Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS AMENDMENT 1995 NO. 236

STATUTORY RULES 1995 No. 236

Issued by the Authority of the Minister for Finance

Superannuation Act 1976

Superannuation (Former Eligible Employees) Regulations Amendment

The Superannuation Act 19 76 (the Act) makes provision for and in relation to an occupational superannuation scheme, the Commonwealth Superannuation Scheme (the CSS), for certain Commonwealth employees and other persons, including employees of approved authorities.

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

Persons eligible to contribute to the CSS (ie, CSS members) are referred to in the Act as eligible employees.

Section 126A of the Act provides that regulations may modify the Act in its application to or in respect of a person who ceases to be an eligible employee and who immediately after ceasing becomes a member of another superannuation scheme.

Regulations for the purposes of section 126A of the Act are contained in the Superannuation (Former Eligible Employees) Regulations.

The regulations will apply to persons who are employed by Qantas Airways Limited and its subsidiaries and cease to be eligible employees as a result of the sale of Qantas. Provision of superannuation benefits to those persons after sale will be provided under the Qantas Airways Limited Staff Superannuation Plan.

Agreement between Qantas and unions on the provision of post-sale superannuation benefits for relevant former eligible employees included agreement on the CSS options to be put in place.

The regulations provide for the availability of three options. These are

*       the preservation of accrued benefits in the form of a delayed updated pension which is only available in circumstances related to the sale or transfer of a Commonwealth asset or function, or

*       the preservation of accrued benefits in the standard form of CSS deferred benefit, or

*       a refund of accumulated contributions and preservation of the minimum statutory employer funded element.

The amendments contained in the Regulations are explained in the attachment.

The amendments will come into effect on Gazettal.

ATTACHMENT

SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)

The details of the amending Regulations are as follows:

Regulation 1

This provides that the Superannuation (Former Eligible Employees) Regulations (the Principal Regulations) are amended as set out in the amending Regulations.

Regulation 2

This inserts a new amending regulation 15B which modifies the Act in accordance with the amendments set out in an amended Schedule 11 and a new Schedule 13.

The amended provisions specified in Schedule 11 and Schedule 13 will apply in respect of persons who are employed by Qantas Airways Limited or its subsidiaries and who cease to be eligible employees as a result of the Commonwealth ceasing to have a controlling interest in Qantas, ie, the sale.

The amended provisions specified in Schedule 11 do not apply to a person:

*       who makes an election under section 137 of the Act, ie, elect to preserve their superannuation benefits other than in the form of a delayed updated pension, and

*       unless the person elects for a delayed updated pension within 21 days of the relevant day.

Regulation 3

This amends Schedule 11 of the Principal Regulations, which sets out the methodology for the delayed updated pension option, to ensure availability to persons affected by the sale of Qantas.

Regulation 4

This adds a new Schedule 13 to the Principal Regulations which:

*       removes the entitlement to immediate pensions which is consistent with the provisions of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) because it is only the ownership of Qantas that is changing (not the employment of the relevant persons) and which would otherwise prevent an election for preserved benefits under section 137, and

*       reverses certain amendments to the CSS provisions made by the Superannuation Legislation Amendment Act (No. 1) 1995 (the Amendment Act) which would otherwise restrict payment of a refund of accumulated contributions because of cashing restrictions imposed by the SIS Act.

Item 1 amends the Act by inserting a new subsection 55(2B) which removes access to an immediate pension for persons who have attained the age of 60 years prior to the sale.

Item 2 amends the Act by removing section 55A, as inserted by the Amendment Act, to ensure that the accrual of CSS benefits is not affected by those recent changes.

Item 3 restores the CSS early retirement provision, as it applied before the enactment of the Amendment Act, to only allow access to an immediate pension on actual retirement.

Item 4 amends the Act by removing section 111A, as inserted by the Amendment Act, to ensure that the payment of CSS benefits is not affected by those recent changes.