowing does not exceed 7 days; and
13
(d) if the borrowing were to take place, the total amount
14
borrowed by the Board would not exceed 10% of the balance
15
of the Fund.
16
(3) The Board is authorised to borrow money in such circumstances (if
17
any) as are specified in the regulations.
18
24 Investment policies
19
(1) The Board must formulate written policies to be complied with by
20
it in relation to the following matters:
21
(a) the investment strategy for the Fund;
22
(b) benchmarks and standards for assessing the performance of
23
the Fund;
24
(c) risk management for the Fund;
25
(d) a matter relating to international best practice for institutional
26
investment;
27
(e) a matter specified in the regulations.
28
Note:
For variation and revocation, see subsection 33(3) of the Acts
29
Interpretation Act 1901.
30
(2) The Board must ensure that policies formulated under
31
subsection (1) are consistent with the Investment Mandate.
32
Investment of the Future Fund Part 3
Section 25
Future Fund Bill 2005 No. , 2005 19
Publication of policies
1
(3) The Board must cause copies of policies formulated under
2
subsection (1) to be published on the Internet.
3
(4) The Board must ensure that the first set of policies formulated
4
under subsection (1) is published on the Internet as soon as
5
practicable after the commencement of this section.
6
Review of policies
7
(5) The Board must conduct periodic reviews of policies formulated
8
under subsection (1).
9
(6) If there is a change in the Investment Mandate, the Board must
10
review any relevant policies formulated under subsection (1).
11
Compliance with policies
12
(7) The Board must take all reasonable steps to comply with policies
13
formulated under subsection (1).
14
(8) A failure to comply with a policy formulated under subsection (1)
15
does not affect the validity of any transaction.
16
Policies
17
(9) A policy formulated under subsection (1) is not a legislative
18
instrument for the purposes of the Legislative Instruments Act
19
2003.
20
25 Derivatives
21
(1) The Board may acquire a derivative for the purpose of:
22
(a) protecting the value of an investment of the Fund (other than
23
a derivative); or
24
(b) protecting the return on an investment of the Fund (other than
25
a derivative); or
26
(c) achieving indirect exposure to financial assets (other than
27
derivatives); or
28
(d) achieving transactional efficiency;
29
Part 3 Investment of the Future Fund
Section 26
20 Future Fund Bill 2005 No. , 2005
but must not acquire a derivative for the purpose of:
1
(e)
speculation;
or
2
(f)
leverage.
3
(2) The acquisition of a derivative under subsection (1) must be
4
consistent with the investment strategy embodied in a policy
5
formulated by the Board under subsection 24(1).
6
(3) A derivative acquired under subsection (1) is to be held in the
7
name of the Board.
8
(4) A derivative acquired under subsection (1) is taken to be an
9
investment of the Fund.
10
26 Additional financial assets
11
If, as a result of:
12
(a) the Board's holding of an investment of the Fund; or
13
(b) the exercise of any rights or powers conferred on the Board
14
in its capacity as the holder of an investment of the Fund;
15
the Board becomes the holder of a financial asset, that financial
16
asset is taken to be an investment of the Fund.
17
27 Securities lending arrangements
18
(1) The Board may enter into securities lending arrangements.
19
(2) Any money received by the Board under a securities lending
20
arrangement is to be credited to the Fund Account.
21
(3) To avoid doubt, a securities lending arrangement may provide for
22
the Board to realise an investment of the Fund.
23
(4) If, as the result of the operation of a securities lending
24
arrangement, the Board becomes the holder of a financial asset,
25
that financial asset is taken to be an investment of the Fund.
26
28 Investment managers
27
(1) The Board may engage one or more investment managers.
28
Investment of the Future Fund Part 3
Section 29
Future Fund Bill 2005 No. , 2005 21
(2) The Board must not:
1
(a) invest amounts under subsection 16(1); or
2
(b) acquire derivatives under subsection 25(1); or
3
(c) enter into a securities lending arrangement; or
4
(d) realise financial assets;
5
unless the Board does so:
6
(e) through an investment manager engaged by the Board; or
7
(f) in a manner approved, in writing, by the responsible
8
Ministers.
9
(3) The Board must ensure that any investment manager engaged by
10
the Board operates within this Act.
11
(4) The Board must ensure that any investment manager engaged by
12
the Board reports to the Board and the Agency on the state of the
13
investments of the Fund at such times and in such manner as the
14
Board determines.
15
29 Custody of securities
16
Section 40 of the Financial Management and Accountability Act
17
1997 does not apply to an investment of the Fund.
18
30 Exemption from taxation
19
Income tax
20
(1) To avoid doubt, for the purposes of section 50-25 of the Income
21
Tax Assessment Act 1997, the Board is taken to be a public
22
authority constituted under an Australian law.
23
Note:
This means that the Board is exempt from income tax.
24
State/Territory taxes
25
(2) To avoid doubt, the Board is not subject to taxation under a law of
26
a State or Territory, if the Commonwealth is not subject to the
27
taxation.
28
Part 3 Investment of the Future Fund
Section 31
22 Future Fund Bill 2005 No. , 2005
31 Franking credits
1
(1) For the purposes of the Income Tax Assessment Act 1997, the
2
Board is taken to be an exempt institution that is eligible for a
3
refund.
4
Note:
See Division 207 of the Income Tax Assessment Act 1997 (franked
5
distributions).
6
(2) Subsection (1) has effect despite subsection 207-115(1) of the
7
Income Tax Assessment Act 1997.
8
(3) For the purposes of the Income Tax Assessment Act 1997, the
9
Board's entitlement to a tax offset is to be determined as if any
10
financial assets held by the Board were held by the Board in its
11
own right.
12
(4) If the Board receives a refund of a tax offset under the Income Tax
13
Assessment Act 1997, the refund is to be credited to the Fund
14
Account.
15
Note:
For refunds of tax offsets, see section 67-30 of the Income Tax
16
Assessment Act 1997.
17
32 Realisation of non-financial assets
18
(1) If an asset held by the Board as an investment of the Fund ceases to
19
be a financial asset:
20
(a) the Board must realise the asset as soon as practicable after
21
the Board becomes aware of the cessation; and
22
(b) this Act (other than this section) applies in relation to the
23
asset (including in relation to the realisation of the asset) as if
24
the asset had remained a financial asset, and an investment of
25
the Fund, until the realisation.
26
(2) If an asset acquired by the Board, purportedly as an investment of
27
the Fund, is not a financial asset:
28
(a) the Board must realise the asset as soon as practicable after
29
the Board becomes aware that the asset is not a financial
30
asset; and
31
(b) this Act (other than this section) applies in relation to the
32
asset (including in relation to the realisation of the asset) as if
33
the asset had been a financial asset, and an investment of the
34
Investment of the Future Fund Part 3
Section 32
Future Fund Bill 2005 No. , 2005 23
Fund, from the time of its acquisition by the Board until the
1
realisation.
2
Part 4 The Future Fund Board of Guardians
Division 1 Introduction
Section 33
24 Future Fund Bill 2005 No. , 2005
1
Part 4--The Future Fund Board of Guardians
2
Division 1--Introduction
3
33 Simplified outline
4
The following is a simplified outline of this Part:
5
·
This Part establishes the Future Fund Board of Guardians.
6
·
The Future Fund Board of Guardians is responsible for
7
deciding how to invest the Future Fund.
8
·
The Board consists of a Chair and 6 other members.
9
·
An asset held by the Board is held for and on behalf of the
10
Commonwealth.
11
·
Board members must act in good faith.
12
The Future Fund Board of Guardians Part 4
Establishment and functions of the Future Fund Board of Guardians Division 2
Section 34
Future Fund Bill 2005 No. , 2005 25
1
Division 2--Establishment and functions of the Future
2
Fund Board of Guardians
3
34 Establishment of the Future Fund Board of Guardians
4
The Future Fund Board of Guardians is established by this section.
5
35 Board's functions
6
The Board has the following functions:
7
(a) to invest amounts in accordance with this Act;
8
(b) such other functions as are conferred on the Board by this
9
Act;
10
(c) to do anything incidental to or conducive to the performance
11
of any of the above functions.
12
36 Board's ordinary powers
13
(1) The Board has power to do all things necessary or convenient to be
14
done for or in connection with the performance of its functions,
15
other than the power to lease the whole or any part of any land or
16
building for the purposes of the Board.
17
(2) The Board's powers include, but are not limited to, the power to
18
enter into contracts.
19
Example: A contract of insurance.
20
(3) Any real or personal property held by the Board is held for and on
21
behalf of the Commonwealth.
22
(4) Any money received by the Board is received by the Board for and
23
on behalf of the Commonwealth.
24
37 Board is a body corporate
25
(1)
The
Board:
26
(a) is a body corporate with perpetual succession; and
27
(b) must have a seal; and
28
Part 4 The Future Fund Board of Guardians
Division 2 Establishment and functions of the Future Fund Board of Guardians
Section 38
26 Future Fund Bill 2005 No. , 2005
(c) may acquire, hold and dispose of real and personal property;
1
and
2
(d) may sue and be sued in its corporate name.
3
Seal
4
(2) The seal of the Board must be kept in such custody as the Board
5
directs, and must not be used except as authorised by the Board.
6
(3) All courts, judges and persons acting judicially must:
7
(a) take judicial notice of the imprint of the seal of the Board
8
appearing on a document; and
9
(b) presume that the document was duly sealed.
10
38 Membership
11
(1) The Board consists of the following members:
12
(a)
a
Chair;
13
(b) 6 other members.
14
Note:
Section 18B of the Acts Interpretation Act 1901 deals with the title of
15
the Chair.
16
(2) Board members are to be appointed by the responsible Ministers by
17
written instrument.
18
Note:
For re-appointment, see subsection 33(4A) of the Acts Interpretation
19
Act 1901.
20
(3) A person is not eligible for appointment as a Board member unless
21
the responsible Ministers are satisfied that the person has:
22
(a) substantial experience or expertise; and
23
(b) professional credibility and significant standing;
24
in at least one of the following fields:
25
(c) investing in financial assets;
26
(d) the management of investments in financial assets;
27
(e)
corporate
governance.
28
(4) A person is not eligible for appointment as a Board member if the
29
person is:
30
(a) an employee of the Commonwealth; or
31
The Future Fund Board of Guardians Part 4
Establishment and functions of the Future Fund Board of Guardians Division 2
Section 39
Future Fund Bill 2005 No. , 2005 27
(b) an employee of a statutory authority of the Commonwealth;
1
or
2
(c) an employee of a Commonwealth company; or
3
(d) the holder of a full-time office under a law of the
4
Commonwealth.
5
Note:
A Board member is not an employee of the Commonwealth. A Board
6
member holds a part-time office under a law of the Commonwealth.
7
39 Application of the Corporations Act 2001
8
(1) The Board is taken to be an exempt public authority for the
9
purposes of the Corporations Act 2001.
10
(2) To avoid doubt, the Board is taken to be an instrumentality of the
11
Crown in right of the Commonwealth for the purposes of
12
section 5A of the Corporations Act 2001.
13
Part 4 The Future Fund Board of Guardians
Division 3 Terms and conditions for Board members
Section 40
28 Future Fund Bill 2005 No. , 2005
1
Division 3--Terms and conditions for Board members
2
40 Term of appointment and related matters for Board members
3
(1) A Board member is to be appointed on a part-time basis.
4
(2) A Board member holds office for the period that is specified in the
5
instrument of appointment. The period must not exceed 5 years.
6
Note:
For re-appointment, see subsection 33(4A) of the Acts Interpretation
7
Act 1901.
8
41 Remuneration and allowances of Board members
9
(1) A Board member is to be paid the remuneration that is determined
10
by the Remuneration Tribunal. If no determination of that
11
remuneration by the Tribunal is in operation, the Board member is
12
to be paid the remuneration that is determined by the responsible
13
Ministers.
14
(2) A Board member is to be paid the allowances that are prescribed.
15
(3) This section has effect subject to the Remuneration Tribunal Act
16
1973.
17
42 Leave of absence of Board members
18
(1) The nominated Minister may grant leave of absence to the Chair on
19
the terms and conditions that the nominated Minister determines.
20
(2) The Chair may grant leave of absence to another Board member on
21
the terms and conditions that the Chair determines.
22
43 Resignation of Board members
23
A Board member may resign his or her appointment by giving the
24
responsible Ministers a written resignation.
25
The Future Fund Board of Guardians Part 4
Terms and conditions for Board members Division 3
Section 44
Future Fund Bill 2005 No. , 2005 29
44 Termination of appointment of Board members
1
(1) The responsible Ministers may terminate the appointment of a
2
Board member for misbehaviour or physical or mental incapacity.
3
(2) The responsible Ministers may terminate the appointment of a
4
Board member if:
5
(a) the Board member:
6
(i)
becomes
bankrupt;
or
7
(ii) applies to take the benefit of any law for the relief of
8
bankrupt or insolvent debtors; or
9
(iii) compounds with his or her creditors; or
10
(iv) makes an assignment of his or her remuneration for the
11
benefit of his or her creditors; or
12
(b) the Board member is absent, except on leave of absence,
13
from 3 consecutive meetings of the Board; or
14
(c) the Board member contravenes section 56, 57, 58, 59, 60, 61
15
or 62; or
16
(d) the Board member fails, without reasonable excuse, to
17
comply with section 68, 69 or 71; or
18
(e) the responsible Ministers are satisfied that the performance of
19
the Board member has been unsatisfactory for a significant
20
period.
21
45 Other terms and conditions of Board members
22
A Board member holds office on the terms and conditions (if any)
23
in relation to matters not covered by this Act that are determined
24
by the responsible Ministers.
25
46 Acting Board members
26
Acting Chair
27
(1) The nominated Minister may appoint a person to act as the Chair:
28
(a) during a vacancy in the office of Chair, whether or not an
29
appointment has previously been made to the office; or
30
Part 4 The Future Fund Board of Guardians
Division 3 Terms and conditions for Board members
Section 46
30 Future Fund Bill 2005 No. , 2005
(b) during any period, or during all periods, when the Chair is
1
absent from duty or Australia, or is, for any reason, unable to
2
perform the duties of the office.
3
Acting Board member (other than the Chair)
4
(2) The nominated Minister may appoint a person to act as a Board
5
member (other than the Chair):
6
(a) during a vacancy in the office of a Board member (other than
7
the Chair), whether or not an appointment has previously
8
been made to the office; or
9
(b) during any period, or during all periods, when a Board
10
member (other than the Chair) is absent from duty or
11
Australia, or is, for any reason, unable to perform the duties
12
of the office.
13
Qualifications
14
(3) A person is not eligible for appointment to act as:
15
(a) the Chair; or
16
(b) a Board member (other than the Chair);
17
unless the person is eligible for appointment as a Board member.
18
Note:
See subsections 38(3) and (4).
19
Validation
20
(4) Anything done by or in relation to a person purporting to act under
21
an appointment is not invalid merely because:
22
(a) the occasion for the appointment had not arisen; or
23
(b) there was a defect or irregularity in connection with the
24
appointment; or
25
(c) the appointment had ceased to have effect; or
26
(d) the occasion to act had not arisen or had ceased.
27
Note:
See section 33A of the Acts Interpretation Act 1901.
28
The Future Fund Board of Guardians Part 4
Meetings Division 4
Section 47
Future Fund Bill 2005 No. , 2005 31
1
Division 4--Meetings
2
47 Holding of meetings
3
(1) The Board is to hold such meetings as are necessary for the
4
performance of its functions.
5
(2)
The
Chair:
6
(a) may convene a meeting at any time; and
7
(b) must convene a meeting within 30 days after receiving a
8
written request from another Board member.
9
Note:
See also section 33B of the Acts Interpretation Act 1901 (participation
10
in meetings by telephone etc.).
11
48 Who is to preside at a meeting
12
(1) The Chair is to preside at all meetings at which he or she is present.
13
(2) If the Chair is not present at a meeting:
14
(a) a Board member nominated by the Chair is to preside; or
15
(b) if no Board member is so nominated--the Board members
16
present are to elect one of their number to preside.
17
49 Quorum
18
(1) At a meeting, 5 Board members form a quorum.
19
(2) Despite subsection (1), if:
20
(a) section 71 prevents one or more Board members from
21
participating in the deliberations, or decisions, of the Board
22
with respect to a particular matter; and
23
(b) as a result, there is no longer a quorum present; and
24
(c) there are in attendance at least 3 other Board members who
25
would be counted in determining whether a quorum is
26
present;
27
those other Board members constitute a quorum for the purpose of
28
any deliberation or decision at that meeting with respect to that
29
matter.
30
Part 4 The Future Fund Board of Guardians
Division 4 Meetings
Section 50
32 Future Fund Bill 2005 No. , 2005
50 Voting
1
(1) Decisions at a meeting must be affirmed by a majority of votes of
2
Board members voting.
3
(2) The Board member presiding at a meeting has a deliberative vote
4
and, in the event of an equality of votes, also has a casting vote.
5
51 Records of meetings
6
The Board must keep accurate records of all its meetings.
7
The Future Fund Board of Guardians Part 4
Resolutions without meetings Division 5
Section 52
Future Fund Bill 2005 No. , 2005 33
1
Division 5--Resolutions without meetings
2
52 Resolutions without meetings
3
(1) A resolution is taken to have been passed at a meeting of the Board
4
if:
5
(a) the Board has determined:
6
(i) that resolutions may be passed in accordance with this
7
section; and
8
(ii) the method by which Board members are to indicate
9
agreement with a resolution proposed to be passed in
10
accordance with this section; and
11
(b) without meeting, a majority of the Board members indicate
12
agreement with the resolution in accordance with the method
13
determined by the Board; and
14
(c) the majority would have constituted a quorum at a meeting of
15
the Board; and
16
(d)
either:
17
(i) all the Board members were informed of the resolution;
18
or
19
(ii) reasonable efforts were made to inform all the Board
20
members of the resolution.
21
(2) Paragraph (1)(b) does not apply to a Board member who would
22
have been prevented by section 71 from deliberating on the
23
resolution if the resolution had been put to a meeting of the Board.
24
53 Record of resolutions
25
The Board must keep a record of resolutions passed in accordance
26
with section 52.
27
Part 4 The Future Fund Board of Guardians
Division 6 Reporting obligations
Section 54
34 Future Fund Bill 2005 No. , 2005
1
Division 6--Reporting obligations
2
54 Nominated Minister may require Board to prepare reports or
3
give information
4
Reports
5
(1) The nominated Minister may, by written notice given to the Board,
6
require the Board:
7
(a) to prepare a report about one or more specified matters
8
relating to the performance of the Board's functions; and
9
(b) give copies of the report to the nominated Minister within the
10
period specified in the notice.
11
Information
12
(2) The nominated Minister may, by written notice given to the Board,
13
require the Board to:
14
(a) prepare a document setting out specified information relating
15
to the performance of the Board's functions; and
16
(b) give copies of the document to the nominated Minister within
17
the period specified in the notice.
18
Compliance
19
(3) The Board must comply with a requirement under subsection (1) or
20
(2).
21
Publication of reports and documents
22
(4) The nominated Minister may cause to be published (whether on the
23
Internet or otherwise):
24
(a) a report under subsection (1); or
25
(b) a document under subsection (2).
26
Reports and documents
27
(5) A report under subsection (1) is not a legislative instrument for the
28
purposes of the Legislative Instruments Act 2003.
29
The Future Fund Board of Guardians Part 4
Reporting obligations Division 6
Section 55
Future Fund Bill 2005 No. , 2005 35
(6) A document under subsection (2) is not a legislative instrument for
1
the purposes of the Legislative Instruments Act 2003.
2
55 Keeping the responsible Ministers informed etc.
3
(1) The Board must keep the responsible Ministers informed of the
4
operations of the Board.
5
(2) The Board must give the nominated Minister such reports,
6
documents and information in relation to those operations as are
7
appropriate.
8
Part 4 The Future Fund Board of Guardians
Division 7 Duties of Board members etc.
Section 56
36 Future Fund Bill 2005 No. , 2005
1
Division 7--Duties of Board members etc.
2
56 Care and diligence--civil obligation
3
(1) A Board member must exercise his or her powers and discharge his
4
or her duties with the degree of care and diligence that a reasonable
5
person would exercise if he or she:
6
(a) were a Board member in the Board's circumstances; and
7
(b) occupied the office held by, and had the same responsibilities
8
within the Board as, the Board member.
9
Note:
This subsection is a civil penalty provision (see section 66).
10
Business judgment rule
11
(2) A Board member who makes a business judgment is taken to meet
12
the requirements of subsection (1), and their equivalent duties at
13
common law and in equity, in respect of the judgment if he or she:
14
(a) makes the judgment in good faith for a proper purpose; and
15
(b) does not have a material personal interest in the subject
16
matter of the judgment; and
17
(c) informs himself or herself about the subject matter of the
18
judgment to the extent he or she reasonably believes to be
19
appropriate; and
20
(d) rationally believes that the judgment is in the best interests of
21
performing the functions of the Board.
22
The Board member's belief that the judgment is in the best
23
interests of performing the functions of the Board is a rational one
24
unless the belief is one that no reasonable person in his or her
25
position would hold.
26
57 Good faith--civil obligation
27
(1) A Board member must exercise his or her powers and discharge his
28
or her duties:
29
(a) in good faith in the best interests of performing the functions
30
of the Board; and
31
(b) for a proper purpose.
32
The Future Fund Board of Guardians Part 4
Duties of Board members etc. Division 7
Section 58
Future Fund Bill 2005 No. , 2005 37
Note:
This subsection is a civil penalty provision (see section 66).
1
(2) A person who is involved in a contravention of subsection (1)
2
contravenes this subsection.
3
Note:
This subsection is a civil penalty provision (see section 66).
4
58 Use of position--civil obligation
5
(1) A Board member or a member of the staff of the Agency must not
6
improperly use his or her position to:
7
(a) gain an advantage for himself or herself or someone else; or
8
(b) cause detriment to the Board's ability to perform its
9
functions; or
10
(c) cause detriment to another person.
11
Note:
This subsection is a civil penalty provision (see section 66).
12
(2) A person who is involved in a contravention of subsection (1)
13
contravenes this subsection.
14
Note:
This subsection is a civil penalty provision (see section 66).
15
59 Use of information--civil obligation
16
(1) A person who obtains information because he or she is, or has
17
been, a Board member or a member of the staff of the Agency must
18
not improperly use the information to:
19
(a) gain an advantage for himself or herself or someone else; or
20
(b) cause detriment to the Board's ability to perform its
21
functions; or
22
(c) cause detriment to another person.
23
Note 1:
This duty continues after the person stops being a Board member or a
24
member of the staff of the Agency.
25
Note 2:
This subsection is a civil penalty provision (see section 66).
26
(2) A person who is involved in a contravention of subsection (1)
27
contravenes this subsection.
28
Note:
This subsection is a civil penalty provision (see section 66).
29
Part 4 The Future Fund Board of Guardians
Division 7 Duties of Board members etc.
Section 60
38 Future Fund Bill 2005 No. , 2005
60 Good faith--criminal offence
1
A Board member commits an offence if he or she:
2
(a) is reckless; or
3
(b) is intentionally dishonest;
4
and fails to exercise his or her powers and discharge his or her
5
duties:
6
(c) in good faith in what he or she believes to be in the best
7
interests of the performance of the functions of the Board; or
8
(d) for a proper purpose.
9
Penalty: Imprisonment for 5 years.
10
61 Use of position--criminal offence
11
A Board member or a member of the staff of the Agency commits
12
an offence if he or she uses his or her position dishonestly:
13
(a) with the intention of:
14
(i) directly or indirectly gaining an advantage for himself
15
or herself or someone else; or
16
(ii) causing detriment to the ability of the Board to perform
17
its functions; or
18
(iii) causing detriment to another person; or
19
(b) recklessly as to whether the use may result in:
20
(i) him or her or someone else directly or indirectly gaining
21
an advantage; or
22
(ii) causing detriment to the ability of the Board to perform
23
its functions; or
24
(iii) causing detriment to another person.
25
Penalty: Imprisonment for 5 years.
26
62 Use of information--criminal offence
27
A person who obtains information because he or she is, or has
28
been, a Board member or a member of the staff of the Agency
29
commits an offence if he or she uses the information dishonestly:
30
(a) with the intention of:
31
The Future Fund Board of Guardians Part 4
Duties of Board members etc. Division 7
Section 63
Future Fund Bill 2005 No. , 2005 39
(i) directly or indirectly gaining an advantage for himself
1
or herself or someone else; or
2
(ii) causing detriment to the ability of the Board to perform
3
its functions; or
4
(iii) causing detriment to another person; or
5
(b) recklessly as to whether the use may result in:
6
(i) him or her or someone else directly or indirectly gaining
7
an advantage; or
8
(ii) causing detriment to the ability of the Board to perform
9
its functions; or
10
(iii) causing detriment to another person.
11
Penalty: Imprisonment for 5 years.
12
63 Compliance with statutory duties
13
(1) A Board member does not contravene section 57, 58 or 59, or
14
commit an offence against section 60, 61 or 62, by doing an act
15
that another provision of this Act requires the Board member to do.
16
(2) The Chair does not contravene section 57, 58 or 59, or commit an
17
offence against section 60, 61 or 62, by doing an act that:
18
(a) another provision of this Act; or
19
(b)
the
Financial Management and Accountability Act 1997; or
20
(c) regulations or orders under the Financial Management and
21
Accountability Act 1997;
22
requires the Chair to do.
23
64 Interaction of sections 56 to 62 with other laws etc.
24
Sections 56 to 62:
25
(a) have effect in addition to, and not in derogation of, any rule
26
of law relating to the duty or liability of a person because of
27
his or her office as a Board member or employment in
28
relation to the Agency; and
29
(b) do not prevent the commencement of proceedings for a
30
breach of duty, or in respect of a liability, referred to in
31
paragraph (a).
32
Part 4 The Future Fund Board of Guardians
Division 7 Duties of Board members etc.
Section 65
40 Future Fund Bill 2005 No. , 2005
This section does not apply to subsection 56(2) to the extent to
1
which it operates on the duties at common law and in equity that
2
are equivalent to the requirements of subsection 56(1).
3
65 Reliance on information or advice provided by others
4
If:
5
(a) a Board member relies on information, or professional or
6
expert advice, given or prepared by:
7
(i) a member of the staff of the Agency whom the Board
8
member believes on reasonable grounds to be reliable
9
and competent in relation to the matters concerned; or
10
(ii) a professional adviser or expert in relation to matters
11
that the Board member believes on reasonable grounds
12
to be within the person's professional or expert
13
competence; or
14
(iii) another Board member in relation to matters within the
15
Board member's authority; or
16
(iv) a committee of Board members on which the Board
17
member did not serve in relation to matters within the
18
committee's authority; and
19
(b) the reliance was made:
20
(i) in good faith; and
21
(ii) after making proper inquiry if the circumstances
22
indicated the need for inquiry; and
23
(c) the reasonableness of the Board member's reliance on the
24
information or advice arises in proceedings brought to
25
determine whether a Board member has performed a duty
26
under this Division, or an equivalent general law duty;
27
the Board member's reliance on the information or advice is taken
28
to be reasonable unless the contrary is proved.
29
66 Consequences of breach of duty--additional effect of the
30
Commonwealth Authorities and Companies Act 1997
31
The following provisions (the CAC Act consequences provisions):
32
(a) subsections 6(2), (3) and (4) of the Commonwealth
33
Authorities and Companies Act 1997;
34
The Future Fund Board of Guardians Part 4
Duties of Board members etc. Division 7
Section 67
Future Fund Bill 2005 No. , 2005 41
(b) section 27C of that Act;
1
(c) Schedule 2 to that Act;
2
have effect as if:
3
(d) in addition to the provisions specified in subclause 1(1) of
4
Schedule 2 to that Act, the following provisions were also
5
specified in that subclause:
6
(i) subsection 56(1) of this Act;
7
(ii) subsections 57(1) and (2) of this Act;
8
(iii) subsections 58(1) and (2) of this Act;
9
(iv) subsections 59(1) and (2) of this Act; and
10
(e) each reference in the CAC Act consequences provisions to an
11
officer or director of a Commonwealth authority included a
12
reference to a Board member; and
13
(f) each reference in the CAC Act consequences provisions to a
14
Commonwealth authority included a reference to the Board.
15
Note 1:
Section 27C of the Commonwealth Authorities and Companies Act
16
1997 is about disqualification orders.
17
Note 2:
Schedule 2 to the Commonwealth Authorities and Companies Act
18
1997 is about the consequences of contravening civil penalty
19
provisions.
20
Note 3:
Sections 11, 22, 23, 24 and 25 of the Commonwealth Authorities and
21
Companies Act 1997 do not apply in relation to the Board or Board
22
members. This is because the Board is not a Commonwealth authority.
23
67 Insurance for certain liabilities of Board members
24
(1) Except as provided in subsection (2), the Board may insure a
25
person who is or has been a Board member against liabilities
26
incurred by the person as a Board member.
27
(2) The Board must not pay, or agree to pay, a premium for a contract
28
insuring a person who is, or has been, a Board member against a
29
liability (other than one for legal costs) arising out of:
30
(a) conduct involving a wilful breach of duty in relation to the
31
Board; or
32
(b) a contravention of section 58 or 59.
33
This subsection applies to a premium whether it is paid directly or
34
through an interposed entity.
35
Part 4 The Future Fund Board of Guardians
Division 7 Duties of Board members etc.
Section 67
42 Future Fund Bill 2005 No. , 2005
(3) This section does not authorise anything that would otherwise be
1
unlawful.
2
(4) Anything that purports to insure a person against a liability is void
3
to the extent that it contravenes this section.
4
The Future Fund Board of Guardians Part 4
Conflict of interests Division 8
Section 68
Future Fund Bill 2005 No. , 2005 43
1
Division 8--Conflict of interests
2
68 Material personal interest--Board member's duty to disclose
3
Board member's duty to notify other Board members of material
4
personal interest when conflict arises
5
(1) A Board member who has a material personal interest in a matter
6
that relates to the affairs of the Board must give the other Board
7
members notice of the interest unless subsection (2) says
8
otherwise.
9
(2) The Board member does not need to give notice of an interest
10
under subsection (1) if:
11
(a) the interest relates to a contract that insures, or would insure,
12
the Board member against liabilities the Board member
13
incurs as a Board member (but only if the contract does not
14
make the Board the insurer); or
15
(b) all the following conditions are satisfied:
16
(i) the Board member has already given notice of the
17
nature and extent of the interest and its relation to the
18
affairs of the Board under subsection (1);
19
(ii) if a person who was not a Board member at the time
20
when the notice under subsection (1) was given is
21
appointed as a Board member--the notice is given to
22
that person;
23
(iii) the nature or extent of the interest has not materially
24
increased above that disclosed in the notice; or
25
(c) the Board member has given a standing notice of the nature
26
and extent of the interest under section 69 and the notice is
27
still effective in relation to the interest.
28
(3) The notice required by subsection (1) must:
29
(a) give details of:
30
(i) the nature and extent of the interest; and
31
(ii) the relation of the interest to the affairs of the Board;
32
and
33
Part 4 The Future Fund Board of Guardians
Division 8 Conflict of interests
Section 69
44 Future Fund Bill 2005 No. , 2005
(b) be given at a Board meeting as soon as practicable after the
1
Board member becomes aware of his or her interest in the
2
matter.
3
The details must be recorded in the minutes of the meeting.
4
Effect of contravention by Board member
5
(4) A contravention of this section by a Board member does not affect
6
the validity of any transaction or resolution.
7
69 Board member may give other Board members standing notice
8
about an interest
9
Power to give notice
10
(1) A Board member who has an interest in a matter may give the
11
other Board members standing notice of the nature and extent of
12
the interest in the matter in accordance with subsection (2). The
13
notice may be given at any time and whether or not the matter
14
relates to the affairs of the Board at the time the notice is given.
15
Note:
The standing notice may be given to the other Board members before
16
the interest becomes a material personal interest.
17
(2) The notice under subsection (1) must:
18
(a) give details of the nature and extent of the interest; and
19
(b)
be
given:
20
(i) at a Board meeting (either orally or in writing); or
21
(ii) to the other Board members individually in writing.
22
The standing notice is given under subparagraph (b)(ii) when it has
23
been given to every Board member.
24
Standing notice must be tabled at meeting if given to Board
25
members individually
26
(3) If the standing notice is given to the other Board members
27
individually in writing it must be tabled at the next Board meeting
28
after it is given.
29
The Future Fund Board of Guardians Part 4
Conflict of interests Division 8
Section 70
Future Fund Bill 2005 No. , 2005 45
Nature and extent of interest must be recorded in minutes
1
(4) The Board member must ensure that the nature and extent of the
2
interest disclosed in the standing notice is recorded in the minutes
3
of the meeting at which the standing notice is given or tabled.
4
Dates of effect and expiry of standing notice
5
(5)
The
standing
notice:
6
(a) takes effect as soon as it is given; and
7
(b) ceases to have effect if a person who was not a Board
8
member at the time when the notice was given is appointed
9
as a Board member.
10
A standing notice that ceases to have effect under paragraph (b)
11
commences to have effect again if it is given to the person referred
12
to in that paragraph.
13
Effect of material increase in nature or extent of interest
14
(6) The standing notice ceases to have effect in relation to a particular
15
interest if the nature or extent of the interest materially increases
16
above that disclosed in the notice.
17
Effect of contravention by Board member
18
(7) A contravention of this section by a Board member does not affect
19
the validity of any transaction or resolution.
20
70 Interaction of sections 68 and 69 with other laws etc.
21
Sections 68 and 69 have effect in addition to, and not in derogation
22
of, any general law rule about conflicts of interest.
23
71 Restrictions on voting
24
Restrictions on voting and being present
25
(1) A Board member who has a material personal interest in a matter
26
that is being considered at a Board meeting must not:
27
(a) be present while the matter is being considered at the
28
meeting; or
29
Part 4 The Future Fund Board of Guardians
Division 8 Conflict of interests
Section 72
46 Future Fund Bill 2005 No. , 2005
(b) vote on the matter;
1
unless:
2
(c) subsection (2) or (3) allows the Board member to be present;
3
or
4
(d) the interest does not need to be disclosed under section 68.
5
Participation with approval of other Board members
6
(2) The Board member may be present and vote if Board members
7
who do not have a material personal interest in the matter have
8
passed a resolution that:
9
(a) identifies the Board member, the nature and extent of the
10
Board member's interest in the matter and its relation to the
11
affairs of the Board; and
12
(b) states that those Board members are satisfied that the interest
13
should not disqualify the Board member from voting or being
14
present.
15
Participation with Ministerial approval
16
(3) The Board member may be present and vote if the Board member
17
is so entitled under a declaration or order made by the responsible
18
Ministers under section 72.
19
Effect of contravention by Board member
20
(4) A contravention by a Board member of:
21
(a) this section; or
22
(b) a condition attached to a declaration or order made by the
23
responsible Ministers under section 72;
24
does not affect the validity of any resolution.
25
72 Ministerial power to make declarations and class orders
26
Ministerial power to make specific declarations
27
(1) The responsible Ministers may declare in writing that a Board
28
member who has a material personal interest in a matter that is
29
being, or is to be, considered at a Board meeting may, despite the
30
Board member's interest, be present while the matter is being
31
The Future Fund Board of Guardians Part 4
Conflict of interests Division 8
Section 72
Future Fund Bill 2005 No. , 2005 47
considered at the meeting, vote on the matter, or both be present
1
and vote. However, the responsible Ministers may only make the
2
declaration if:
3
(a) the number of Board members entitled to be present and vote
4
on the matter would be less than the quorum for a Board
5
meeting if the Board member were not allowed to vote on the
6
matter at the meeting; and
7
(b) the matter needs to be dealt with urgently, or if there is some
8
other compelling reason for the matter being dealt with at the
9
Board meeting.
10
Note:
For variation and revocation, see subsection 33(3) of the Acts
11
Interpretation Act 1901.
12
(2) The declaration may:
13
(a) apply to all or only some of the Board members; or
14
(b) specify conditions that the Board or Board member must
15
comply with.
16
(3) The declaration is not a legislative instrument for the purposes of
17
the Legislative Instruments Act 2003.
18
Ministerial power to make class orders
19
(4) The responsible Ministers may make an order in writing that
20
enables Board members who have a material personal interest in a
21
matter to be present while the matter is being considered at a Board
22
meeting, vote on that matter, or both be present and vote. The order
23
may be made in respect of a specified class of Board members,
24
resolutions or interests.
25
Note:
For variation and revocation, see subsection 33(3) of the Acts
26
Interpretation Act 1901.
27
(5) The order may be expressed to be subject to conditions.
28
(6) The nominated Minister must cause a copy of the order to be
29
published on the Internet.
30
(7) The order is not a legislative instrument for the purposes of the
31
Legislative Instruments Act 2003.
32
Part 5 The Future Fund Management Agency
Division 1 Introduction
Section 73
48 Future Fund Bill 2005 No. , 2005
1
Part 5--The Future Fund Management Agency
2
Division 1--Introduction
3
73 Simplified outline
4
The following is a simplified outline of this Part:
5
·
This Part establishes the Future Fund Management Agency.
6
·
The Agency is responsible for assisting and advising the
7
Board.
8
The Future Fund Management Agency Part 5
Establishment and functions of the Future Fund Management Agency Division 2
Section 74
Future Fund Bill 2005 No. , 2005 49
1
Division 2--Establishment and functions of the Future
2
Fund Management Agency
3
74 Establishment of the Future Fund Management Agency
4
(1) The Future Fund Management Agency is established by this
5
section.
6
(2) The Agency consists of:
7
(a) the Chair; and
8
(b) the staff of the Future Fund Management Agency.
9
Note:
The Future Fund Management Agency does not have a legal identity
10
separate from the Commonwealth.
11
75 Functions of the Agency
12
(1) The Agency has the following functions:
13
(a) to make such arrangements as are necessary to give effect to
14
the decisions of the Board;
15
(b) to provide administrative services to the Board;
16
(c) to provide information to the Board;
17
(d) to advise the Board about the performance of any of the
18
Board's functions;
19
(e) to make resources and facilities (including meeting facilities,
20
communication facilities, secretariat services and clerical
21
assistance) available to the Board;
22
(f) such other functions as are conferred on the Agency by this
23
Act;
24
(g) to do anything incidental to or conducive to the performance
25
of any of the above functions.
26
(2) In performing its functions, the Agency must act in accordance
27
with any policies determined, and any directions given, by the
28
Board.
29
Part 5 The Future Fund Management Agency
Division 3 Management and staff of the Future Fund Management Agency
Section 76
50 Future Fund Bill 2005 No. , 2005
1
Division 3--Management and staff of the Future Fund
2
Management Agency
3
76 Duties of the Chair
4
The Chair, under the Minister, is responsible for managing the
5
Agency.
6
77 Staff of the Agency
7
(1) The staff of the Agency are persons engaged under the Public
8
Service Act 1999.
9
(2) For the purposes of the Public Service Act 1999:
10
(a) the Chair and the staff of the Agency together constitute a
11
Statutory Agency; and
12
(b) the Chair is the Head of that Statutory Agency.
13
78 Consultants and persons seconded to the Agency
14
(1) The Chair may, on behalf of the Commonwealth, engage
15
consultants to perform services for the Agency in connection with
16
the performance of any of its functions.
17
(2) The terms and conditions of engagement are as determined in
18
writing by the Chair.
19
Note:
For variation and revocation, see subsection 33(3) of the Acts
20
Interpretation Act 1901.
21
(3) The Agency may also be assisted:
22
(a) by officers and employees of Agencies (within the meaning
23
of the Public Service Act 1999); or
24
(b) by officers and employees of authorities of the
25
Commonwealth; or
26
(c) by employees of Commonwealth companies;
27
whose services are made available to the Agency in connection
28
with the performance of any of its functions.
29
The Future Fund Management Agency Part 5
Management and staff of the Future Fund Management Agency Division 3
Section 79
Future Fund Bill 2005 No. , 2005 51
79 Chair not subject to direction by the Board on certain matters
1
To avoid doubt, the Chair is not subject to direction by the Board
2
in relation to the Chair's performance of functions, or exercise of
3
powers, under:
4
(a)
the
Financial Management and Accountability Act 1997; or
5
(b)
the
Public Service Act 1999;
6
in relation to the Agency.
7
Part 5 The Future Fund Management Agency
Division 4 Other provisions
Section 80
52 Future Fund Bill 2005 No. , 2005
1
Division 4--Other provisions
2
80 Application of the Financial Management and Accountability Act
3
1997
4
To avoid doubt, sections 45, 46, 47, 48, 49, 50 and 57 of the
5
Financial Management and Accountability Act 1997 have effect as
6
if:
7
(a) the Board and the Future Fund Management Agency were a
8
single Agency; and
9
(b) the Chair were the Chief Executive of that single Agency;
10
and
11
(c) an annual report under section 80 of this Act were an annual
12
report of that single Agency; and
13
(d) in a case where the Future Fund Management Agency is a
14
prescribed Agency for the purposes of that Act--the Future
15
Fund Management Agency were not an Agency in its own
16
right.
17
Note:
This means that there will be:
18
(a)
a single fraud control plan for both the Board and the Agency;
19
and
20
(b)
a single audit committee for both the Board and the Agency; and
21
(c)
a single set of accounts and records for both the Board and the
22
Agency; and
23
(d)
a single set of annual financial statements in relation to both the
24
Board and the Agency; and
25
(e)
a single set of additional financial statements in relation to both
26
the Board and the Agency (if required by the Finance Minister);
27
and
28
(f)
auditing of the single set of annual financial statements.
29
81 Annual report
30
(1) The Chair must, as soon as practicable after the end of each
31
financial year, prepare and give to the nominated Minister a report
32
of:
33
(a) the Agency's operations; and
34
The Future Fund Management Agency Part 5
Other provisions Division 4
Section 82
Future Fund Bill 2005 No. , 2005 53
(b) the Board's operations; and
1
(c) the performance of the investments of the Fund; and
2
(d) the total amount debited from the Fund Account for the
3
purpose mentioned in paragraph 2(c) of Schedule 2; and
4
(e) the total amount debited from the Fund Account for the
5
purpose mentioned in paragraph 2(g) of Schedule 2; and
6
(f) the total amount debited from the Fund Account for the
7
purpose mentioned in paragraph 2(k) of Schedule 2; and
8
(g) the total amount debited from the Fund Account for the
9
purpose mentioned in paragraph 2(l) of Schedule 2; and
10
(h) the total amount debited from the Fund Account for the
11
purpose mentioned in paragraph 2(m) of Schedule 2;
12
during the financial year.
13
Note:
See also section 34C of the Acts Interpretation Act 1901.
14
(2) A report under this section must include a benchmark in relation to
15
the amounts referred to in paragraphs (1)(d) to (h).
16
(3) The nominated Minister must cause a copy of each report under
17
this section to be tabled in each House of the Parliament within 15
18
sitting days of that House after receiving the report.
19
82 Consultants and advisers to the Board
20
Consultants
21
(1) The Chair may, on behalf of the Commonwealth, engage
22
consultants to perform services for the Board in connection with
23
the performance of any of its functions.
24
(2) The terms and conditions of engagement are as determined in
25
writing by the Chair.
26
Note:
For variation and revocation, see subsection 33(3) of the Acts
27
Interpretation Act 1901.
28
Advisers
29
(3) The Chair may, on behalf of the Commonwealth, engage persons
30
to provide professional or investment advice to the Board in
31
connection with the performance of any of its functions.
32
Part 5 The Future Fund Management Agency
Division 4 Other provisions
Section 82
54 Future Fund Bill 2005 No. , 2005
(4) The terms and conditions of engagement are as determined in
1
writing by the Chair.
2
Note:
For variation and revocation, see subsection 33(3) of the Acts
3
Interpretation Act 1901.
4
Miscellaneous Part 6
Section 83
Future Fund Bill 2005 No. , 2005 55
1
Part 6--Miscellaneous
2
3
83 Nominated Minister
4
(1) As soon as practicable after the commencement of this subsection,
5
the responsible Ministers must, by writing, determine that one of
6
them is to be the nominated Minister for the purposes of this Act.
7
(2) A determination under subsection (1) may be varied, but not
8
revoked, in accordance with subsection 33(3) of the Acts
9
Interpretation Act 1901.
10
(3) A determination under subsection (1) is not a legislative instrument
11
for the purposes of the Legislative Instruments Act 2003.
12
(4) The nominated Minister may give the other responsible Minister:
13
(a) a report under subsection 54(1) or 55(2); or
14
(b) a document under subsection 54(2) or 55(2); or
15
(c) any other information or document obtained by the
16
nominated Minister under this Act.
17
84 Miscellaneous receipts to be credited to the Fund Account
18
If:
19
(a) the Board receives an amount of money; and
20
(b) another provision of this Act does not require the amount to
21
be credited to the Fund Account;
22
the amount is to be credited to the Fund Account.
23
85 Regulations
24
The Governor-General may make regulations prescribing matters:
25
(a) required or permitted to be prescribed by this Act; or
26
(b) necessary or convenient to be prescribed for carrying out or
27
giving effect to this Act.
28
Schedule 1 Credits of amounts, and transfers of financial assets, to the Future Fund
Part 1 Introduction
Clause 1
56 Future Fund Bill 2005 No. , 2005
Schedule 1--Credits of amounts, and
1
transfers of financial assets, to the
2
Future Fund
3
Note:
See section 13.
4
Part 1--Introduction
5
6
1 Simplified outline
7
The following is a simplified outline of this Schedule:
8
·
An initial amount of $18 billion must be credited to the Fund
9
Account.
10
·
The responsible Ministers may determine that additional
11
amounts are to be credited to the Fund Account, so long as the
12
additional amounts do not result in the balance of the Fund
13
exceeding the target asset level.
14
·
The responsible Ministers may transfer
15
Commonwealth-owned financial assets to the Fund.
16
Note:
The target asset level is specified in a declaration (a target asset level
17
declaration) given by the designated actuary under Schedule 3. The
18
target asset level represents the amount that is expected to offset the
19
present value of projected unfunded superannuation liabilities.
20
Credits of amounts, and transfers of financial assets, to the Future Fund Schedule 1
Credits of amounts to the Future Fund Part 2
Clause 2
Future Fund Bill 2005 No. , 2005 57
1
Part 2--Credits of amounts to the Future Fund
2
3
2 Credit of $18 billion to the Fund Account
4
(1) Before 1 July 2006, the responsible Ministers must:
5
(a) by writing, determine that $18 billion is to be credited to the
6
Fund Account on a specified day; or
7
(b) by writing, determine that $18 billion is to be credited to the
8
Fund Account in specified instalments on specified days.
9
(2) A day must not be specified under paragraph (1)(a) or (b) unless
10
the day occurs before 1 July 2006.
11
(3) A determination under subclause (1) is irrevocable.
12
(4) A determination under subclause (1) is a legislative instrument for
13
the purposes of the Legislative Instruments Act 2003, but
14
section 42 of that Act does not apply to the determination.
15
3 Credit of additional amounts to the Fund Account--Ministerial
16
determinations
17
(1) If a target asset level declaration is in force for a financial year, the
18
responsible Ministers may, by writing, determine that:
19
(a) a specified amount is to be credited to the Fund Account on a
20
specified day in the financial year; or
21
(b) a specified amount is to be credited to the Fund Account in
22
specified instalments on specified days in the financial year.
23
Note:
A target asset level declaration is given by the designated actuary
24
under Schedule 3.
25
(2) The responsible Ministers must not make a determination under
26
subclause (1) in relation to a financial year unless the sum of:
27
(a) the balance of the Fund at the start of a day that:
28
(i) is identified in the determination as the balance day for
29
the determination; and
30
Schedule 1 Credits of amounts, and transfers of financial assets, to the Future Fund
Part 2 Credits of amounts to the Future Fund
Clause 4
58 Future Fund Bill 2005 No. , 2005
(ii) is not earlier than 3 months before the day on which the
1
determination is made; and
2
(b) the amount specified in the determination; and
3
(c) the value, as at the start of the balance day for the
4
determination, of any financial assets that have been
5
transferred to the Board under subclause 6(1) since the start
6
of the balance day for the determination;
7
does not exceed the target asset level specified in the target asset
8
level declaration that:
9
(d) is in force when the determination is made; and
10
(e) relates to the financial year.
11
(3) The responsible Ministers must not make a determination under
12
subclause (1) if another determination is in force under
13
subclause (1).
14
(4) A determination under subclause (1) may be revoked, but not
15
varied, in accordance with subsection 33(3) of the Acts
16
Interpretation Act 1901.
17
(5) A determination under subclause (1) is a legislative instrument for
18
the purposes of the Legislative Instruments Act 2003, but
19
section 42 of that Act does not apply to the determination.
20
4 Duration of subclause 3(1) determinations
21
(1)
If:
22
(a) a subclause 3(1) determination specifies a day in a financial
23
year in accordance with paragraph 3(1)(a) of this Schedule;
24
and
25
(b) a target asset level declaration for the financial year was in
26
force when the determination was made;
27
the determination ceases to be in force at whichever is the earliest
28
of the following:
29
(c) the end of the specified day;
30
(d) the time when the target asset level declaration ceases to be
31
in force;
32
(e) if the determination is revoked--the time when the
33
determination is revoked.
34
Credits of amounts, and transfers of financial assets, to the Future Fund Schedule 1
Credits of amounts to the Future Fund Part 2
Clause 5
Future Fund Bill 2005 No. , 2005 59
(2)
If:
1
(a) a subclause 3(1) determination specifies 2 or more days in a
2
financial year in accordance with paragraph 3(1)(b) of this
3
Schedule; and
4
(b) a target asset level declaration for the financial year was in
5
force when the determination was made;
6
the determination ceases to be in force at whichever is the earliest
7
of the following:
8
(c) the end of the latest of those specified days;
9
(d) the time when the target asset level declaration ceases to be
10
in force;
11
(e) if the determination is revoked--the time when the
12
determination is revoked.
13
(3) If a determination under subclause 3(1) ceases to be in force, the
14
cessation does not affect the crediting of an amount to the Fund
15
Account before the cessation.
16
5 Credit of amounts to the Fund Account--gifts
17
(1) The Board may accept a gift of money if the nominated Minister,
18
by written notice given to the Board, authorises the acceptance of
19
the gift.
20
(2) An amount accepted under subclause (1) is to be credited to the
21
Fund Account.
22
Schedule 1 Credits of amounts, and transfers of financial assets, to the Future Fund
Part 3 Transfers of financial assets to the Future Fund
Clause 6
60 Future Fund Bill 2005 No. , 2005
1
Part 3--Transfers of financial assets to the Future
2
Fund
3
4
6 Transfers to the Fund--Commonwealth-owned financial assets
5
Transfer of financial assets
6
(1) If a target asset level declaration is in force for a financial year, the
7
responsible Ministers may cause one or more
8
Commonwealth-owned financial assets to be transferred to the
9
Board during the financial year.
10
(2) The responsible Ministers must not cause financial assets to be
11
transferred under subclause (1) during a financial year unless the
12
sum of:
13
(a) the balance of the Fund as at the start of a day that:
14
(i) is identified in a written declaration made by the
15
responsible Ministers as the balance day for the
16
financial assets; and
17
(ii) is not earlier than 3 months before the transfer of the
18
financial assets; and
19
(b) the value, as at the start of the balance day for the financial
20
assets, of the financial assets; and
21
(c) the value, as at the start of the balance day for the
22
first-mentioned financial assets, of any other financial assets
23
that have been transferred to the Board under subclause (1)
24
since the start of the balance day for the first-mentioned
25
financial assets; and
26
(d) any amounts that have been credited to the Fund Account
27
under subclause 2(1) or 3(1) during the period:
28
(i) beginning at the start of the balance day for the
29
first-mentioned financial assets; and
30
(ii) ending immediately before the time when the
31
first-mentioned financial assets are transferred; and
32
(e) if a determination was in force under subclause 2(1) or 3(1)
33
when the first-mentioned financial assets are transferred--so
34
Credits of amounts, and transfers of financial assets, to the Future Fund Schedule 1
Transfers of financial assets to the Future Fund Part 3
Clause 6
Future Fund Bill 2005 No. , 2005 61
much of the amount specified in the determination as had not
1
been credited to the Fund Account before the time when the
2
first-mentioned financial assets are transferred;
3
does not exceed the target asset level specified in the target asset
4
level declaration that:
5
(f) is in force when the first-mentioned financial assets are
6
transferred; and
7
(g) relates to the financial year.
8
Note:
A target asset level declaration is given by the designated actuary
9
under Schedule 3.
10
Investment of the Fund
11
(3) A financial asset transferred to the Board under subclause (1) is
12
taken to be an investment of the Fund.
13
Realisation of financial asset etc.
14
(4) To avoid doubt, if a financial asset is transferred to the Board
15
under subclause (1), this Act does not prevent:
16
(a) the realisation of the financial asset under section 17; or
17
(b) the disposal of the financial asset under a securities lending
18
arrangement entered into under section 27.
19
Telstra sale scheme
20
(5) To avoid doubt, action taken under subclause (1) is not a Telstra
21
sale scheme for the purposes of the Telstra Corporation Act 1991.
22
Publication of details of transfer of financial assets
23
(6) As soon as practicable after financial assets are transferred to the
24
Board under subclause (1), the nominated Minister must cause to
25
be published on the Internet a statement setting out:
26
(a) details of the transfer; and
27
(b) the balance day for the financial assets.
28
Schedule 1 Credits of amounts, and transfers of financial assets, to the Future Fund
Part 3 Transfers of financial assets to the Future Fund
Clause 7
62 Future Fund Bill 2005 No. , 2005
Declaration
1
(7) A declaration under subparagraph (2)(a)(i) is not a legislative
2
instrument for the purposes of the Legislative Instruments Act
3
2003.
4
7 Transfers of financial assets to the Fund--gifts
5
(1) The Board may accept a gift of one or more financial assets if the
6
nominated Minister, by written notice given to the Board,
7
authorises the acceptance of the gift.
8
(2) A financial asset accepted under subclause (1) is taken to be an
9
investment of the Fund.
10
(3) A financial asset accepted under subclause (1) is taken to be
11
transferred to the Board under that subclause.
12
(4) To avoid doubt, if a financial asset is transferred to the Board
13
under subclause (1), this Act does not prevent:
14
(a) the realisation of the financial asset under section 17; or
15
(b) the disposal of the financial asset under a securities lending
16
arrangement entered into under section 27.
17
(5) To avoid doubt, a financial asset may be transferred to the Board
18
under subclause (1) even if the Commonwealth has a beneficial
19
interest in the financial asset.
20
8 Ministerial directions about transferred financial assets
21
(1) If financial assets are or have been transferred to the Board under
22
subclause 6(1) or 7(1), the nominated Minister may give the Board
23
written directions about the financial assets.
24
Note:
For variation and revocation, see subsection 33(3) of the Acts
25
Interpretation Act 1901.
26
(2) A direction under subclause (1) may:
27
(a) require the Board not to realise the financial assets before the
28
end of a specified period; or
29
(b) relate to the exercise by the Board of specified:
30
(i) rights (including voting rights); or
31
Credits of amounts, and transfers of financial assets, to the Future Fund Schedule 1
Transfers of financial assets to the Future Fund Part 3
Clause 9
Future Fund Bill 2005 No. , 2005 63
(ii)
powers;
1
conferred on the Board in its capacity as the holder of the
2
financial assets.
3
(3) Subclause (2) does not limit subclause (1).
4
(4) Paragraph (2)(a) has effect despite subclauses 6(4) and 7(4).
5
(5) A direction under subclause (1) prevails over subsection 18(10) to
6
the extent of any inconsistency.
7
(6) The nominated Minister must not give a direction under
8
subclause (1) that is inconsistent with this Act (other than
9
subsection 18(10)).
10
(7) The Board must comply with a direction under subclause (1).
11
(8) A failure to comply with a direction under subclause (1) does not
12
affect the validity of any transaction.
13
(9) This clause does not limit subsection 18(1).
14
(10) As soon as practicable after a direction is given under
15
subclause (1), the Chair must cause a copy of the direction to be
16
published on the Internet.
17
(11) A direction under subclause (1) is not a legislative instrument for
18
the purposes of the Legislative Instruments Act 2003.
19
9 Continuing effect of instruments relating to transferred financial
20
assets
21
(1) If financial assets are transferred to the Board under subclause
22
6(1), the nominated Minister may, by writing, declare that a
23
specified instrument relating to the assets continues to have effect
24
after the transfer as if a reference in the instrument to the
25
Commonwealth were a reference to the Board.
26
(2) A declaration under subclause (1) has effect accordingly.
27
(3) A declaration under subclause (1) is not a legislative instrument for
28
the purposes of the Legislative Instruments Act 2003.
29
Schedule 2 Debits of amounts from the Future Fund
Clause 1
64 Future Fund Bill 2005 No. , 2005
1
Schedule 2--Debits of amounts from the
2
Future Fund
3
Note:
See section 13.
4
5
6
1 Simplified outline
7
The following is a simplified outline of this Schedule:
8
·
Amounts may be debited from the Fund Account in
9
accordance with the purposes of the Fund Account.
10
·
The main purpose of the Fund Account is to discharge
11
unfunded superannuation liabilities from whichever is the
12
earlier of:
13
(a) the time when the balance of the Fund is greater
14
than or equal to the target asset level;
15
(b) 1 July 2020.
16
Note:
The target asset level is specified in a declaration (a target asset level
17
declaration) given by the designated actuary under Schedule 3. The
18
target asset level represents the amount that is expected to offset the
19
present value of projected unfunded superannuation liabilities.
20
2 Purposes of the Fund Account
21
The purposes of the Fund Account are as follows:
22
(a) discharging, in whole or in part, an unfunded superannuation
23
liability that becomes payable in a financial year, where:
24
(i) the financial year ends before 1 July 2020; and
25
(ii) a target asset level declaration is in force for the
26
financial year; and
27
(iii) the balance of the Fund, as at the start of the financial
28
year, is not less than the target asset level specified in
29
the target asset level declaration;
30
Debits of amounts from the Future Fund Schedule 2
Clause 3
Future Fund Bill 2005 No. , 2005 65
(b) discharging, in whole or in part, an unfunded superannuation
1
liability that becomes payable in a financial year beginning
2
on or after 1 July 2020;
3
(c) paying remuneration and allowances of Board members;
4
(d) paying the costs of, or incidental to, the acquisition of
5
financial assets under section 16;
6
(e) paying expenses of an investment of the Fund;
7
(f) paying the costs of, or incidental to, the acquisition of
8
derivatives under section 25;
9
(g) paying or discharging the costs, expenses and other
10
obligations incurred by the Board under a contract between
11
the Board and an investment manager;
12
(h) paying or discharging the costs, expenses and other
13
obligations incurred in connection with the establishment,
14
maintenance or operation of a bank account of the Board;
15
(i) paying a premium in respect of a contract of insurance
16
entered into by the Board;
17
(j) paying or discharging any other costs, expenses, obligations
18
or liabilities incurred by the Board;
19
(k) paying remuneration, and other employment-related costs
20
and expenses, in respect of members of the staff of the
21
Agency;
22
(l) paying or discharging the costs, expenses and other
23
obligations incurred by the Commonwealth under a contract
24
entered into under section 78 or 82;
25
(m) paying or discharging the costs, expenses and other
26
obligations incurred by the Commonwealth in connection
27
with the establishment or operation of the Agency.
28
Note 1:
See section 21 of the Financial Management and Accountability Act
29
1997 (debits from Special Accounts).
30
Note 2:
A target asset level declaration is given by the designated actuary
31
under Schedule 3.
32
3 Board must ensure that there is sufficient money to cover the main
33
purposes of the Fund Account
34
The Board must take all reasonable steps to ensure that, during a
35
financial year to which paragraph 2(a) or (b) of this Schedule
36
Schedule 2 Debits of amounts from the Future Fund
Clause 3
66 Future Fund Bill 2005 No. , 2005
applies, the amount of money standing to the credit of the Fund
1
Account is sufficient to cover the purpose mentioned in that
2
paragraph.
3
Note:
This may require the Board to realise an investment of the Fund in
4
accordance with section 17.
5
Target asset level declarations Schedule 3
Clause 1
Future Fund Bill 2005 No. , 2005 67
1
Schedule 3--Target asset level declarations
2
Note:
See section 13.
3
4
5
1 Simplified outline
6
The following is a simplified outline of this Schedule:
7
·
The designated actuary is an actuary specified in a
8
determination made by the nominated Minister.
9
·
The target asset level is specified in a declaration (a target
10
asset level declaration) given by the designated actuary.
11
·
The target asset level represents the amount that is expected to
12
offset the present value of projected unfunded superannuation
13
liabilities.
14
2 Designated actuary
15
(1) For the purposes of this Act, the designated actuary is an actuary
16
specified in a written determination made by the nominated
17
Minister under this subclause.
18
Note:
For variation and revocation, see subsection 33(3) of the Acts
19
Interpretation Act 1901.
20
(2) A determination under subclause (1) is not a legislative instrument
21
for the purposes of the Legislative Instruments Act 2003.
22
(3) As soon as practicable after a determination is made under
23
subclause (1), the Chair must cause a copy of the determination to
24
be published on the Internet.
25
3 Target asset level declarations
26
(1) The designated actuary may give the responsible Ministers:
27
(a) a written declaration stating that a specified amount is the
28
target asset level for a specified financial year; and
29
Schedule 3 Target asset level declarations
Clause 3
68 Future Fund Bill 2005 No. , 2005
(b) a written statement setting out the designated actuary's
1
reasons for specifying the target asset level.
2
(2) A declaration under subclause (1) is to be known as a target asset
3
level declaration for the financial year concerned.
4
(3) 2 or more target asset level declarations may be set out in the same
5
document.
6
(4) A target asset level declaration for a particular financial year may
7
be given before or during the financial year.
8
(5) A target asset level for a particular financial year must not be
9
specified in a target asset level declaration unless the designated
10
actuary is satisfied that:
11
(a) if the balance of the Fund, as at the start of the financial year,
12
were equal to the target asset level for the financial year;
13
the balance of the Fund would (based on the designated actuary's
14
best estimate) be expected to offset:
15
(b) the present value of projected unfunded superannuation
16
liabilities in respect of services rendered before the start of
17
the financial year.
18
(6) A target asset level declaration for a particular financial year
19
remains in force until whichever is the earliest of the following:
20
(a) the end of the financial year;
21
(b) the occurrence of an event specified in the declaration;
22
(c) if the declaration is revoked--the time when the declaration
23
is revoked.
24
(7) The designated actuary must take all reasonable steps to ensure
25
that:
26
(a) the first target asset level declaration is given as soon as
27
practicable after the commencement of this clause; and
28
(b) if a target asset level declaration for a particular financial
29
year ceases to be in force before the end of the financial
30
year--a new target asset level declaration for the financial
31
year is given as soon as practicable afterwards; and
32
(c) not more than one target asset level declaration for the same
33
financial year is in force at the same time; and
34
Target asset level declarations Schedule 3
Clause 4
Future Fund Bill 2005 No. , 2005 69
(d) not more than 5 target asset level declarations for different
1
financial years are in force at the same time.
2
(8) A target asset level declaration may be revoked, but not varied, in
3
accordance with subsection 33(3) of the Acts Interpretation Act
4
1901.
5
(9) A target asset level declaration is not a legislative instrument for
6
the purposes of the Legislative Instruments Act 2003.
7
(10) As soon as practicable after receiving:
8
(a) a target asset level declaration; and
9
(b) a statement setting out the designated actuary's reasons for
10
specifying the target asset level;
11
the nominated Minister must cause:
12
(c) a copy of the declaration; and
13
(d) a copy of the statement;
14
to be published on the Internet.
15
(11) If a target asset level declaration ceases to be in force, the cessation
16
does not affect:
17
(a) the crediting of an amount to the Fund Account; or
18
(b) the transfer of a financial asset to the Board; or
19
(c) the debiting of an amount from the Fund Account;
20
before the cessation.
21
4 Reliance on projections when making target asset level
22
declarations etc.
23
In making a target asset level declaration, the designated actuary
24
may:
25
(a) rely on, or have regard to, the projections, findings,
26
estimates, opinions or conclusions of any other actuaries who
27
have conducted, or are conducting, actuarial reviews of:
28
(i) a scheme under which superannuation benefits are
29
payable; or
30
(ii) a South Australian railways arrangement; or
31
(iii) a Tasmanian railways arrangement; and
32
Schedule 3 Target asset level declarations
Clause 4
70 Future Fund Bill 2005 No. , 2005
(b) make such assumptions and estimates as the designated
1
actuary considers reasonable; and
2
(c) have regard to such other matters as the designated actuary
3
considers relevant.
4
Future Fund Bill 2005 No. , 2005 1
1