EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO. 167
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
DECLARATION UNDER SECTION 110D
The Superannuation Act 1976 (the Act) provides for a superannuation scheme for Commonwealth employees.
Section 64 of the Superannuation Legislation Amendment Act 1990 (the Amending Act) amended the Act to by inserting a new Part VIA (comprising new sections 110A to 110S) in the Act to provide, with effect from 1 July 1990, a funded productivity superannuation benefit for members of the scheme.
The new section 110H requires the employer of a member of the scheme to pay fortnightly “productivity contributions” to the Commissioner for Superannuation in relation to the member. In accordance with section 110N, such contributions are to be paid by the Commissioner to the Superannuation Fund. They will then accumulate with interest for the member’s benefit.
The fortnightly rate of productivity contribution payable by an employer in relation to a member is set out in the Table in the new section 110C and varies according to the member’s salary.
The new section 110D provides that amounts of salary and contribution specified in the Table may be varied by a declaration by the Minister for Finance in relation to a period specified in the declaration. The intention is that the contribution rate be maintained at an average of 3% of salaries.
In accordance with the new section 110G, a declaration under section 110D is to be a Statutory Rule for the purposes of the Statutory Rules Publication Act 1903 and a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
The amounts of salary and contribution specified in the Table in section 110C are those that would have been applicable at the time the Amending Act was drafted (at 1 January 1990). The Declaration contained in the Statutory Rule, and cited as “Productivity Contribution Declaration No 1”, provides for increased amounts of salary and contribution to apply in relation to the period commencing on 1 July 1990. These amounts reflect changes since 1 January 1990.
The Amending Act received Royal Assent on 7 June 1990. In accordance with section 2 of that Act, section 64 is to come into operation on 1 July 1990. Section 4 of the Acts Interpretation Act 1901 enable the power conferred on the Minister for Finance by the new section 110D to be exercised after Royal Assent but before 1 July 1990.
The Declaration will operate on and from 1 July 1990.
Overview
The Superannuation Act 1976 was enacted to establish a superannuation scheme for Commonwealth employees, addressing the need for a structured retirement savings system for this group. The Superannuation Legislation Amendment Act 1990 introduced a funded productivity superannuation benefit to this scheme, effective from 1 July 1990. This amendment required employers to pay fortnightly productivity contributions to the Commissioner for Superannuation, which would then be credited to the Superannuation Fund for accumulation with interest for the members' benefit. The productivity contribution rate is set at an average of 3% of salaries and is subject to variation by a declaration from the Minister for Finance, as stipulated in section 110D of the Act. This allows for adjustments to the contribution rates to reflect changes in salaries over time, ensuring the scheme remains equitable and effective. The Declaration under section 110D, issued as a Statutory Rule, ensures the necessary adjustments to the contribution rates are implemented from 1 July 1990.
Scope and Application
The Superannuation Act 1976, as amended by the Superannuation Legislation Amendment Act 1990, pertains to the superannuation scheme for Commonwealth employees and introduces a funded productivity superannuation benefit for members of this scheme. Employers of scheme members are required to pay fortnightly productivity contributions to the Commissioner for Superannuation, who then transfers these contributions, with interest, to the Superannuation Fund for the member's benefit. The contribution rate is intended to maintain an average of 3% of salaries, with the specific rates outlined in the Act and subject to variation by the Minister for Finance through a Statutory Rule under section 110D. The productivity contributions are calculated based on the member's salary, with the rates initially set as per the drafting of the Amending Act and adjusted for subsequent periods through ministerial declarations. The Declaration under section 110D, referred to as "Productivity Contribution Declaration No 1", sets the updated amounts for salaries and contributions applicable from 1 July 1990, reflecting changes since the initial drafting date of 1 January 1990.
Key Provisions
The Superannuation Act 1976, as amended by the Superannuation Legislation Amendment Act 1990, introduces a new Part VIA, sections 110A to 110S, which establishes a funded productivity superannuation benefit for Commonwealth employees. Section 110H requires employers to make fortnightly productivity contributions to the Commissioner for Superannuation, which are subsequently paid to the Superannuation Fund, where they accrue interest for the employee’s benefit. The rate of these contributions is specified in section 110C and varies according to the employee's salary. Section 110D allows the Minister for Finance to adjust the salary and contribution amounts specified in the table through a declaration. The purpose of this provision is to ensure that the average contribution rate remains at 3% of salaries.
The obligations under this Act require employers to calculate and pay the correct fortnightly contributions in accordance with the rates specified in the table of section 110C. These contributions must be made to the Commissioner for Superannuation, who will then transfer them to the relevant Superannuation Fund. Employers must ensure that they accurately determine the applicable salary bands for their employees and apply the corresponding contribution rates. Additionally, the Minister for Finance has the authority to issue declarations under section 110D to adjust the salary and contribution thresholds to reflect changes since the initial drafting of the Act on 1 January 1990. Such declarations are intended to maintain the average contribution rate at 3% of salaries.
Failure to comply with the requirements of the Superannuation Act 1976 can lead to civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of superannuation laws generally can result in substantial fines and imprisonment. The penalties can be severe, reflecting the importance of compliance with superannuation obligations. Employers who fail to make the required contributions or who miscalculate the amounts owed could face legal action, including potential criminal charges if the breach is deemed to be deliberate or negligent. The Act ensures that employees receive their entitled superannuation benefits by imposing strict compliance requirements on employers and allowing for adjustments to keep the contribution rate stable.