Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (FORMER CONTRIBUTORS FOR UNITS OF PENSION) REGULATIONS(AMENDMENT) 1992 NO. 268

STATUTORY RULES 1992 No. 268

Issued by the authority of the Minister for Finance

Superannuation Act 1976

Superannuation (Former Contributors for Units of Pension) Regulations (Amendment)

The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to an occupational superannuation scheme for Commonwealth employees and for certain other persons. The superannuation scheme provided for under the 1976 Act has operated since 1 July 1976, having replaced the scheme provided for under the Superannuation Act 1922 (the 1922 Act). Members of the 1976 Act scheme are referred to in that Act as eligible employees.

Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of that Act.

Section 183 of the 1976 Act provides that the regulations may modify the provisions of that Act in relation to a person who, immediately before becoming an eligible employee, was a member of the superannuation scheme provided for under the 1922 Act. The regulations for the purposes of section 183 are contained in the Superannuation (Former Provident Account Contributors) Regulations and the Superannuation (Former Contributors for Units of Pension) Regulations.

The 1922 Act scheme comprised a Pension Scheme for those who met the required medical standard for entry to that scheme and a lump sum Provident Account for those who did not. Persons who were contributors to the 1922 Act Pension Scheme or Provident Account on 30 June 1976 were transferred to the 1976 Act scheme on 1 July 1976.

Special arrangements apply in relation to the transferred contributors. The special arrangements applicable to the transferred Pension Scheme contributors are provided by way of modifications to the 1976 Act contained in the Superannuation (Former Contributors for Units of Pension) Regulations (the Principal Regulations) made under section 183 of that Act.

The Superannuation Legislation Amendment Act 1991 (the Amending Act) amended the 1976 Act to bring the superannuation scheme established under the 1976 Act into line with the spirit of the Occupational Superannuation Standards as well as to streamline administration, correct anomalies and provide greater equity between members of that scheme. The amendments to the 1976 Act included the cessation, from 1 July 2000, of the payment of cash involuntary retirement benefits to persons who have not attained age 55 as well as changes of a technical nature.

The amending Regulations amend the Superannuation (Former Contributors for Units of Pension) Regulations as a consequence of amendments to the 1976 Act by the Amending Act. In addition, the amending Regulations make a number of minor drafting amendments to the Regulations. All the amendments are technical in nature and most follow directly from the amendment of the 1976 Act. The amendments contained in the regulations are explained in the Attachment.

The Amending Act amended the 1976 Act by inserting a new subsection 168(10) which provides that regulations for the purposes of section 183 made within a period of 12 months after that amendment may be expressed to have taken effect from and including the day on which that amendment was made.

In accordance with subsection 168(10) of the 1976 Act, the amending Regulations operate with effect from and including 2 September 1991, the date of commencement of that subsection.

The amending Regulations will not affect the rights of any person (other than the Commonwealth) in a manner prejudicial to that person, nor will they impose any liability on such a person. They are, therefore, in accord with the Acts Interpretation Act 1901.

ATTACHMENT

SUPERANNUATION (FORMER CONTRIBUTORS FOR UNITS OF PENSION) REGULATIONS (AMENDMENT)

THE AMENDING REGULATIONS

REGULATION 1

This provides that the Superannuation (Former Contributors for Units of Pension) Regulations (Amendment) (the Amending Regulations) are taken to have commenced on 2 September 1991.

REGULATION 2

This provides that the Principal Regulations are amended as set out in the Amending Regulations.

SUBREGULATIONS 3.1, 3.7 AND 3.8

These subregulations correct a drafting error which occurred when the Principal Regulations were amended in 1991: the phrase "included that" in the definition of the factor "D" in modified subsections 56(3A), 67(2A) and 68(2A) should have been "included in that".

SUBREGULATION 3.2

This substitutes a reference to "paragraph (1)(a)" of section 59 of the 1976 Act in lieu of "paragraph (a)" to take account of the amendment by the Amending Act which inserted a new subsection 59(2) into the 1976 Act.

SUBREGULATIONS 3.3 TO 3.6 AND SUBREGULATION 3.16

Section 62 of the 1976 Act provides that a person who is deemed to have retired involuntarily may elect to receive his or her total benefit as a lump sum instead of the benefits otherwise payable. The Amending Act amended subsection 62(2) to provide that that subsection applies to a person who ceases to be an eligible employee before 1 July 2000 and inserted a new subsection 62(2A) to provide for benefits in respect of a person who is deemed to have retired involuntarily on or after 1 July 2000.

The Principal Regulations modify subsection 62(2) to provide for the optional lump sum benefit to be calculated differently for certain former contributors to the 1922 Act Pension Scheme. Subregulation 3.3 modifies subsection 62(2A) in the same way that the Principal Regulations modify subsection 62(2).

The Principal Regulations modify the 1976 Act by inserting a subsection 62(2A) to provide for the lump sum benefit to be increased in relation to any non-contributory units held under the 1922 Act by the contributor. As a consequence of the insertion of the new subsection 62(2A) by the Amending Act, subregulations 3.4 and 3.5 have the effect of renumbering the subsection 62(2A) in the Principal Regulations as subsection 62(2AA) and of locating that provision after the new subsection 62(2A).

Subregulation 3.6 extends the provisions in inserted subsection 62(2AA) to cover both pre-1 July 2000 and post-1 July 2000 cases.

Subregulation 3.16 amends the heading of Schedule 2A to the Principal Regulations to reflect the change of citation from subsection 62(2A) to subsection 62(2AA) in respect of the provisions relating to non-contributory units of pension.

SUBREGULATIONS 3.9 TO 3.12

The Amending Act repealed Division 5 of Part VI of the 1976 Act and substituted a new Division 5, including new sections 109AB, 110 and 110AB. These subregulations extend the modifications to the 1976 Act contained in the Principal Regulations to sections 109AB, 110 and 110AB.

Section 109AB deals with the situation where a deceased contributor or pensioner is survived by one spouse and a child or children and at least one of those children is either an eligible child not in the custody, care or control of the spouse or is a partially dependent child.

Subregulation 3.9 modifies section 109AB to provide that the special arrangements contained in the Principal Regulations in respect of spouse's benefits should also apply to spouse's benefits payable under section 109AB.

Section 110 deals with the situation where a deceased contributor or pensioner is survived by more than one spouse and where there are children of the deceased person who are not in the custody, care and control of any of the spouses.

Subregulation 3.10 modifies section 110 to take into account the provisions relating to spouse's benefit attributable to partially dependent children contained in Division 3A of Part VI of the 1976 Act. Division 3A was inserted into the 1976 Act by the Superannuation Legislation Amendment Act 1990.

Subregulation 3.11 modifies subsection 110(15) to provide that the special arrangements contained in the Principal Regulations in relation to orphan's benefit should also apply to orphan's benefit as provided for in that subsection.

Section 110AB provides for increases in the rate of spouse's pension where a person is survived by more than one spouse.

Subregulation 3.12 modifies section 110AB to provide that the special arrangements contained in the Principal Regulations in relation to the annual rate of spouse's pension should also apply to spouse's pension as provided for in that subsection.

SUBREGULATION 3.13

The Amending Act amended section 111 of the 1976 Act by omitting subsection (1) and substituting a new subsection (1) which provides that, where benefits are not payable to dependants on the death of a contributor, a payment of the person's accumulated contributions is made to his or her personal representatives. This subregulation clarifies the first modification to section 111 in the Principal Regulations to take account of the construction of the new subsection 111(1) by providing that the modification is to affect "subsection (1)" rather than "paragraph (b) of sub-section (1)"

SUBREGULATION 3.14

The Superannuation Legislation Amendment Act 1990 substituted a new subsection 115(4) into the 1976 Act which provided for definitions of "eligible child" and "orphan benefit" for the purposes of section 115. Previously subsection 115(4) contained only a definition of "orphan benefit". This subregulation clarifies the intended application of the modifications to the 1976 Act in the Principal Regulations by specifying that the modification to subsection 115(4) refers to the definition of "orphan benefit".

SUBREGULATION 3.15

The Superannuation Legislation Amendment Act 1990 amended the 1976 Act to provide that the annual rate of standard pension payable to an eligible employee who retires before age 60 will be the amount that would have been paid to the person had he or she been age 60 on that date reduced by 3 1/3 percent for each year or part year by which the retirement falls short of age 60. The discount applicable before this amendment was 4 percent. This subregulation amends the Principal Regulations to provide that inserted paragraph 218(1)(b), which provides the special arrangements for the annual rate of standard early retirement pension, reflects that change.