Overview

The Defence Force (Superannuation) (Productivity Benefit) Amendment (Interest Factor) Determination 2014 was enacted to address the need for updating the interest calculation factors in the Defence Force (Superannuation) (Productivity Benefit) Determination 1988. This amendment was introduced by the Assistant Minister for Defence under the authority granted by section 52 of the Defence Act 1903. The primary objective of this Determination is to ensure that the notional interest on the productivity benefit, which is accrued by Defence Force Retirement and Death Benefits (DFRDB) scheme members and paid from the Consolidated Revenue Fund, is accurately calculated. The interest factor for the period from 1 January 2014 to 31 December 2014 has been set at 0.0423, which is the 10-year Treasury Bond yield declared by the Reserve Bank of Australia on 31 December 2013. This legislative instrument is compatible with human rights, as it does not engage any of the applicable rights or freedoms.

Scope and Application

The Defence Force (Superannuation) (Productivity Benefit) Amendment (Interest Factor) Determination 2014 amends the Defence Force (Superannuation) (Productivity Benefit) Determination 1988 to update the interest factor used in calculating the notional interest on the 3 per cent productivity benefit and superannuation guarantee top-up for Defence Force Retirement and Death Benefits (DFRDB) Scheme members. This amending instrument applies to all members of the Defence Force who are contributors to the DFRDB Scheme and who have accrued a notional superannuation productivity benefit during their continuous full-time service. The amendment is effective from 1 January 2014 and is made under the authority of Section 52 of the Defence Act 1903. This legislative instrument applies on a national level, with no stated exclusions or exemptions. It is a legislative instrument under the Legislative Instruments Act 2003 and does not require disallowance or sunsetting. The amendment reflects the 10-year Treasury Bond yield declared by the Reserve Bank of Australia on 31 December 2013, and it does not engage any of the applicable rights or freedoms as recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The main operative sections of this amending instrument, the Defence Force (Superannuation) (Productivity Benefit) Amendment (Interest Factor) Determination 2014, are found in Sections 1 to 4 and Schedule 1. Section 1 names the amending Determination, Section 2 specifies the commencement date of 1 January 2014 for Sections 1 to 4 and Schedule 1, Section 3 outlines the authority derived from Section 52 of the Defence Act 1903, and Schedule 1 provides the detailed amendments to the Principal Determination by incorporating a new interest factor applicable from 1 January 2014 to 31 December 2014. This new factor, 0.0423, represents the 10 year Treasury Bond yield as declared by the Reserve Bank of Australia on 31 December 2013. This Act imposes specific obligations on the parties it governs, primarily concerning the calculation and payment of notional interest on the productivity benefit accruing to Defence Force Retirement and Death Benefits (DFRDB) Scheme members. ComSuper, as the administrator, must ensure that the new interest factor is applied correctly in the calculation of these benefits. Defence Legal and the Group Finance Officer of the Chief Operating Officer Organisation in the Department of Defence must also ensure compliance with the amendment, overseeing the implementation and accuracy of the interest calculations within their respective roles. Additionally, the Office of Parliamentary Counsel has been consulted in the preparation of this amending instrument, ensuring legislative accuracy and adherence to legal standards. There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of this amending instrument. However, failure to comply with the requirements set forth in the Principal Determination, as amended by this instrument, could result in legal ramifications under the Defence Act 1903 or other applicable laws. The impact of non-compliance would depend on the specific nature of the breach, but it could potentially lead to disputes over benefit entitlements or financial discrepancies within the DFRDB Scheme. The maximum penalties for breaches of the Defence Act 1903 vary widely depending on the severity of the offence, but they can include fines, imprisonment, or both.