EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 295
Issued by the Authority of the Attorney-General
Judges’ Pensions Act 1968
Judges’ Pensions Amendment Regulations 2007 (No. 1)
Subsection 21(1) of the Judges’ Pensions Act 1968 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Judges’ Pensions Amendment Act 2007 amended the Act to provide judges with the option to commute a portion of their pensions to pay any outstanding superannuation surcharge debt they have when they retire.
In calculating the pension reduction percentage under of the Act where a judge elects for commutation, the judge’s surcharge debt is divided by the relevant age factor contained in the regulations. The Regulations set out these factors.
Details of the Regulations are set out in the Attachment.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations are taken to have commenced on 1 July 2007 (the same date as the relevant provisions in the Judges’ Pensions Amendment Act 2007).
The Office of Legislative Drafting and Publishing has confirmed that subsection 12 (2) of the Legislative Instruments Act 2003 does not prevent the Regulations from being taken to have commenced retrospectively as they neither affect any person’s rights as at the date of registration so as to disadvantage that person nor impose liabilities on any person in respect of anything done, or omitted to be done, before the date of registration.
Only the Australian Government Actuary has been consulted in relation to this legislative instrument. This limited consultation was appropriate as the instrument is in the nature of an adjunct to the Judges’ Pensions Amendment Act 2007, consultation for which included those affected by the introduction of the Act.
Neither a Business Cost Calculator Report nor a Regulation Impact Statement is required as the Regulations have no direct impact on business, individuals or the economy.
ATTACHMENT
Details of the proposed Judges’ Pensions Amendment Regulations 2007 (No. 1)
Regulation 1 - Name of Regulations
This regulation provides that the name of the Regulations is the Judges’ Pensions Regulations 2007 (No. 1).
Regulation 2 - Commencement
This regulation provides that the Regulations are taken to have commenced on 1 July 2007.
Regulation 3 - Amendment of Judges’ Pensions Regulations 1998
This regulation provides that Schedule 1 to the Regulations amends the Judges’ Pensions Regulations 1998 (the Principal Regulations).
Schedule 1 Amendments
Item 1 - After Part 1
Item 1 inserts new Part 1A into the Principal Regulations, which comprises new regulation 3A. This regulation provides a formula for calculating the age factor in relation to a particular judge.
Item 2 - Before Schedule 1
Item 2 inserts new Schedule 1A into the Principal Regulations specifying numerical age factors to be used in the formula in regulation 3A.
Overview
The Judges’ Pensions Amendment Regulations 2007 (No. 1) were introduced to implement changes made by the Judges’ Pensions Amendment Act 2007, which was enacted to address the problem of judges retiring with outstanding superannuation surcharge debts. This legislation provides judges with the option to commute a portion of their pensions to pay off these debts upon retirement. The regulations, issued by the authority of the Attorney-General, were made under the Judges’ Pensions Act 1968, which allows for the creation of regulations necessary to carry out the Act’s provisions. The policy objective behind these amendments was to provide a practical solution for judges facing financial liabilities related to superannuation surcharges at retirement. The regulations set out specific factors used in calculating the pension reduction percentage when a judge elects for commutation. These regulations were designed to commence on 1 July 2007, the same date as the relevant provisions in the amending Act, and have no retrospective disadvantage to any person nor impose liabilities for actions prior to their commencement.
Scope and Application
The Judges’ Pensions Amendment Regulations 2007 (No. 1) apply to judges who are party to the Judges’ Pensions Act 1968 and who are in receipt of pensions under the Act. The Regulations specifically address the provisions introduced by the Judges’ Pensions Amendment Act 2007, which allow judges to commute a portion of their pensions to address any outstanding superannuation surcharge debt upon retirement. The scope of these Regulations is limited to judicial officers within the Australian Commonwealth jurisdiction, as they pertain to pensions managed under federal law. The Regulations were designed to provide a framework for the commutation of pensions, as mandated by the Act, and are applicable nationwide, encompassing all states and territories within Australia. These Regulations do not extend to non-judicial personnel or to pensions governed under state or territory laws. The application of these Regulations is facilitated through subordinate instruments, specifically detailing the calculation of age factors used in determining the pension reduction percentage, which are outlined in Schedule 1A of the amended Judges’ Pensions Regulations 1998. The Regulations came into effect on 1 July 2007, the same date as the amended provisions in the Judges’ Pensions Amendment Act 2007.
Key Provisions
The Judges’ Pensions Amendment Regulations 2007 (No. 1) primarily introduce new provisions for calculating the pension reduction percentage when a judge elects to commute a portion of their pension to pay any outstanding superannuation surcharge debt upon retirement. Under section 21(1) of the Judges’ Pensions Act 1968, the Governor-General is empowered to make regulations necessary or convenient to carry out the Act, and these Regulations provide specific details for the commutation calculation process. Regulation 3A, inserted by the Regulations, establishes a formula for calculating the age factor used in the pension reduction percentage. Schedule 1A specifies the numerical age factors to be used in this formula.
The Regulations impose several obligations on the relevant parties, primarily focused on the calculation and application of the pension reduction percentage. Judges electing to commute a portion of their pension must ensure their superannuation surcharge debt is accurately assessed and factored into the calculation using the age factors provided in Schedule 1A. The Australian Government Actuary must also provide necessary data and calculations to support the age factors, ensuring they are based on sound actuarial principles.
Breach of the provisions in these Regulations could lead to civil or criminal consequences, though the explanatory statement does not specify particular offences. Given the nature of the Regulations, any failure to comply with the prescribed methods for calculating the pension reduction percentage could result in legal challenges or financial disputes. The maximum penalties for such breaches are not explicitly stated in the explanatory statement, but they would likely be determined by the relevant provisions of the Judges’ Pensions Act 1968 and any associated penalties for non-compliance. It is crucial for all parties involved to adhere strictly to the Regulations to avoid any potential legal ramifications.