EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Determination 2007/02 to establish a Special Account

Purposes of Determination 2007/02

The attached instrument makes a determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account entitled the Commonwealth Superannuation Administration Special Account.  It also specifies the nature of amounts that may be credited to, and the purposes for which amounts may be debited from, the Commonwealth Superannuation Administration Special Account.

Special Accounts generally

In accordance with the Constitution, all revenues or moneys raised or received by the Government of the Commonwealth form one Consolidated Revenue Fund (CRF) and may not be spent unless under an appropriation by the Parliament for the purposes of the Commonwealth.  A Special Account is established by a determination that sets out the amounts that may be credited and the purposes for which it may be debited.                   Special Accounts established by determination are supported by an appropriation under section 20 of the FMA Act.  In effect, Special Accounts allow amounts from the CRF to be spent on a purpose specified in the determination.

Determinations that establish Special Accounts, or vary determinations that establish Special Accounts, are subject to section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the establishing or varying determination in each House of Parliament. Either House may disallow a determination within five sitting days of tabling.  If the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed.

Regulation 10 of the Legislative Instruments Regulations 2004 preserves the disallowance provisions under section 22 of the FMA Act by exempting Special Account determinations from subsections 57(2) and 57(5) of the Legislative Instruments Act 2003.

Special Accounts can be abolished by a determination of the Finance Minister.  However, there is no requirement to table such a determination.

Operation of Determination 2007/02

Purpose of the Commonwealth Superannuation Special Account

This determination is required in order to establish a Special Account which explicitly refers to the Australian Reward Investment Alliance (ARIA).  The previous determination (2005/41) was a variation on an original determination and referred to the Commonwealth Superannuation Scheme (CSS) Board and the Public Sector Superannuation Scheme (PSS) Board.  As these bodies no longer exist, it is administratively prudent to abolish the current determination and replace it with a new determination which refers to ARIA.  The purpose and scope of the Special Account will remain unchanged.  Additionally, the old Special Account was named the ComSuper Special Account.  This new Special Account is named the Commonwealth Superannuation Administration Special Account to distinguish it from the old Special Account. 

Reasons for establishing a new Special Account

The Commonwealth Superannuation Administration Special Account is required in order to give effect to changes that are required to the existing ComSuper Account (‘the old Account’), but which are not practical to make by variation to the old account, given that the old Account is already a variation. 

The current purposes of the old account, in relation to which amounts may be debited, are:

(a)          providing administration, accounting and other support services to, or on behalf of:

(i)           the CSS Board; and

(ii)        the PSS Board; and

(iii)      the Military Superannuation and Benefits Board of Trustees No 1; and

(b)         the administration of any functions conferred on the Commissioner for Superannuation under any legislation, including: 

(i)                       the Superannuation Act 1922; and

(ii)                     the Defence Force Retirement and Death Benefits Act 1973; and

(iii)                   the Defence Forces Retirement Benefits Act 1948; and

(iv)                   the Papua New Guinea (Staffing Assistance) Act 1973; and

(v)                     the Superannuation Act 1976; and

(c)           crediting the CSS Special Account with the CSS Board’s share of revenue levied by Comsuper on employers participating in the CSS, as agreed between the Commissioner for Superannuation and the CSS Board; and

(d)          crediting the PSS Special Account with the PSS Board’s share of revenue levied by Comsuper on employers participating in the PSS or the PSSAP, as agreed between the Commissioner for Superannuation and the PSS Board; and

(e)           activities that are incidental to a purpose mentioned in paragraphs (a), (b), (c) or (d); and

(f)            to reduce the balance of the ComSuper Special Account (and, therefore, the available appropriation for the ComSuper Special Account) without making a real or notional payment; and

(g)          to repay amounts where an Act or other law requires or permits the repayment of an amount received.

Changes required

The new Special Account will remove references to the CSS Board and the PSS Board, as these bodies no longer exist.  Instead, they will be replaced with references to the Australian Reward Investment Alliance, which is the organisation providing superannuation services and products to Australian Government employees and employers through the CSS, PSS, and PSSAP. 

Limitations in the structure of the existing Determination

It is not practical to vary the existing Determination signed by the Minister for Finance and Administration on 14 June 2002, as this determination is not in a form consistent with current Special Account determinations.  Additionally, this determination was varied in 2005 and it is timely, with the abolition and re‑establishment of the CSS and PSS Special Accounts into the ARIA Special Account, that these changes also be incorporated into a new determination to continue ComSuper’s activities.  These changes will ensure that the new determination is as clear and informative as possible.

Consultation

ComSuper is the agency affected by this instrument, and was provided with drafts of the instrument and agrees with its form.  As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).

Estimates of transactions on the Commonwealth Superannuation Administration Special Account

1. Includes balance debited from the old account and credited to the new Commonwealth Superannuation Administration Special Account.