PARLIAMENTARY SUPERANNUATION AMENDMENT (REMOVAL OF EXCESSIVE SUPER) BILL 2009

2008-2009

The Parliament of the

Commonwealth of Australia

THE SENATE

Presented and read a first time

Parliamentary Superannuation

Amendment (Removal of Excessive

Super) Bill 2009

No. , 2009

(Senator Fielding)

A Bill for an Act to amend the Parliamentary

Contributory Superannuation Act 1948 to remove

excessive superannuation arrangements for federal

politicians, and for related purposes

i Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No.

, 2009

Contents

Short title ............................................................................................ 1

Commencement .................................................................................. 1

Objects of Act ..................................................................................... 1

Schedule(s) ......................................................................................... 2

Schedule 1--Amendme nt of the Parliame ntary Contributory

Superannuation Act 1948

Part 1--Commuted benefits

Part 2--Superannuation arrangements from 1 July 2009

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 1

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A Bill for an Act to amend the Parliamentary

Contributory Superannuation Act 1948 to remove

excessive superannuation arrangements for federal

politicians, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Parliamentary Superannuation

Amendment (Removal of Excessive Super) Act 2009.

2 Commence ment

This Act commences on the day on which it receives the Royal

Assent.

2 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

3 Objects of Act

The objects of this Act are:

(a) to terminate the retirement scheme constituted by the

Parliamentary Contributory Superannuation Act 1948 (the

Parliamentary Contributory Superannuation Scheme); and

(b) to require existing members of the Parliamentary

Contributory Superannuation Scheme to choose a complying

superannuation fund in line with the arrangements applying

to new parliamentarians since 2004, under the Parliamentary

Superannuation Act 2004; and

superannuation funds chosen by existing members their

respective commuted superannuation benefits and ongoing

superannuation contributions.

4 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Amend ment of the Parliamentary Contributory Superannuation Act 1948 Schedule 1

Co mmuted benefits Part 1

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 3

Schedule 1

Amendment of the Parliamentary

Contributory Superannuation Act 1948

Part 1

Commuted benefits

1 Subsection 4(1)

Insert:

complying superannuation fund has the same meaning as in the

Parliamentary Superannuation Act 2004.

RSA has the same meaning as in the Retirement Savings Accounts

Act 1997.

termination date means 1 July 2009.

2 After section 18B

Insert:

18C Calculation of accrued benefits by 30 June 2009

(1) The Trust must calculate the monetary value of the commuted

benefits under this Act accruing to each member of the retirement

scheme constituted by this Act as at 30 June 2009, as if each

member ceased to be entitled to a parliamentary allowance on that

date and was therefore entitled to a retiring allowance as at that

date.

(2) Calculations under subsection (1) must take into account all

matters that would be taken into account in calculating benefits

under section 18.

(3) The Trust must by 30 June 2009 provide to each member a

statement of his or her commuted benefits calculated under

subsection (1).

Schedule 1 A mendment of the Parliamentary Contributory Superannuation Act 1948

Part 1 Co mmuted benefits

4 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

18D Closing off contributions to retirement scheme constituted by

this Act

A member is not entitled or required to make contributions to the

retirement scheme constituted by this Act after the payment of

parliamentary allowance received by the member on 30 June 2009.

3 After Part V

Insert:

Part VAAA--Payment of commuted benefits on

termination date

22BA Meaning of fund--includes schemes and accounts

In this Part:

fund includes a scheme or account.

22BB Members to choose funds for payment of commuted benefits

(1) A person who is a member of the retirement scheme constituted by

this Act on 31 May 2009 may by 21 June 2009 choose a fund (the

chosen fund) to be the fund to which the member's commuted

benefits calculated under subsection 18C(1) (the transfer amount)

are to be paid.

(2) The chosen fund must, at the time the choice is made, be either:

(a) a complying superannuation fund, other than a self managed

superannuation fund; or

(b) an RSA.

(3) There can be only one chosen fund in relation to a member for the

purposes of this section.

(4) A choice of a fund must be made by notice in writing (a choice

notice) signed by the member.

(5) The notice must:

(a) specify the name of, and contact details for, the chosen fund;

and

Amend ment of the Parliamentary Contributory Superannuation Act 1948 Schedule 1

Co mmuted benefits Part 1

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 5

(b) contain such other information (if any) as is required by the

regulations.

(6) The notice must be accompanied by evidence that the chosen fund

will accept the transfer amount.

(7) The notice must be given to the Trust.

(8) If a member fails to choose a fund under this section by 21 June

2009, the transfer amount will be paid to the default fund declared

under section 22BC.

22BC Declaration of the default fund

(1) The Minister for Finance must, by notice in writing signed by the

Minister, declare that a fund or scheme is the default fund for the

purposes of this Part. At the time the declaration is made, the fund

or scheme must be a complying superannuation fund (other than a

self managed fund).

(2) The Minister must make a declaration under subsection (1) within

7 days after the commencement of this section.

22BD Transfer amounts to be paid by Commonwealth

Payments of transfer amounts provided for by this Part must be

made by the Commonwealth.

22BE Transfer amounts to be paid on 1 July 2009

The Commonwealth must pay the transfer amount of a member to

the fund chosen by the member under section 22BB or the default

fund declared under section 22BC, as the case may be, on 1 July

2009.

Schedule 1 A mendment of the Parliamentary Contributory Superannuation Act 1948

Part 2 Superannuation arrangements fro m 1 July 2009

6 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

Part 2

Superannuation arrangements from 1 July

2009

4 After Part VI

Insert:

Part VII--Superannuation arrangements from

1 July 2009 for persons who on 30 June

2009 are members of retirement scheme

constituted by this Act as at that date

Division 1--Preliminary

30 Persons to whom this Part applies

This Part applies to a person in respect of a month from and

including July 2009 if the person:

(a) on 30 June 2009 is a member of the retirement scheme

constituted by this Act as at that date; and

(b) is entitled to a parliamentary allowance for the relevant

month or for part of the relevant month.

31 Definitions

(1) In this Part:

basic contributions fund, in relation to a member at a particular

time, means:

(a) if a choice notice given by the member is in force under

Division 3 of this Part at that time--the fund that is, at that

time, specified in the notice as the chosen fund; or

(b) otherwise--the fund or scheme that is, at that time, the

default fund under Division 4 of this Part.

member means a person who on 30 June 2009 is a member of the

retirement scheme constituted by this Act as at that date.

Amend ment of the Parliamentary Contributory Superannuation Act 1948 Schedule 1

Superannuation arrangements from 1 July 2009 Part 2

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 7

(2) Subject to subsection (1), an expression used in this Part has the

same meaning as it has in the Parliamentary Superannuation Act

2004.

Division 2--Commonwealth's obligations to make

contributions

32 The Commonwealth's obligations to make contributions

(1) If this Part applies to the member in respect of a month, the

Commonwealth must make a contribution, in respect of the

member, to the basic contributions fund of the member.

Note:

The basic contributions fund of the member is defined in section 31.

It will be either a fund, scheme or account chosen by the member

under Division 3 or the default fund under Division 4.

(2) Subject to subsections (3) and (4), the amount of the contribution is

an amount equal to 15.4% of the sum of:

(a) the amount of parliamentary allowance to which the person is

entitled in respect of the month; and

(b) the amount (if any) of salary to which the member is entitled

because he or she was a Minister of State for some or all of

the month; and

the member is entitled because he or she was an office holder

for some or all of the month.

(3) For the purpose of paragraph (2)(a), any reduction of the member's

entitlement to parliamentary allowance under Division 2 of Part 1

of Schedule 3 to the Remuneration and Allowances Act 1990

(salary sacrifice) is to be disregarded.

(4) An amount of parliamentary allowance, salary, or allowance by

way of salary, is not to be taken into account under subsection (2)

to the extent (if any) that it does not count as salary or wages for

the purposes of section 19 of the Superannuation Guarantee

(Administration) Act 1992.

(5) If:

Schedule 1 A mendment of the Parliamentary Contributory Superannuation Act 1948

Part 2 Superannuation arrangements fro m 1 July 2009

8 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

(a) this Part applies to the member in respect of one or more of

the months in a quarter (as defined in the Superannuation

Guarantee (Administration) Act 1992); and

(b) the Commonwealth makes contributions as required by this

section in respect of the member and the month or months in

the quarter in respect of which this Part applies; and

superannuation guarantee shortfall, in respect of the member

and the quarter, for the purposes of the Superannuation

Guarantee (Administration) Act 1992;

then, for the purposes of the Superannuation Guarantee

(Administration) Act 1992, the Commonwealth is, by making those

contributions, taken to have reduced its charge percentage for the

quarter to nil under whichever of section 22 or 23 of that Act is

applicable.

(6) Despite anything else in this section, the Commonwealth is not

required by this section to pay contributions to the person's basic

contributions fund if, under the Superannuation Industry

(Supervision) Act 1993 (including the regulations under that Act),

the basic contributions fund is not permitted to receive those

contributions.

Division 3--Choice of funds

33 Meaning of fund--includes schemes and accounts

In this Division:

fund includes a scheme or account.

34 When may a me mber choose a fund?

A member to whom this Part applies may choose a fund as

described in section 35 at any time on or after the day the

Parliamentary Superannuation Legislation Amendment (New

Superannuation Arrangements) Act 2009 is assented to.

Amend ment of the Parliamentary Contributory Superannuation Act 1948 Schedule 1

Superannuation arrangements from 1 July 2009 Part 2

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 9

35 The nature of the choice

(1) The member may choose a fund (the chosen fund) to be the fund

to which contributions are made under this Part in respect of the

member.

Note:

The choice can be varied or revoked (see sections 38 and 39).

(2) The chosen fund must, at the time the choice is made, be either:

(a) a complying superannuation fund, other than a self managed

superannuation fund; or

(b) an RSA.

(3) There can only be one chosen fund at any particular time in

relation to the member.

36 How to make a choice

(1) A choice of a fund must be made by notice in writing (a choice

notice) signed by the member.

(2) The notice must:

(a) specify the name of, and contact details for, the chosen fund;

and

(b) specify the date (the start date) from which the notice is to

have effect, being 1 July 2009, the date the notice is given or

a later date, as the case may be; and

regulations.

(3) The notice must be accompanied by evidence that the chosen fund

will accept contributions under this Part.

(4) The notice must be given to the administering authority.

37 Duration of a choice notice

If sections 34, 35 and 36 are complied with, a choice notice comes

into force on the start date for the notice and remains in force until

whichever of the following occurs first:

(a) the contribution payable under this Part in respect of the

month in which the member next ceases to be entitled to

parliamentary allowance has been paid; or

Schedule 1 A mendment of the Parliamentary Contributory Superannuation Act 1948

Part 2 Superannuation arrangements fro m 1 July 2009

10 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

(b) a revocation of the notice takes effect (see section 39); or

(d) the chosen fund ceases to accept contributions under this

Part; or

(e) the chosen fund ceases to be a complying superannuation

fund or an RSA; or

(f) the chosen fund becomes a self managed superannuation

fund.

38 Variation of a choice notice

(1) The member may vary a choice notice he or she has given by

notice in writing signed by the member and given to the

administering authority.

(2) The only variations that are permitted are:

(a) to change the chosen fund to another fund that is, at the time

the notice is given:

(i) a complying superannuation fund, other than a self

managed superannuation fund; or

(ii) an RSA; or

(b) to change the start date to a later date (but only if the start

date has not already occurred).

(3) The notice of variation must specify a date (the variation date)

from which the variation is to take effect, being the date on which

the notice is given or a later date.

(4) A notice of variation to change the chosen fund to another

complying superannuation fund or RSA (the new fund) must:

(a) specify the name of, and contact details for, the new fund;

and

(b) be accompanied by evidence that the new fund will accept

contributions under this Part.

(5) If the notice of variation complies with this section, it varies the

choice notice accordingly (subject to any later variations) with

effect from the variation date.

Amend ment of the Parliamentary Contributory Superannuation Act 1948 Schedule 1

Superannuation arrangements from 1 July 2009 Part 2

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009 No. ,

2009 11

39 Revocation of a choice notice

(1) The member may revoke a choice notice he or she has given by

notice in writing signed by the member and given to the

administering authority.

(2) The notice of revocation must specify a date from which the

revocation is to take effect, being the date on which the notice of

revocation is given or a later date.

(3) If the notice of revocation complies with this section, the

revocation takes effect on the specified date.

40 Obligation to notify me mber of right to choose a fund

Within 28 days after the day the Parliamentary Superannuation

Legislation Amendment (New Superannuation Arrangements) Act

2009 is assented to, the administering authority must cause each

member to be given a written notice containing the following

information:

(a) a statement that the member may choose a complying

superannuation fund (other than a self managed fund) or an

RSA as the fund to which contributions in respect of the

member will be paid under this Part;

(b) a statement to the effect that if the member does not choose a

fund under section 36 by 31 July 2009, the contributions will

be paid to the fund chosen by the member under

section 22BB, and if the member has not chosen a fund under

that section, the contributions will be paid to the fund that is,

from time to time, the default fund declared under section 42;

regulations.

Division 4--The default fund

41 Failure to choose a fund

(1) If a member fails to choose a fund under section 36 before 31 July

2009, the contributions in respect of the member under this Part

will be paid to the fund chosen by the member under section 22BB.

Schedule 1 A mendment of the Parliamentary Contributory Superannuation Act 1948

Part 2 Superannuation arrangements fro m 1 July 2009

12 Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

No. , 2009

(2) If the member has not chosen a fund under section 36 or 22BB, the

contributions will be paid to the fund that is at that time the default

fund declared under section 42.

42 Declaration of the default fund

(1) The Minister may, by notice in writing signed by the Minister,

declare that a fund or scheme is the default fund for the purposes of

this Part. At the time the declaration is made, the fund or scheme

must be a complying superannuation fund (other than a self

managed fund).

(2) A declaration under subsection (1) must specify the date of effect

of the declaration. The specified date may be the day on which the

declaration is signed, or an earlier or later day.

(3) The Minister must make a declaration under subsection (1) as soon

as practicable after the commencement of this section.

(4) The Minister must ensure that there is only one default fund at any

one time.

(5) The Minister may, by notice in writing signed by the Minister,

revoke a declaration made under subsection (1) at any time.

(6) A revocation under subsection (5) must specify the date of effect of

the revocation. The specified date may be the day on which the

notice is signed, or an earlier or later day.

(7) If the Minister, under subsection (5), revokes a declaration under

subsection (1), the Minister must make another declaration under

subsection (1) which takes effect immediately after the revocation

takes effect.

Commonwealth of Australia Bills

PARLIAMENTARY SUPERANNUATION AMENDMENT (REMOVAL OF EXCESSIVE SUPER) BILL 2009