South Australian Numbered Acts

STATUTES AMENDMENT (TRANSITION TO RETIREMENT--STATE SUPERANNUATION) ACT 2008 (NO 4 OF 2008) - SECT 7

7—Insertion of sections 30A and 30B

After section 30 insert:

30A—Transition to retirement

        (1)         For the purposes of this section, the "basic threshold" is an amount prescribed by the regulations for the purposes of this subsection.

        (2)         A member may apply to the Board for the benefit of this section if—

            (a)         the member has reached—

                  (i)         the age of 55 years; and

                  (ii)         his or her preservation age; and

            (b)         the member has entered into an arrangement with his or her employer—

                  (i)         to reduce his or her hours of work; or

                  (ii)         to alter his or her duties,

or both, with the effect that there is a reduction in the member's salary; and

            (c)         the purpose for establishing the arrangement referred to in paragraph (b) relates to the proposed retirement of the member in due course (including by allowing the member to scale down his or her work in the lead-up to retirement); and

            (d)         the member has not applied for the benefit of section 30B.

        (3)         The Board may require that an application under subsection (2)—

            (a)         be made in such manner, and comply with such requirements, as the Board thinks fit; and

            (b)         be accompanied by such information or other material specified by the Board to assist the Board to be satisfied as to the matters set out in paragraphs (b) and (c) of that subsection.

        (4)         If the Board is satisfied that a valid application has been made under subsection (2), an entitlement will arise as follows:

            (a)         the Board will determine a benefit (a "draw down benefit") on the basis of the member's application and on the basis that the maximum draw down benefit to which the member is entitled will be determined as follows:

Where—

"B" is the maximum draw down benefit

"SP" is the amount that would be payable under section 31 if the member had retired from employment immediately before the date of the determination

"FS" is the member's actual salary immediately before the commencement of the arrangement envisaged by subsection (2)(b)

"NS" is the member's actual salary on the commencement of the arrangement envisaged by subsection (2)(b);

            (b)         the Board will then, according to an election made by the member as part of his or her application to the Board for the benefit of this section, invest (on behalf of and in the name of the member) the draw down benefit—

                  (i)         with the Superannuation Funds Management Corporation of South Australia; or

                  (ii)         with another entity that will provide a non-commutable income stream for the member while the member continues to be employed in the workforce,

so that the member receives (and only receives) a payment in the form of a pension or an annuity (a "draw down payment") on account of the benefit.

        (5)         Paragraph (a) of subsection (4) operates subject to the qualification that if SP under that paragraph does not exceed the basic threshold then the maximum draw down benefit will be equal to SP.

        (6)         The draw down benefit will be constituted by the components that would apply under section 31 if the member had retired from employment immediately before the date of the Board's determination, with each component bearing the same proportion to the component that would apply under section 31 as the draw down benefit bears to SP under subsection (4)(a).

        (7)         The investment of a draw down benefit under subsection (4)(b)(i) will be on terms and conditions determined by the Board.

        (8)         An entitlement to a draw down payment is not commutable.

        (9)         However—

            (a)         a member may, after commencing to receive a draw down payment and before retiring from employment under this Act, take steps to bring the investment to an end and pay the balance of the investment into a rollover account under this Act as if the balance were being carried over from another superannuation scheme to the Triple S scheme; and

            (b)         the value of an investment under subsection (4)(b)(i) may be redeemed in due course under subsection (14).

        (10)         When the Board has determined a draw down benefit—

            (a)         the various accounts maintained by the Board under section 7 will be immediately adjusted to take into account the payment of the draw down benefit; and

            (b)         section 12(2) and (3) will apply with respect to the relevant components constituting the draw down benefit, as applying under subsection (6) of this section; and

            (c)         the contributions payable by the member under section 25 will (despite any provision made by section 25 to the contrary)—

                  (i)         be fixed on the basis of the member's salary under the arrangement established with his or her employer (for so long as the arrangement continues); and

                  (ii)         as so fixed, be payable in respect of this salary from the first full pay period after the Board's determination of the draw down benefit; and

            (d)         the relevant employer contribution account will be immediately adjusted to take into account the payment of the draw down benefit.

        (11)         If the employment arrangements of a member who is receiving a draw down payment under this section alter so that there is an alteration in his or her salary—

            (a)         in the case of a reduction in salary—the member may apply to the Board for a further benefit in accordance with the provisions of this section and this section will then apply to the application and with respect to the relevant arrangement—

                  (i)         as if FS under subsection (4)(a) is the member's actual salary immediately before the relevant reduction in salary; and

                  (ii)         as if NS is the member's actual salary immediately after the relevant reduction in salary; and

                  (iii)         by applying such other modifications as may be necessary for the purpose or as may be prescribed; and

            (b)         in the case of an increase in salary—the draw down payment will continue as if the increase had not occurred but the contributions payable by the member must be adjusted to take into account the increase.

        (12)         When a member retires from employment (and is thus entitled to a benefit under section 31), the member's entitlement under section 31 will be adjusted to take into account the draw down benefit provided under this section (and that section will then have effect accordingly).

        (13)         If a member's employment is terminated on account of invalidity or by the member's death, any entitlement under section 34 or 35 (as the case requires) will be adjusted to take into account the draw down benefit provided under this section (and the relevant section will then have effect accordingly).

        (14)         When a member retires, has his or her employment terminated on account of invalidity or dies (whichever first occurs), an investment being held under subsection (4)(b)(i) may be redeemed (subject to any rules or requirements applicable to the exercise of a power of redemption).

        (15)         Despite a preceding subsection, if the maximum draw down benefit under subsection (4)(a) is not sufficient to be invested under subsection (4)(b) in order to obtain a draw down payment—

            (a)         unless paragraph (b) applies—the draw down benefit must be an amount equal to the minimum amount required to obtain a draw down payment (and subsection (4)(a) will apply accordingly);

            (b)         if the minimum amount required to obtain a draw down payment is greater than SP under subsection (4)(a), the Board must reject the application under this section (and no entitlement will arise under subsection (4)).

        (16)         The determination of a benefit under this section must take into account the operation of any provision under Part 5A.

        (17)         The Governor may, by regulation, declare that any provision of this section is modified in prescribed circumstances (and the regulation will have effect according to its terms).

30B—Early access to superannuation benefits

        (1)         For the purposes of this section, the "basic threshold" is an amount prescribed by the regulations for the purposes of this subsection.

        (2)         Subject to this section, a member may apply to the Board for the benefit of this section if—

            (a)         the member has reached—

                  (i)         the age of 55 years; and

                  (ii)         his or her preservation age; and

            (b)         in the case of the first application by the member under this section—the combined balance of his or her eligible contribution accounts equal or exceed the basic threshold; and

            (c)         the member has not applied for the benefit of section 30A.

        (3)         An application under this section may be made for the payment of the whole, or a specified proportion, of the balance of the member's eligible contribution accounts but, in the case of the first application by a member under this section, the application must seek the payment of an amount that is at least equal to the basic threshold.

        (4)         Once a member has made an application under this section, a second or subsequent application cannot be made—

            (a)         unless at least 12 months have elapsed from any preceding application; and

            (b)         unless the combined balance of his or her eligible contribution accounts equal or exceed an amount prescribed by the regulations for the purposes of this subsection.

        (5)         The Board may require that an application under this section be made in such manner, and comply with such requirements, as the Board thinks fit.

        (6)         A payment pursuant to an application under this section will be drawn from the member's contribution account first and then, to the extent (if any) that an additional amount is required for the purposes of the payment, from the member's other eligible contribution account or accounts in accordance with the regulations.

        (7)         The payment will, according to an election made by the member as part of his or her application, be invested by the Board (on behalf of and in the name of the member)—

            (a)         with the Superannuation Funds Management Corporation of South Australia; or

            (b)         with another entity that will provide a non-commutable income stream for the member while the member continues to be employed in the workforce,

so that the member receives (and only receives) a payment in the form of a pension or annuity (a "drawn down payment").

        (8)         An investment under subsection (7) will be on terms and conditions determined by the Board.

        (9)         An entitlement to a draw down payment is not commutable.

        (10)         However, the value of an investment may be redeemed in due course under subsection (14).

        (11)         When the Board makes a payment on an application under this section—

            (a)         the member's contribution account and, if relevant, any other eligible contribution account, will be immediately adjusted to take into account the payment; and

            (b)         section 12(2) and (3) will apply with respect to the relevant components constituting the payment.

        (12)         When a member retires from employment (and is thus entitled to a benefit under section 31), the member's entitlement under section 31 will be adjusted to take into account an entitlement provided under this section (and that section will then have effect accordingly).

        (13)         If a member's employment is terminated on account of invalidity or by the member's death, any entitlement under section 34 or 35 (as the case requires) will be adjusted to take into account an entitlement provided under this section (and the relevant section will then have effect accordingly).

        (14)         When a member retires, has his or her employment terminated on account of invalidity or dies (whichever first occurs), an investment being held under subsection (7) may be redeemed (subject to any rules or requirements applicable to the exercise of a power of redemption).

        (15)         The making of a payment under this section must take into account the operation of any provision under Part 5A.

        (16)         The Governor may, by regulation, declare that any provision of this section is modified in prescribed circumstances (and the regulation will have effect according to its terms).

        (17)         In this section—

"eligible contribution accounts" of a member means—

            (a)         the member's contribution account; and

            (b)         the member's employer contribution account; and

            (c)         if the regulations so provide—

                  (i)         the member's rollover account;

                  (ii)         the member's co-contribution account.