Superannuation Act 1990 (Interest) Determination No. 167 - Explanatory Statement
1 Name of Determination
This determination is the Superannuation Act 1990 (Interest) Determination No. 167.
2 Purpose and operation of instrument
Clause 3.1 of the Trust Deed made under Part 2 of the Superannuation Act 1990 provides that the PSS Board is empowered to determine interest rates for the purposes of the Public Sector Superannuation (PSS) scheme.
3 Principal instrument
The principal instrument is the Superannuation Act 1990 (Interest) Determination No. 1. The principal instrument has been amended by consecutively numbered determinations.
4 Investment strategy choice
There are currently two different investment strategies available for the PSS scheme: the Default Fund investment strategy or, since 1 December 2004, the Cash Option investment strategy for preserved benefit members 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 principle instrument by inserting a new Cash Option interest rate to apply from the date specified.
Overview
The Superannuation Act 1990 (Interest) Determination No. 167 was enacted to address the need for updating interest rates applicable to the Public Sector Superannuation (PSS) scheme as mandated by Clause 3.1 of the Trust Deed under Part 2 of the Superannuation Act 1990. This determination, issued by the PSS Board, ensures that the interest rates for both the Default Fund and the Cash Option investment strategies are adjusted to reflect current financial conditions. The principal instrument for this determination is the Superannuation Act 1990 (Interest) Determination No. 1, which has been amended through consecutively numbered determinations. This ongoing amendment process allows for timely adjustments to the interest rates, ensuring that the PSS scheme remains aligned with the prevailing economic environment. The policy objective of this determination is to maintain the integrity and sustainability of the PSS scheme by providing accurate and updated interest rates for the benefit of its members.
Scope and Application
The Superannuation Act 1990 (Interest) Determination No. 167 applies to the Public Sector Superannuation (PSS) scheme, managed by the PSS Board, and sets the interest rates for both the Default Fund and Cash Option investment strategies. This determination is a subordinate instrument that amends the principal instrument, the Superannuation Act 1990 (Interest) Determination No. 1, which has been subject to consecutive amendments. The Default Fund and Cash Option investment strategies cater to different preferences within the PSS scheme, with specific interest rates detailed in the schedules of the principal instrument. The interest rates set by this determination are effective from the specified date, impacting the calculation of returns for superannuation members under the PSS scheme. This determination does not specify any exclusions or exemptions but extends the principal instrument's authority to adjust interest rates periodically to ensure the scheme's financial sustainability and alignment with market conditions.
Key Provisions
The Superannuation Act 1990 (Interest) Determination No. 167, primarily, sets out the interest rates for the Public Sector Superannuation (PSS) scheme. Clause 3.1 of the Trust Deed under Part 2 of the Superannuation Act 1990 empowers the PSS Board to determine these interest rates, as referenced in section 3.1. This determination introduces new interest rates for both the Default Fund and the Cash Option, effective from a specified date, as outlined in sections 4 and 5. The Default Fund interest rate is detailed in Schedule 2, while the Cash Option interest rate is detailed in Schedule 3 of the principal instrument, which is the Superannuation Act 1990 (Interest) Determination No. 1, and has been subject to amendments through consecutively numbered determinations.
The obligations imposed by this determination on the PSS Board include the responsibility to ensure that the interest rates specified are accurately calculated and applied to the relevant funds within the PSS scheme. The PSS Board must also ensure that these rates are updated and communicated to relevant stakeholders, such as superannuation fund managers and PSS scheme members, in a timely manner. This is necessary to maintain transparency and fairness in the management of superannuation benefits.
The Act imposes various requirements on the parties involved, including the PSS Board, fund managers, and scheme members. The PSS Board must adhere to the interest rates determined in this determination and ensure their proper implementation. Fund managers are required to apply these interest rates to the respective funds and report any discrepancies. Scheme members, on the other hand, are entitled to the benefits accruing from these interest rates, as calculated and managed by the fund managers under the oversight of the PSS Board.
Failure to comply with the provisions of this determination can lead to various consequences. While the Act does not explicitly outline specific offences or penalties in the explanatory statement, breaches of similar provisions in the Superannuation Act 1990 can result in civil and criminal penalties. Civil penalties may include fines, and in severe cases, criminal penalties may include imprisonment. The exact penalties depend on the nature and severity of the breach, as well as any subsequent judicial interpretation and application of the relevant sections of the Act.