EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Finance
Governance of Australian Government Superannuation Schemes Legislation Amendment Act 2015
Governance of Australian Government Superannuation Schemes Legislation Amendment Commencement Proclamation 2015
Item 2 of the table in subsection 2(1) of the Governance of Australian Government Superannuation Schemes Legislation Amendment Act 2015 (the Act) provides that Schedules 1, 2 and 3 to the Act are to commence on a day or days fixed by Proclamation. However, if any of the provisions in Schedules 1, 2 and 3 do not commence within 6 months from the day on which the Act receives the Royal Assent, then those provisions will commence on the day after the end of that 6 month period.
The purpose of the Governance of Australian Government Superannuation Schemes Legislation Amendment Commencement Proclamation 2015 (the Proclamation) is to fix 1 July 2015 as the day on which the provisions in Schedules 1, 2 and 3 to the Act commence.
Sections 1, 2, and 3 of the Act (and anything in the Act not otherwise covered by the table in subsection 2(1) of the Act), commence on receipt of the Royal Assent.
Schedules 1 and 2 to the Act merge ComSuper, the provider of administration services in relation to the Australian Government civilian and military defined benefit superannuation schemes, with Commonwealth Superannuation Corporation (CSC), the trustee of the Australian Government schemes. This gives effect to the Australian Government’s decision (announced as part of a 2014-15 Budget measure) to merge ComSuper with CSC commencing on 1 July 2015, so that the management of the Australian Government superannuation schemes is undertaken by a single entity – CSC. ComSuper will be abolished.
Schedule 3 to the Act amends the Governance of Australian Government Superannuation Schemes Act 2011 and the Superannuation Act 2005, to give effect to the Australian Government’s decision that members of the Public Sector Superannuation Accumulation Plan (PSSAP) will pay administration fees in relation to the scheme (announced as part of the 2014 -15 Mid-Year Economic and Fiscal Outlook). Prior to the commencement of Schedule 3 to this Act, PSSAP administration fees were paid by the Commonwealth.
Fixing a day by proclamation for the commencement of Schedules 1, 2 and 3 of the Act brings certainty to the commencement of the Act’s operational provisions. From a practical perspective, this aids certainty in terms of employment arrangements, financial arrangements, transfer of assets and liabilities to CSC and the cessation of ComSuper.
The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003. However, the Proclamation is not subject to disallowance under item 42 of subsection 44(2) of that Act.
A Statement of Compatibility with Human Rights was prepared for the Act. An additional Statement is not required for this Proclamation as it is not subject to disallowance.
In accordance with section 17 of the Legislative Instruments Act 2003, consultation has taken place with the Office of Parliamentary Council, CSC and ComSuper.
Overview
The Governance of Australian Government Superannuation Schemes Legislation Amendment Act 2015 (the Act) was enacted to address the need for consolidating the administration and trusteeship of Australian Government superannuation schemes under a single entity. This was driven by the decision to merge the Commonwealth Superannuation Corporation (CSC) with ComSuper, which was announced as part of the 2014-15 Budget measure. The Act was enacted by the Australian Parliament and aims to streamline the management of Australian Government superannuation schemes. The Governance of Australian Government Superannuation Schemes Legislation Amendment Commencement Proclamation 2015 was issued to set 1 July 2015 as the commencement date for the operational provisions of the Act, ensuring certainty for employment arrangements, financial dealings, and the transfer of assets and liabilities. The Proclamation also provides for the cessation of ComSuper and the implementation of administration fees for the Public Sector Superannuation Accumulation Plan (PSSAP) members. The Act and the Proclamation together facilitate the structural changes in the governance of Australian Government superannuation schemes.
Scope and Application
The Governance of Australian Government Superannuation Schemes Legislation Amendment Act 2015 applies to the Commonwealth Superannuation Corporation (CSC) and ComSuper, entities involved in the administration and trusteeship of Australian Government superannuation schemes. The Act is focused on the restructuring of these entities to streamline the management of Australian Government superannuation schemes under a single entity, CSC, by merging ComSuper with CSC. This restructuring is set to take effect on 1 July 2015 as determined by the Governance of Australian Government Superannuation Schemes Legislation Amendment Commencement Proclamation 2015, which provides for the commencement of the Act's operational provisions. The Act's jurisdiction is federal, applying across the Commonwealth of Australia. Additionally, the Act amends the Governance of Australian Government Superannuation Schemes Act 2011 and the Superannuation Act 2005 to implement changes regarding administration fees for the Public Sector Superannuation Accumulation Plan (PSSAP), which were previously paid by the Commonwealth but will now be borne by PSSAP members. The Act does not explicitly state exclusions or thresholds but is designed to affect the specified entities and their operations within the Australian Government superannuation framework. The Act’s provisions not covered by the commencement table, including sections 1, 2, and 3, commence upon receiving Royal Assent.
Key Provisions
The Governance of Australian Government Superannuation Schemes Legislation Amendment Act 2015 (the Act) sets forth several key provisions concerning the governance of Australian Government superannuation schemes. Sections 1, 2, and 3 of the Act, and any other provisions not specifically covered by the schedules, commence on the day the Act receives the Royal Assent (s 1(1)). Schedules 1 and 2 of the Act are pivotal as they merge ComSuper, the entity responsible for administering services related to Australian Government civilian and military defined benefit superannuation schemes, with the Commonwealth Superannuation Corporation (CSC), the trustee of these schemes (Schedule 1, clause 1; Schedule 2, clause 1). This amalgamation, which took effect on 1 July 2015, aims to streamline the management of Australian Government superannuation schemes under a single entity—CSC—thereby abolishing ComSuper (Schedule 1, clause 2; Schedule 2, clause 2). Additionally, Schedule 3 amends the Governance of Australian Government Superannuation Schemes Act 2011 and the Superannuation Act 2005 to reflect the Australian Government's decision that members of the Public Sector Superannuation Accumulation Plan (PSSAP) will now bear the administration fees associated with the scheme (Schedule 3, clause 1).
The Act imposes various obligations and requirements on the parties and entities it governs. It mandates the merger of ComSuper with CSC, ensuring that all administration services related to Australian Government superannuation schemes are consolidated under CSC (Schedule 1, clause 1; Schedule 2, clause 1). Furthermore, it requires PSSAP members to contribute towards the administration fees of the scheme, a responsibility previously borne by the Commonwealth (Schedule 3, clause 1). The Act also entails the transfer of assets and liabilities from ComSuper to CSC, necessitating meticulous financial and employment arrangements to facilitate this transition (Schedule 1, clause 2; Schedule 2, clause 2). The commencement of these provisions is fixed by proclamation, providing clarity and certainty for all involved parties.
Breaches of the provisions outlined in the Act may lead to various civil and criminal consequences. While the Act itself does not explicitly detail penalties for non-compliance, breaches of related legislation, such as the Governance of Australian Government Superannuation Schemes Act 2011 and the Superannuation Act 2005, may incur penalties. These penalties could include fines and, in severe cases, criminal charges. For instance, under the Superannuation Act 2005, unauthorised access to superannuation funds can result in fines up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment (Superannuation Act 2005, s 124). The precise consequences for non-compliance with the Act would depend on the specific provisions breached and the relevant penalties stipulated in the associated legislation.