Commonwealth Numbered Regulations - Explanatory Statements Commonwealth Numbered Regulations - Explanatory Statements[Index] [Search] [Download] [Related Items] [Help]
SUPERANNUATION (FORMER HLIC EMPLOYEES) REGULATIONS 1991 NO. 22
EXPLANATORY STATEMENTSTATUTORY RULES 1991 No. 22
ISSUED BY AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
SUPERANNUATION (FORMER HLIC EMPLOYEES) REGULATIONS
The Superannuation Act 1976 (the Act) provides for an occupational superannuation scheme for Commonwealth employees. Persons eligible to contribute under the Act are referred to in the Act as eligible employees.
Section 155B of the Act enables the Act to be modified by Regulations in relation to a person:
(a) who ceases to be an eligible employee because his or her position ceases to exist because of the sale or transfer of his or her employer's organisation or function; and
(b) who has been offered equivalent employment by the purchaser or transferee.
The Housing Loans Insurance Corporation (HLIC) was established by the Housing Loans Insurance Act 1965. Under the provisions of the Housing Loans Insurance Corporation (Sale of Assets and Abolition) Act 1990, the sale of HLIC will be completed shortly.
Former employees of the HLIC will fall into one of three categories.
Category 1 - Employees of HLIC who accept an offer of equivalent employment with the purchaser
A former HLIC employee in this category who has contributed to the scheme for one year has the following options:
(a) taking his or her accumulated basic contributions as a lump sum and preserving 2.5 times that amount in a preservation fund of his or her choice; or
(b) leaving his or her accumulated contributions in the scheme and electing for a deferred benefit; or
(c) if he or she is age 31 or over; taking an indexed pension and a refund of his or her accumulated contributions; or
(d) if he or she is age 55 or over; defer the payment of benefits that are payable under option (c) above.
The Regulations modify the Act to provide for the options detailed above.
Category 2 - Employees of HLIC who refuse an offer of equivalent employment with the purchaser
A former HLIC employee in this category is considered to have resigned and therefore receives resignation benefits under the Act. The Regulations modify the Act to provide for this situation.
Category 3 - Employees of HLIC who are not offered equivalent employment with the purchaser
A former HLIC employee in this category is entitled to the usual retrenchment options currently available (no amendments to the Act are required).
Details of the Regulations are set out in the Attachment.
The Regulations operate from the date of their gazettal.
ATTACHMENT
Superannuation (Former HLIC Employees) Regulations
Regulation 1 provides for the citation of the Regulations.
Regulation 2 provides for the definition of a term used in the Regulations.
Regulation 3 provides that the Regulations apply to persons who were employees of HLIC immediately before the sale and who have been offered equivalent employment with the purchaser.
Schedule - Item 1
This item provides for the inclusion of several new definitions in subsection 3(1) of the Act. These are definitions of terms used in the Schedule to the Superannuation (Former HLIC Employees) Regulations.
Schedule - Item 2
This item provides for the inclusion of a new subsection 58(5) in the Act. This subsection means that a HLIC employee who declines an offer of equivalent employment with HLIC following the sale is not able to receive retrenchment benefits under the Act. In these circumstances, the employee is treated as if he or she had resigned.
Schedule - Items 3 and 4
These items make technical modifications to subsection 62(1) of the Act. These modifications are necessary to enable the correct operation of the new subsections 62(1A) and 62(3).
Schedule - Item 5
This item provides for the inclusion of a new subsection 62(1A) in the Act. This subsection requires a HLIC employee who accepts an offer of equivalent employment with the purchaser following the sale to nominate a preservation fund to which his or her entitlements under option (a) are to be paid.
Schedule - Item 6
This item provides for the inclusion of a new subsection 62(3) in the Act. This subsection means that a HLIC employee who accepts an offer of equivalent employment with HLIC following the sale is not able to receive the entire retrenchment benefit as a cash lump sum.
Instead, the component of the retrenchment benefit that consists of the employee's contributions and interest is paid as a cash lump sum, and the component of the benefit that is contributed by the employer is compulsorily preserved until retirement from the workforce on or after age 55 (or earlier invalidity retirement or death).
Schedule - Item 7
Before this item came into effect, the Act required a person who had attained his or her minimum retiring age to take an immediate benefit even though he or she continued in equivalent employment following the sale of an asset or the transfer of a function.
This item provides for the inclusion of a new Division 3A in Part V of the Act. This Division allows a HLIC employee who accepts an offer of equivalent employment with HLIC following the sale, and who has attained his or her minimum retiring age, an additional option to defer the payment of his or her superannuation entitlement. The entitlement consists of a lump sum component and a pension component and can be claimed on any date up to attaining age 65.
While deferred, the lump sum component accrues interest at the earning rate of the superannuation fund. On the date the benefit becomes payable, the pension component is calculated using the person's age on that date and the salary that would have been payable on that date had the person remained in the position held by him or her immediately prior to the sale of the HLIC.
Schedule - Item 8
Provision has been made for the payment of a benefit to the spouse and/or children of a former HLIC employee who has deferred his or her superannuation entitlements under Division 3A of Part V.
This item provides for the inclusion of a new section 110AA in the Act. This section provides that in the circumstances described above, a person is taken to have claimed their deferred entitlements on the day before he or she died. The benefits payable to the spouse and/or children are then determined under the existing provisions of the Act that specify the benefits payable following the death of a pensioner.
Schedule - Item 9
Before this item came into effect, the Act would have allowed HLIC employees with 5 years of eligible employment who had accepted an offer of equivalent employment to elect for a deferred benefit.
A deferred benefit allows a person to leave his or her contributions in the scheme and take a benefit based on that amount updated with interest on or after age 55 (or earlier invalidity retirement or death). Eligible employment is generally the period a person has been an eligible employee, but can be longer in certain circumstances.
This item provides that paragraph 139(1)(b) of the Act be modified. This modification allows a HLIC employee who accepts an offer of equivalent employment with the purchaser following the sale to elect for a deferred benefit after only 1 year of eligible employment instead of the usual 5 years.
HLIC employees who have accepted an offer of equivalent employment and who have attained their minimum retiring age at the date of sale have the option of taking a deferred benefit under this item or under Division 3A of Part V.