EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO. 169
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.
The Australian National Railways Commission will be providing its statutory office-holders and employees with the productivity superannuation benefit through arrangements outside the Commonwealth superannuation scheme. It is therefore appropriate that those office-holders and employees be excluded from the Commonwealth scheme productivity superannuation arrangements.
The Declaration contained in the Statutory Rule, and cited as “Productivity Employee Exclusion Declaration No 2”, therefore specifies Australian National Railways Commission statutory office-holders and employees 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 was enacted to establish a superannuation scheme for Commonwealth employees and other specified individuals, aiming to provide financial security in retirement. This Act was later amended by the Superannuation Legislation Amendment Act 1990, which introduced a funded productivity superannuation benefit under a new Part VIA, effective from 1 July 1990. The 1990 Amendment Act included a provision allowing the Minister for Finance to issue a declaration excluding certain classes of employees from being classified as "productivity employees" under the Act. This authority is exercised through statutory rules, as stipulated in the Statutory Rules Publication Act 1903 and the Acts Interpretation Act 1901. The policy objective behind these amendments was to ensure that the productivity benefit is appropriately targeted and administered within the superannuation framework. The Productivity Employee Exclusion Declaration No 2, issued under section 110E, excludes statutory office-holders and employees of the Australian National Railways Commission from the productivity benefit provisions to align with their separate superannuation arrangements.
Scope and Application
The Superannuation Act 1976 establishes a superannuation scheme for Commonwealth employees and certain other individuals, aiming to provide a retirement benefit. This Act applies to persons who are members of the scheme, which includes Commonwealth employees and others who fall under its coverage. The Act extends its provisions to include a funded productivity superannuation benefit, introduced by the Superannuation Legislation Amendment Act 1990, which became effective from 1 July 1990. However, certain categories of employees are excluded from this benefit; for example, statutory office-holders and employees of the Australian National Railways Commission are specified as not being "productivity employees" under the Act. This exclusion is formalised through a declaration by the Minister for Finance, which is a Statutory Rule and a disallowable instrument. The declaration, effective from 1 July 1990, identifies these excluded groups and ensures they are not subject to the productivity superannuation arrangements within the Commonwealth scheme. The jurisdictional reach of this Act is national, given its application to Commonwealth employees, but it also extends to other specified entities and persons as defined within its provisions.
Key Provisions
The key provisions of the Superannuation Act 1976, as amended by the Superannuation Legislation Amendment Act 1990, establish a superannuation scheme for Commonwealth employees and other specified individuals, including a funded productivity superannuation benefit for certain members of the scheme. Section 110P of the Act stipulates that the productivity benefit is payable to a person who ceases to be a member of the scheme and was a "productivity employee" immediately before their cessation. The term "productivity employee" is defined in section 110A, with certain exclusions including employees of the Northern Territory or its authorities, and any other persons specified by the Minister for Finance in a declaration under section 110E.
The Minister for Finance, under section 110E, is empowered to declare certain classes of persons as not being productivity employees. This power is exercised in the Productivity Employee Exclusion Declaration No 2, which specifically excludes statutory office-holders and employees of the Australian National Railways Commission from the Commonwealth scheme's productivity superannuation arrangements. This declaration is a Statutory Rule under the Statutory Rules Publication Act 1903 and is also a disallowable instrument under section 46A of the Acts Interpretation Act 1901. It operates from 1 July 1990, in line with the commencement of the Amending Act.
The obligations imposed by the Act on the parties it governs include ensuring that productivity benefits are correctly calculated and paid to eligible members of the scheme, as defined under section 110A. Employers and scheme administrators are required to identify and exclude specified individuals, such as those employed by the Australian National Railways Commission, from the productivity benefit arrangements as per the declaration. Compliance with these provisions is essential to avoid any legal repercussions.
Failure to adhere to the provisions of the Act and the exclusion declaration could result in civil or criminal penalties. The exact nature of these penalties is not specified in the explanatory statement, but generally, breaches of superannuation legislation can lead to fines and, in severe cases, imprisonment. The maximum penalties would depend on the specific breach and the relevant sections of the Act and any associated regulations or subsidiary legislation. The Act also empowers the Minister for Finance to take necessary actions to ensure compliance with the declared exclusions, thereby protecting the integrity of the productivity benefit scheme.