Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (COST OF ADMINISTRATION) REGULATIONS (AMENDMENT) 1991 NO. 162

STATUTORY RULES 1991 No. 162

ISSUED BY AUTHORITY OF THE MINISTER FOR FINANCE

SUPERANNUATION ACT 1976

SUPERANNUATION (COST OF ADMINISTRATION) REGULATIONS (AMENDMENT)

SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)

Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters which the Act requires or permits to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act makes provision for a contributory superannuation scheme for Commonwealth employees and certain other persons. Persons eligible to contribute under the Act are referred to in the Act as eligible employees.

In accordance with section 45 of the Act, each member of the scheme is required to pay fortnightly basic contributions and, in accordance with section 48 of the Act, a member may elect to pay fortnightly supplementary contributions. Under section 110H of the Act designated employers are required to pay contributions in relation to a member's productivity benefit to the Commissioner for Superannuation.

These member and employer contributions are required to be paid into the Commonwealth Superannuation Fund No. 2 (the Fund) under sections 53 and 110N of the Act respectively. The Fund, therefore, comprises accumulated contributions by scheme members, contributions by employers in relation to the productivity benefit and earnings thereon.

Pursuant to sections 41 and 42 of the Act the Superannuation Fund Investment Trust (the Trust) is responsible for the management of the Fund and the investment of the moneys of the Fund not required for the time being for the payment of benefits under the Act.

Section 160 of the Act provides that the costs of administration of the Act including the costs of and incidental to the management of the Fund by the Trust (other than costs which the regulations provide shall be paid out of the Fund) shall be paid out of moneys appropriated by the Parliament from time to time for this purpose. Regulations for the purposes of section 160 of the Act are contained in the Superannuation (Cost of Administration) Regulations.

Section 126A of the Act provides that regulations may modify the Act, or a provision of the Act specified in the regulations, in relation to a person who ceases to be an eligible employee and immediately becomes a member of another superannuation scheme. Regulations for the purposes of section 126A are contained in the Superannuation (Former Eligible Employees) Regulations.

The Act is to be amended on 1 July 1991 pursuant to section 64 of the Commonwealth Funds management Limited Act 1990. Under section 64 of the Commonwealth Funds Management Limited Act 1990, the references to "Trust" in sections 41, 42, 160 and other relevant sections of the Act will be omitted on that day and replaced with references to "Board".

The amendments to the Act will have the effect of passing responsibility for the management and investment of the Fund and the associated costs from the Trust to the joint employer/employee Commonwealth Superannuation Board of Trustees No. 2. This change is consistent with the Occupational Superannuation Standards Act 1987.

Principal Regulations

The Superannuation (Cost of Administration) Regulations provide that all of the costs of and incidental to the management of the Fund by the Trust shall be paid out of the Fund.

The Superannuation (Former Eligible Employees) Regulations (regulations 8 and 9), by virtue of schedule 5 of those regulations, modify the Act in respect of persons who cease to be eligible employees by becoming members of the Australia Post Superannuation Scheme (APSS) or the Telecom Superannuation Scheme (TSS) on or after 1 July 1990 and before 1 March 1991.

The modifications to the Act inserted by schedule 5 include provision for the transfer by the Trust of assets of the Fund, representing the accumulated contributions of transferees to the APSS and the TSS, to the administrators of those schemes. Reference is made to the role of the Trust in managing and investing the Fund.

Amendments

The Regulations amend the Superannuation (Cost of Administration) Regulations and the Superannuation (Former Eligible Employees) Regulations by omitting the references to "Trust" in those regulations and replacing them with references to "Board".

The regulations as amended reflect the transfer of responsibility from the Trust to the Board under the Act. In the case of the Superannuation (Cost of Administration) Regulations the amendment ensures, consistent with existing policy, that all of the costs of and incidental to the management of the Fund continue to be paid out of the Fund rather than from Consolidated Revenue.

The proposed Regulations commence on 1 July 1991, the date that the amendments to sections 41, 42, 160 and other relevant sections of the Act take effect.