Superannuation Act 1976 (Interest) Determination No. 172 - Explanatory Statement
1 Name of Determination
This determination is the Superannuation Act 1976 (Interest) Determination No. 172.
2 Purpose and operation of instrument
Section 154A of the Superannuation Act 1976 provides that where, under any provision of this Act, interest is payable in respect of an amount, the interest must be calculated, and is payable, in accordance with a determination made by the CSS Board.
3 Principal Instrument
The principal instrument means the determination, as amended, in force by virtue of paragraph 154A(4)(b) of the Superannuation Act 1976. The principal instrument has been amended by consecutively numbered determinations.
4 Investment strategy choice
There are currently two different investment strategies available for the Commonwealth Superannuation Scheme (CSS): the Default Fund investment strategy or, since 1 December 2004, the Cash Option investment strategy for those people who switch to this investment strategy.
The current Default Fund daily compounding interest rate is set out in Schedule 2 to the principal instrument.
The current Cash Option daily compounding interest rate is set out in Schedule 3 to the principal instrument.
5 Interest rate determinations apply from the date specified
This determination amends Schedule 2 to the principal instrument by inserting a new Default Fund interest rate to apply from the date specified.
This determination amends Schedule 3 to the principal instrument by inserting a new Cash Option interest rate to apply from the date specified.
Overview
The Superannuation Act 1976 (Interest) Determination No. 172, enacted by the Commonwealth Superannuation Scheme (CSS) Board, addresses the need for specific interest rates to be applied to superannuation accounts under the Superannuation Act 1976. This determination was introduced to ensure that the interest payable on superannuation amounts is calculated in accordance with a rate set by the CSS Board, as mandated by Section 154A of the Act. The purpose of this determination is to establish the daily compounding interest rates for the two investment strategies available under the CSS: the Default Fund and the Cash Option. By setting these rates, the determination ensures that interest is accurately calculated and paid, thereby maintaining the integrity and value of superannuation funds over time.
Scope and Application
The Superannuation Act 1976 (Interest) Determination No. 172 applies to the calculation of interest payable on amounts under the Superannuation Act 1976. Specifically, it governs the interest rates for the Commonwealth Superannuation Scheme (CSS), including the Default Fund and the Cash Option investment strategies. The determination is made by the CSS Board as per Section 154A of the Superannuation Act 1976. This instrument outlines the daily compounding interest rates applicable to the Default Fund and the Cash Option, which are detailed in Schedules 2 and 3 of the principal instrument respectively. The interest rates are set to take effect from the date specified in the determination and apply to all persons and entities participating in the CSS. The principal instrument, as amended by consecutively numbered determinations, provides the framework for these calculations. Notably, this determination does not specify exclusions or exemptions beyond the general scope of the Superannuation Act 1976.
Key Provisions
The Superannuation Act 1976 (Interest) Determination No. 172 specifies the interest rates to be applied in the Commonwealth Superannuation Scheme (CSS), as outlined in section 154A of the Superannuation Act 1976 (section 154A). This determination, made by the CSS Board, sets the daily compounding interest rates for both the Default Fund and the Cash Option investment strategies (sections 4 and 5). These rates are effective from the date specified in the determination.
Entities governed by the Act must adhere to the prescribed interest rates for the calculation and payment of interest on amounts under the CSS. This includes ensuring that the correct interest rate, as determined by the CSS Board, is applied to the respective investment strategies. Specifically, the Default Fund's daily compounding interest rate is listed in Schedule 2 of the principal instrument, and the Cash Option's rate is listed in Schedule 3 (section 4).
Breaches of the provisions set out in the Superannuation Act 1976 and its determinations could potentially lead to legal consequences. However, the explanatory statement does not explicitly outline specific offences, penalties, or consequences for non-compliance. It is likely that failure to comply with the prescribed interest rates could result in disputes or legal actions, though the specific penalties would depend on the broader legislative context and the nature of the non-compliance.