EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO.168
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
DECLARATION UNDER SECTION 110E
The Superannuation Act 1976 (the Act) provides for a superannuation scheme for Commonwealth employees and certain other persons.
Section 64 of the Superannuation Legislation Amendment Act 1990 (the Amending Act) amended the Act 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 110P provides for the productivity benefit to become payable in respect of a person who ceases to be a member of the scheme and who immediately before so ceasing, or earlier, was a “productivity employee” for the purposes of the Act. The term “productivity employee” is defined in the new section 110A as, in effect, a member of the scheme but subject to certain exceptions. These include an employee of the Northern Territory or of an authority of the Northern Territory and a person included in a class of persons specified in a declaration by the Minister for Finance under the new section 110E as not being productivity employees.
In accordance with the new section 110G, a declaration under section 110E 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.
Certain Northern Territory employees and statutory office-holders are members of the superannuation scheme provided under the Act. The definition of “productivity employee” in section 110A excludes Northern Territory employees from the scope of the term because they are to be provided with the productivity superannuation benefit under separate arrangements established by the Northern Territory. For the same reason, it is appropriate for Northern Territory statutory office-holders to be excluded from the scope of the term.
The Declaration contained in the Statutory Rule, and cited as “Productivity Employee Exclusion Declaration No1”, therefore specifies Northern Territory statutory office-holders as a class of persons who are not to be “productivity employees”.
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 enables the power conferred on the Minister for Finance by the new section 110E 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, enacted by the Australian Parliament, establishes a superannuation scheme for Commonwealth employees and other specified individuals, aiming to provide retirement benefits. To enhance the scheme, the Superannuation Legislation Amendment Act 1990 introduced a funded productivity superannuation benefit for members of the scheme. This amendment included the insertion of a new Part VIA (sections 110A to 110S), effective from 1 July 1990. The new section 110P ensures that the productivity benefit is payable to former members who were previously "productivity employees," as defined in section 110A, excluding certain exceptions such as employees of the Northern Territory or authorities within it. The declaration under section 110E, issued by the Minister for Finance, specifies additional exclusions, such as Northern Territory statutory office-holders, ensuring they do not qualify as "productivity employees" because they are covered under separate Northern Territory arrangements. This declaration, known as the "Productivity Employee Exclusion Declaration No1," was made to align with the new legislative framework and took effect from the same date as the amendment, 1 July 1990.
Scope and Application
The Superannuation Act 1976 provides for a superannuation scheme applicable to Commonwealth employees and certain other persons, establishing a framework for retirement benefits within the public sector. This Act is amended by the Superannuation Legislation Amendment Act 1990 to include a funded productivity superannuation benefit for eligible members, defined as "productivity employees" under the new section 110A. This benefit is designed to be payable to individuals who cease to be members of the scheme under specific conditions, particularly if they were productivity employees immediately before their cessation. However, the Act excludes certain employees, including those of the Northern Territory and statutory office-holders within the Northern Territory, as they are provided for under separate arrangements. The Minister for Finance has the authority to declare additional classes of persons who are not to be considered productivity employees, as evidenced by the "Productivity Employee Exclusion Declaration No 1", which excludes Northern Territory statutory office-holders. This declaration, issued as a Statutory Rule, is effective from 1 July 1990, aligning with the commencement date of the amendments introduced by the Superannuation Legislation Amendment Act 1990.
Key Provisions
The Superannuation Act 1976, as amended by the Superannuation Legislation Amendment Act 1990, includes a new Part VIA (sections 110A to 110S) which, effective from 1 July 1990, introduces a funded productivity superannuation benefit for members of the scheme. Section 110P of the Act stipulates that this benefit is payable to individuals who cease to be members of the scheme and were previously considered “productivity employees.” The term “productivity employee” is defined in section 110A, encompassing members of the scheme but excluding certain categories, such as employees of the Northern Territory and persons specified in a Minister for Finance declaration under section 110E.
Section 110E of the Act empowers the Minister for Finance to make a declaration specifying classes of persons who are not to be considered productivity employees. This is achieved through Statutory Rule 1990 No. 168, issued under the authority of the Minister for Finance. The declaration, known as “Productivity Employee Exclusion Declaration No 1,” identifies Northern Territory statutory office-holders as a class of persons not to be considered productivity employees. This exclusion is necessary as Northern Territory employees are provided with productivity superannuation benefits under separate arrangements established by the Northern Territory government.
Entities governed by this Act, particularly employers and superannuation funds, are required to comply with the new provisions, ensuring that the productivity superannuation benefit is accurately calculated and administered for eligible employees. Employers must correctly identify and classify their employees in accordance with the definitions and exclusions provided in the Act. Superannuation funds must ensure that the benefit is funded and paid out in accordance with the new rules.
Breach of the provisions in the Superannuation Act 1976 can result in civil and criminal penalties. For example, failure to correctly administer the productivity superannuation benefit may result in fines and other civil penalties. The maximum penalties for such breaches are prescribed under relevant sections of the Act, and specific enforcement actions may be taken against entities that do not comply with the legislative requirements. The consequences of non-compliance may also include legal action by affected employees seeking redress for any financial losses incurred due to improper administration of the productivity superannuation benefit.