EXPLANATORY STATEMENT
ISSUED BY AUTHORITY OF THE MINISTER FOR FINANCE AND ADMINISTRATION
SUBJECT: SEVENTEENTH AMENDING DEED TO THE DEED TO ESTABLISH AN OCCUPATIONAL SUPERANNUATION SCHEME FOR COMMONWEALTH EMPLOYEES AND CERTAIN OTHER PERSONS PURSUANT TO SECTION 5 OF THE SUPERANNUATION ACT 1990
Authority
The Minister for Finance, for and on behalf of the Commonwealth, established an occupational superannuation scheme to provide benefits for certain of the Commonwealth’s employees and for certain other people by Deed dated 21 June 1990 under section 4 of the Superannuation Act 1990. In this statement the Deed is called “the Trust Deed”. The occupational superannuation scheme is known as the Public Sector Superannuation Scheme (PSS).
2. Section 5 of the Superannuation Act 1990 (1990 Act) provides that the Minister for Finance and Administration may amend the Trust Deed by signed instrument, subject to obtaining the PSS Board’s consent to the amendment where necessary.
3. The Minister has amended the Trust Deed and the Rules for the Administration of the Superannuation Scheme set out in the Schedule to the Trust Deed by the following signed instruments:
Trust Deed | Date |
| Trust Deed | Date |
First Amending Deed | 21 June 1990 |
| Eleventh Amending Deed | 10 Dec 1996 |
Second Amending Deed | 1 July 1991 |
| Twelfth Amending Deed | 25 Mar 1998 |
Third Amending Deed | 30 June 1992 |
| Thirteenth Amending Deed | 5 Dec 1999 |
Fourth Amending Deed | 21 Dec 1992 |
| Fourteenth Amending Deed | 20 Aug 2001 |
Fifth Amending Deed | 16 June 1993 |
| Fifteenth Amending Deed | 25 Sep 2001 |
Sixth Amending Deed | 24 Jan 1994 |
| Sixteenth Amending Deed | 26 Jun 2002 |
Seventh Amending Deed | 7 May 1994 |
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Eighth Amending Deed | 28 June 1994 |
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Ninth Amending Deed | 22 June 1995 |
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Tenth Amending Deed | 29 Jan 1996 |
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4. On 3 April 2003 the Minister for Finance and Administration amended the Rules for the Administration of the PSS set out in the Schedule to the Trust Deed by signed instrument. That instrument is called the Seventeenth Amending Deed in this statement.
5. Section 5 of the 1990 Act deals with amendments made to the Trust Deed. This section allows the Minister to amend the Trust Deed provided that the PSS Board has consented to the amendment. However, paragraph 5(1A)(b) prescribes a number of exemptions where the PSS Board’s consent is not required to an amendment to the Trust Deed.
6. Sub-paragraph 5(1A)(b)(i) exempts an amendment that relates to a payment by an employer-sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993 (the SIS Act)) that will, after the making of the amendment, be required or permitted to be made under the 1990 Act. Subsection 5(1B) provides that for the purposes of that sub-paragraph a payment under the Trust Deed or the Rules is taken to be a payment by an employer-sponsor.
7. Some of the amendments included in the Seventeenth Amending Deed ensure that the calculation of certain employer payments under the PSS Rules are consistent with the change from annual to quarterly superannuation guarantee arrangements. As employer benefits are payable under the PSS Rules and are paid by the Commonwealth, these amendments relate to a payment by an employer-sponsor because of subsection 5(1B). These amendments therefore did not require the consent of the PSS Board.
8. The other amendments included in the Seventeenth Amending Deed, relating to voluntary member contributions for those PSS members who have reached age 70, have received the consent of the PSS Board.
Date of Effect of the Seventeenth Amending Deed
9. Clause 1 specifies that, subject to subclause 1.1, the amendments of the Rules made by the Seventeenth Amending Deed come into effect on the date of gazettal. The amendments that come into effect on gazettal relate to voluntary member contributions for those PSS members who have reached age 70.
10. Subclause 1.1 specifies that subclauses 2.1, 2.2, 2.3, 2.4 and 2.5 of the Seventeenth Amending Deed come into effect on 1 July 2003. These amendments relate to the Government’s decision to move from annual to quarterly superannuation guarantee arrangements.
Amendments to the Rules
Background
11. The Seventeenth Amending Deed made consequential reference changes to the PSS Rules as a result of the change in the payment of Superannuation Guarantee contributions from an annual basis to a quarterly basis from 1 July 2003.
12. Regulations under the Superannuation Industry (Supervision) Act 1993 (SIS Act) were amended in 2002 to allow working people aged over 70 but less than 75 to make personal contributions to superannuation from 1 July 2002. No change was made to the limitations under that Act on employer contributions after age 70. SIS provides that employer contributions for persons over age 70 are limited to mandated contributions under an industrial award.. The PSS Rules do not accept such contributions.
13. As employer benefits in the PSS are linked to member contributions, it was necessary to prevent PSS members from paying member contributions after reaching age 70 to avoid an accrual of employer benefit. This change was made by the Sixteenth Amending Deed, which amended the PSS Rules from 1 July 2002.
14. The Seventeenth Amending Deed amended the PSS Rules to allow voluntary member contributions for those PSS members who have reached age 70, without any additional employer benefit accruing to the member.
AMENDMENTS TO THE RULES – DETAILED DESCRIPTION
Quarterly Superannuation Guarantee Payments
15. Parts 7, 9 and 11 deal with Death Benefits, Pension Payments and Additional Accumulations, respectively.
16. Subclauses 2.1 to 2.5 amended Rules 7.3.3, 7.3.5, 9.5.5, 11.3.26 and 11.3.27 to make consequential reference changes as a result of the changes to the Superannuation Guarantee (Administration) Act 1992 made by the Taxation Laws Amendment (Superannuation) Act (No. 2) 2002 to move from annual to quarterly superannuation guarantee arrangements.
Age 70 contributions
17. Part 11 provides for addition accumulations, that is, amounts that are in addition to the standard benefits provided by the PSS.
18. Subclause 2.6 inserts a new Division 4 of Part 11 to allow voluntary member contributions for those PSS members who have reached age 70, without any additional employer benefit accruing to the member. Additional contributions can be between 2% and 10% of superannuation salary.
19. Additional contributions are paid into the PSS Fund and accrue interest at the scheme crediting rate. The additional contributions plus accumulated interest are called Accumulated Additional Contributions. The Accumulated Additional Contributions become payable when a person ceases to be a member.
20. The Accumulated Additional Contributions can not be taken as a pension by a member, or as a reversionary pension following the death of a member.