EXPLANATORY STATEMENT
MILITARY SUPERANNUATION AND BENEFITS AMENDMENT TRUST
DEED 2005 (No.2)
ISSUED BY THE AUTHORITY OF THE MINISTER ASSISTING THE MINISTER
FOR DEFENCE
The Schedule to the Trust Deed made by the Minister for Defence under section 5 of the Military Superannuation and Benefits Act 1991 ('the MSB Act') contains Rules ('the MSB Rules') which deal with the benefits to be provided to members of the MSB Scheme upon retirement, or to dependants of deceased members of the scheme. The benefits payable are a member benefit based on member contributions and accrued MSB Fund earnings, and an employer benefit which includes employer contributions.
The Minister is empowered, by section 5 of the MSB Act, to amend the Trust Deed (including the MSB Rules), by an instrument which, by subsection 49(1) of the MSB Act, is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
The Superannuation Laws Amendment (Abolition of Surcharge) Act 2005 prevents the superannuation surcharge, payable in individual's surchargeable superannuation contributions and relevant termination payments, from applying on or after 1 July 2005. It achieves this by amending the:
- Superannuation Contributions Tax (Assessment and Collection) Act 1997
- Superannuation Contributions Tax (Members of Constitutionally Protected
Superannuation Funds) Assessment and Collection Act 1997, and
- Termination Payments Tax (Assessment and Collection) Act 1997.
The amendments made by the Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2) abolishes the surcharge deduction amount applied to the employerfinanced component of benefits accruing to a MSB Scheme member from 1 July 2005.
Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2) will commence on 1 July 2005. The amendment is beneficial and, in accordance with the provisions of subsection 48(2) of the Acts Interpretation Act 1901, no member of the MSB Scheme will be disadvantage upon implementation of the amendment.
Consultation has taken place between the Military Superannuation and Benefits Board, Commonwealth Superannuation Administration (the administrator of the MSB Scheme), the Office of Legislative Drafting and Defence Military Superannuation Officers.
Clause 1- Name of Trust Deed
This clause is formal. Clause 2 - Commencement
This clause provides for commencement on the day of registration.
Clause 3 - Amendment of Military Superannuation and Benefits Trust Deed
This clause is formal. Schedule 1- Amendments
This schedule amends the Military Superannuation and Benefits Trust Deed (incorporating the MSB Rules) made under the Military Superannuation and Benefits Act 1991 to provide for the abolition of the superannuation surcharge deduction amount that can be applied to a MSB Scheme member's debt account.
Item 1 - Rules, Schedule 12, paragraph 3 (c)
This item omits the term "year;" and inserts the term "year." to enable the omission of Rules, Schedule 12, paragraph 3 (d)
Item 2 - Rules, Schedule 12, paragraph 3 (d)
This item repeals the amount to be deducted from an MSB Scheme member's debt account from 1 July 2005.
Overview
The Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2), enacted by the Minister Assisting the Minister for Defence, addresses the issue of the superannuation surcharge applied to employer-financed benefits for members of the Military Superannuation and Benefits (MSB) Scheme. This Trust Deed amends the Military Superannuation and Benefits Trust Deed, which is governed by the Military Superannuation and Benefits Act 1991. The policy objective of this amendment is to align the MSB Scheme with the changes introduced by the Superannuation Laws Amendment (Abolition of Surcharge) Act 2005, which abolished the superannuation surcharge effective from 1 July 2005. By doing so, the amendment ensures that no member of the MSB Scheme is disadvantaged by this legislative change. The amendments were the result of consultation among the Military Superannuation and Benefits Board, the Commonwealth Superannuation Administration, the Office of Legislative Drafting, and Defence Military Superannuation Officers.
Scope and Application
The Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2) is an instrument made under the Military Superannuation and Benefits Act 1991, aimed at modifying the Military Superannuation and Benefits Trust Deed, specifically addressing the benefits and employer contributions payable to members of the Military Superannuation and Benefits (MSB) Scheme upon retirement or to the dependants of deceased members. This amendment targets the abolition of the superannuation surcharge deduction amount applied to the employer-financed component of benefits accruing to a MSB Scheme member, effective from 1 July 2005. The Trust Deed applies to members of the MSB Scheme, including both serving and retired military personnel, and is administered by the Commonwealth Superannuation Administration. The amendments extend to the geographic and jurisdictional reach of the Commonwealth of Australia, and the changes are implemented nationwide. This Trust Deed does not specify exclusions or exemptions, but it operates under the broader legislative framework of the MSB Act and related amendments in the Superannuation Laws Amendment (Abolition of Surcharge) Act 2005. The Trust Deed, which is a disallowable instrument, ensures that no member of the MSB Scheme will be disadvantaged by the implementation of these changes.
Key Provisions
The Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2) brings significant changes to the benefits structure for members of the Military Superannuation and Benefits (MSB) Scheme. The key operative sections of this Trust Deed are found in Schedule 1, particularly in relation to Rules under Schedule 12, paragraphs 3(c) and 3(d). These provisions mandate the abolition of the superannuation surcharge deduction amount applied to the employer-financed component of benefits accruing to a MSB Scheme member, effective from 1 July 2005. The changes are intended to ensure that no member of the MSB Scheme is disadvantaged upon the implementation of these amendments, as per subsection 48(2) of the Acts Interpretation Act 1901.
The Military Superannuation and Benefits Amendment Trust Deed 2005 (No. 2) imposes obligations on the Military Superannuation and Benefits Board and the Commonwealth Superannuation Administration, who are the administrators of the MSB Scheme. These parties must ensure that the changes are effectively implemented and communicated to all relevant stakeholders. This includes ensuring that no member of the MSB Scheme experiences any disadvantage as a result of the amendments. The Office of Legislative Drafting and Defence Military Superannuation Officers also play a role in the consultation process to ensure that the Trust Deed is compliant with existing laws and regulations.
In terms of consequences for breach, the Trust Deed does not explicitly outline specific penalties or consequences for non-compliance. However, as the Trust Deed is made under the authority of the Minister for Defence and is governed by the Military Superannuation and Benefits Act 1991, any breaches could potentially lead to legal action under the Act. The Act may provide for penalties or other consequences for non-compliance, although the exact nature of these consequences would depend on the specific circumstances of the breach and the provisions of the Act. It is important for all parties involved to adhere to the provisions of the Trust Deed to avoid any potential legal repercussions.