Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (PRODUCTIVITY BENEFIT) ALTERNATIVE ARRANGEMENTS DECLARATION NO. 6 1993 NO. 34

STATUTORY RULES 1993 No. 34

SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988

ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE

DECLARATION UNDER SUBSECTIONS 4A (1) AND (2)

PERFORMANCE PAY SUPERANNUATION

The Superannuation (Productivity Benefit) Act 1988 (the Act) provides the mechanism by which the minimum level employer superannuation contribution is made available to Commonwealth sector employees who have no other employer-sponsored superannuation coverage.

The designated employers of such employees are required to pay to either the superannuation fund nominated by the Minister for Finance or a fund approved by the Minister periodic contributions based on the salary of the employee as well as a once only payment of entitlements accrued under the Act in respect of service prior to the date when the employees join the fund.

Subsection 4A(1) of the Act allows the Minister to declare that a group of employees who come within the ambit of the Act (qualified employees) is a specified class of employees to which the normal provisions of the Act relating to fund membership and benefit accrual do not apply.

Subsection 4(A)2 of the Act allows the Minister to specify that particular superannuation arrangements apply to declared classes of qualified employees.

This Declaration provides that qualified employees who are entitled to receive performance pay are a class of employees (members) who may elect to have performance pay taken into account for superannuation purposes. If members wish to do so they must elect by written notice; if no election is made, superannuation is not provided. The Declaration provides that the superannuation payments of members who make such an election, and who are not fixed term appointees to the Senior Executive Service to whom superannuation benefits are provided under section 45 of the Public Service Act 1922 subject to the Minister's approval under the Superannuation Benefits (Supervisory Mechanisms) Act 1990, must be made to a fund approved under the Act. Employees in the latter category may have their performance pay superannuation paid either in accordance with the arrangement approved for them tinder the Superannuation Benefits (Supervisory Mechanisms) Act 1990 or to a fund approved under the Act.

Members who receive performance pay before 25 February 1993 and who wish to take the superannuation option must elect to do so within 3 months of receiving that performance pay. Members receiving performance pay after that date must make an election before the performance pay is paid.

If a member makes an election his or her designated employer must pay 5 per cent of the member's performance pay, together with an amount additional to the performance pay and equal to 15 per cent of the performance pay to an approved fund.

Any member entitled under the Act to receive continuing contributions otherwise than in respect of performance pay remains entitled to receive those contributions as if this Declaration did not apply.

The declaration takes effect from 17 December 1992. The retrospective effect of this declaration does not affect in a prejudicial manner the rights of any person other than the Commonwealth.