EXPLANATORY STATEMENT
Parliamentary Contributory Superannuation Act 1948
Parliamentary Superannuation Age Factors (Surcharge)Determination 2015 (No. 2)
Authority for the Determination
The Parliamentary Contributory Superannuation Scheme (PCSS) provides superannuation benefits for parliamentarians who entered Parliament before 9 October 2004. The PCSS is established by the Parliamentary Contributory Superannuation Act 1948 (PCS Act).
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 2) (the Determination) is made under subsection 22B(1) of the PCS Act. The Determination also revokes a previous Determination made under that subsection. This revocation is authorised by subsection 33(3) of the Acts Interpretation Act 1901 which provides, among other things, that where an Act confers power to make an instrument the power shall, unless the contrary intention appears, be construed as including a power, exercisable in like manner, to revoke the instrument. No such contrary intention appears in the PCS Act.
Purpose of the Determination
The superannuation contributions surcharge (surcharge) is an additional tax on certain contributions made to a superannuation fund after 20 August 1996 and before 1 July 2005. Where a surcharge assessment is received after retirement, the PCS Act gives retiring parliamentarians the option of converting part of their PCSS pension to a lump sum in order to pay their surcharge liability. The conversion is calculated using age factors determined by the Parliamentary Retiring Allowances Trust. The most current factors are contained in the Determination.
Legislative Instruments Act 2003
The Determination is a legislative instrument for the purposes of section 5 of the Legislative Instruments Act 2003 (LIA). However, as the Determination is an instrument relating to superannuation, it is exempted from disallowance by item 39 of the table in subsection 44(2) of the LIA.
Consultation
Consistent with paragraph 18(2)(a) of the LIA, consultation was considered unnecessary as the Regulation is of a minor or machinery nature and does not substantially alter existing arrangements. Actuarial advice was obtained regarding the factors included in the Determination. This advice was obtained from the Australian Government Actuary, consistent with the requirements of subsection 22B(1) of the PCS Act.
Statement of Compatibility with Human Rights
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the LIA. As mentioned above, the Determination is exempt from disallowance which means that a Statement of Compatibility with Human Rights is not required.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislative Instruments.
Overview
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 2) was enacted to address the need for updated age factors for the calculation of lump sum conversions in the context of superannuation contributions surcharges for parliamentarians who retired after entering Parliament before 9 October 2004. This Determination is made under subsection 22B(1) of the Parliamentary Contributory Superannuation Act 1948 (PCS Act) and revokes a previous Determination, consistent with the provisions of subsection 33(3) of the Acts Interpretation Act 1901. The objective is to ensure that the factors used for such calculations are current and accurate, facilitating the payment of surcharge liabilities by retiring parliamentarians. The Determination is considered of a minor or machinery nature, hence consultation was deemed unnecessary, and it has been exempted from disallowance under the Legislative Instruments Act 2003. The Determination comes into effect on the day after its registration on the Federal Register of Legislative Instruments.
Scope and Application
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 2) applies to the calculation of the superannuation contributions surcharge for parliamentarians who were part of the Parliamentary Contributory Superannuation Scheme and entered Parliament before 9 October 2004. This Determination, made under subsection 22B(1) of the Parliamentary Contributory Superannuation Act 1948, provides the age factors necessary for converting part of a PCSS pension to a lump sum in order to meet a surcharge liability for contributions made to a superannuation fund between 20 August 1996 and 1 July 2005. The Determination revokes the previous Determination made under the same subsection, with the revocation authorised by subsection 33(3) of the Acts Interpretation Act 1901. This instrument is a legislative instrument under the Legislative Instruments Act 2003, exempt from disallowance due to its superannuation-related nature. The Determination commenced on the day after its registration on the Federal Register of Legislative Instruments.
Key Provisions
The Parliamentary Superannuation Age Factors (Surcharge) Determination 2015 (No. 2) (sections 1 to 4) provides the age factors used to calculate the lump sum conversion of a retiring parliamentarian's pension for the purpose of paying their superannuation contributions surcharge liability. This Determination is made under subsection 22B(1) of the Parliamentary Contributory Superannuation Act 1948 (PCS Act) and revokes a previous Determination made under the same subsection (section 5). The surcharge is an additional tax on certain contributions made to a superannuation fund between 20 August 1996 and 1 July 2005. After retirement, if a surcharge assessment is received, retiring parliamentarians have the option to convert part of their pension under the Parliamentary Contributory Superannuation Scheme (PCSS) to a lump sum in order to pay their surcharge liability. The conversion is calculated using the age factors determined by the Parliamentary Retiring Allowances Trust, which are contained in this Determination.
The Determination imposes obligations on the Parliamentary Retiring Allowances Trust to calculate and publish the age factors used for the conversion of a retiring parliamentarian's pension. It also imposes an obligation on retiring parliamentarians to use these factors when calculating the lump sum conversion of their pension to pay their surcharge liability. Furthermore, the PCSS must adhere to these age factors when facilitating the conversion of a pension to a lump sum for this purpose. The Determination also requires the Australian Government Actuary to provide actuarial advice on the factors included in the Determination, in line with the requirements of subsection 22B(1) of the PCS Act.
There are no specific offences, penalties, or civil or criminal consequences outlined in the Determination for breach of its provisions. However, the Determination is a legislative instrument for the purposes of section 5 of the Legislative Instruments Act 2003 (LIA) and is exempt from disallowance by item 39 of the table in subsection 44(2) of the LIA. Non-compliance with the Determination may result in the PCSS, the Parliamentary Retiring Allowances Trust, or retiring parliamentarians facing administrative or financial consequences, such as incorrect calculations or payments, which may need to be rectified in accordance with the PCS Act and other relevant legislation.