Overview

The Defence Force (Superannuation) (Productivity Benefit) Determination 2011 (No.1) was enacted to address a specific gap in the existing superannuation arrangements for members of the Australian Defence Force. This legislative instrument, issued by the Minister for Defence Science and Personnel, amends the Principal Determination made under Section 52 of the Defence Act 1903, which previously provided a 3% productivity benefit based on a factor set in 1988. The principal objective of this determination is to adjust the calculation of interest on the productivity benefit to reflect the 10-year Treasury Bond yield for the period from 1 January 2011 to 31 December 2011, sourced from the Reserve Bank of Australia. The amendments to the Principal Determination are formal and effective from 1 January 2011, with no adverse impact on individuals other than the Commonwealth. This legislative instrument is a legislative instrument under the Legislative Instruments Act 2003 and does not require disallowance or sunsetting provisions.

Scope and Application

The Defence Force (Superannuation) (Productivity Benefit) Determination 2011 (No.1) applies to members of the Defence Force who are contributors to the Defence Force Retirement and Death Benefits (DFRDB) Scheme, specifically addressing the calculation of a 3% productivity benefit in line with the Conciliation and Arbitration Commission's June 1986 National Wage decision. This Act amends the Principal Determination to include the factor used in the calculation of interest applicable for the period from 1 January 2011 to 31 December 2011, which is based on the 10-year Treasury Bond yield declared by the Reserve Bank of Australia on 31 December 2010. The amendments to the Principal Determination are formal and effective from 1 January 2011, with no adverse impact on any person other than the Commonwealth. This legislative instrument is governed by the Legislative Instruments Act 2003 and is not subject to disallowance or sunsetting. Consultation was deemed unnecessary for this Determination, as it pertains directly to the service of Australian Defence Force members.

Key Provisions

The main operative sections of the Defence Force (Superannuation) (Productivity Benefit) Determination 2011 (No.1) (the Determination) include the amendment clause (clause 1), which formalises the changes to the Principal Determination, and the commencement clause (clause 2), which specifies that the amendments take effect from 1 January 2011. The schedule (clause 3) details the factor used in calculating interest for the period from 1 January 2011 to 31 December 2011, which is the 10 year Treasury Bond yield as declared by the Reserve Bank of Australia on 31 December 2010. The Determination imposes specific obligations on the parties involved, primarily ensuring that the productivity benefit is correctly calculated and applied to eligible members of the Defence Force who contribute to the Defence Force Retirement and Death Benefits (DFRDB) Scheme. It formalises the amendment to the Principal Determination to reflect the appropriate interest calculation factor for the specified period. By making these adjustments, the Determination ensures that the superannuation benefits for Defence Force members are aligned with economic indicators, maintaining the integrity of the benefit system. In terms of penalties and consequences for breach, the Determination does not explicitly outline specific offences or penalties within its text. However, as a legislative instrument under the Legislative Instruments Act 2003 (LIA), any non-compliance with the Determination could potentially lead to administrative or legal consequences depending on the broader legislative framework and applicable regulations. The Determination specifies that it is not subject to disallowance or sunsetting under the LIA, which implies a certain level of legal robustness and permanence in its application. The legislative instrument is deemed necessary due to the nature of its application to Defence Force members' superannuation benefits, and consultation was deemed unnecessary as per the LIA. This decision underscores the Determination's direct impact on the service members and the need for prompt and precise adjustments to maintain the benefits' accuracy and relevance.