Overview

The Superannuation Act 1990 (Division of Costs) Determination No. 2 Amendment Determination 2011 (No. 1) was enacted to align the division of costs within the Public Sector Superannuation Scheme (PSS) with the structural changes introduced by the Governance of Australian Government Superannuation Schemes Act 2011. This legislation was passed by the Australian Parliament and is aimed at streamlining the administration of superannuation funds for Commonwealth employees by consolidating the trustee bodies. The Amending Determination ensures that the costs associated with the administration and management of the PSS Fund are appropriately divided between the Commonwealth and the Australian Reward Investment Alliance (now known as the Commonwealth Superannuation Corporation) in accordance with the new governance framework established by the Governance Act. The amendments in the determination aim to reflect the updated responsibilities and roles of the consolidated trustee body in managing the PSS Fund.

Scope and Application

The Superannuation Act 1990 (Division of Costs) Determination No. 2 Amendment Determination 2011 (No. 1) pertains to the Public Sector Superannuation Scheme (PSS), which is designed to provide benefits for certain Commonwealth employees and other specified individuals. This amendment determination applies to the entities involved in the management and administration of the PSS, including the Australian Reward Investment Alliance (ARIA), now known as the Commonwealth Superannuation Corporation (CSC), which is the trustee of the superannuation schemes. The scope of the Act encompasses the division of administrative costs between the Commonwealth and CSC out of the PSS Fund. It specifically identifies the costs that are payable by the Commonwealth and those that are payable by CSC from the PSS Fund. The determination is made in accordance with the provisions of the Superannuation Act 1990 and is effective from the commencement of the Governance of Australian Government Superannuation Schemes Act 2011. This Act has a national reach within Australia, affecting entities and individuals involved in public sector superannuation schemes. The amendment serves to update references from "the Board" and "Trustees" to "CSC" and "directors," reflecting the structural changes brought about by the Governance Act.

Key Provisions

The Superannuation Act 1990 (Division of Costs) Determination No. 2 Amendment Determination 2011 (No. 1) (the "Amending Determination") amends the Superannuation Act 1990 (Division of Costs) Determination No. 2 (the "Principal Determination"). The Amending Determination was enacted as part of public sector superannuation reforms provided for in the Governance of Australian Government Superannuation Schemes Act 2011 (the "Governance Act"). The Amending Determination is intended to bring about a number of changes to the Principal Determination to reflect the creation of the Commonwealth Superannuation Corporation (CSC) and its functions and powers under the Governance Act. The changes made by the Amending Determination include updating references from "the Board" to "CSC" and inserting definitions for "CSC" (sections 1, 3 and 4). The Amending Determination imposes several obligations and requirements on the parties and entities it governs. It requires the costs of administering the Superannuation Act 1990 and the Trust Deed for the Public Sector Superannuation Scheme (PSS) to be paid as the Minister determines in accordance with the Principal Determination (subsection 34(1) of the 1990 Act). The costs that are payable by the Commonwealth and those costs that are payable by CSC out of the PSS Fund must be identified by amount or otherwise (subsection 34(1A) of the 1990 Act). The Amending Determination also requires that references to "the Board" in a number of legislative instruments be amended to refer to "CSC" and references to "Trustees" to be amended to refer to "directors". Breach of the provisions of the Amending Determination may result in civil or criminal consequences, depending on the nature and severity of the breach. For example, section 145 of the Governance Act provides that a person who contravenes a provision of the Governance Act is liable to a penalty not exceeding the greater of three times the benefit obtained, if any, from the contravention, or 50,000 penalty units (currently AUD 500,000). In addition, section 148 of the Governance Act provides that a person who engages in conduct that constitutes a serious contravention of the Governance Act is liable to a penalty not exceeding the greater of six times the benefit obtained, if any, from the contravention, or 100,000 penalty units (currently AUD 1,000,000). The maximum penalties for contraventions of the Amending Determination are not specified in the Explanatory Statement, but may be found in the relevant legislation. It is important for parties and entities governed by the Amending Determination to be aware of their obligations and requirements under the legislation to avoid potential civil or criminal consequences.