Superannuation (Continuing Contributions for Benefits) Regulations (Amendment) 1992 No. 460
EXPLANATORY STATEMENT
STATUTORY RULES 1992 No. 460
ISSUED BY THE AUTHORITY OF THE MINSTER FOR FINANCE
SUPERANNUATION ACT 1965
SUPERANNUATION (CONTINUING CONTRIBUTIONS FOR BENEFITS) REGULATIONS (AMENDMENT)
The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme (the CSS) for Commonwealth employees and certain other persons. Persons eligible to contribute to the CSS are referred to in the Act as eligible employees.
Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
The term "eligible employee" is defined in subsection 3(1) of the Act. In accordance with paragraph (ea) of the definition, the term includes a person to whom section 14A of the Act applies. Regulations under section 14A may specify classes of persons to which the section applies and may modify the Act in respect of such persons. These provisions are contained in the Superannuation (Continuing Contributions for Benefits) Regulations (the Regulations).
The Regulations provide, with certain exceptions, that persons who become members of another superannuation scheme cease to be persons to whom section 14A applies; as a consequence, such persons are excluded from remaining contributors to the CSS.
Under the industrial agreement of 4 December 1992 between the Commonwealth and public sector unions, Senior Officers employed by the Commonwealth may be eligible to receive performance pay.
It is possible that superannuation could be provided on performance based pay at some time in the future with contributions being paid to a scheme other than the CSS. In such circumstances, it would be intended that persons who make superannuation contributions on the basis of performance pay to a separate scheme not be excluded from remaining members of the CSS. Accordingly, the Regulations are amended to ensure that the existing exclusions would not affect such persons.
Details of the proposed Regulations are as follows.
Regulation 1 provides that the Regulations are amended as set out in the Amending Regulations.
Regulation 2 inserts a definition of "performance pay" in the Interpretation provisions of the Regulations.
Regulation 3 amends subparagraph 3(1)(d)(iii) of the Regulations to provide that persons will not be included in the class of persons described in paragraph 3(1)(d) as a class of persons to which section 14A does not apply if they become contributors solely in relation to performance pay to a superannuation scheme other than the CSS.
Subregulations 4.1, 4.2, 4.3 and 4.4 amend the provisions of regulation 3A to provide that persons will continue to be included in the classes of persons described in paragraphs (a), (d), (e) and respectively as classes of persons to which section 14A applies if they become contributors solely in relation to performance pay to a superannuation scheme other than the CSS.
Subregulations 5.1, 5.2 and 5.3 amend the provisions of subregulations 4(1), (5) and (6) respectively to provide that section 14A will not cease to apply to a person solely by reason that the person becomes a contributor in relation to performance pay to a superannuation scheme other than the CSS.
The Regulations commence on gazettal.
Overview
The Superannuation (Continuing Contributions for Benefits) Regulations (Amendment) 1992 No. 460 amends the existing regulations under the Superannuation Act 1976, addressing a specific gap in the superannuation scheme eligibility criteria for Commonwealth employees and other eligible persons. The original regulations excluded individuals who contributed to another superannuation scheme from remaining contributors to the Commonwealth superannuation scheme (CSS). However, under a new industrial agreement with public sector unions, Senior Officers employed by the Commonwealth may be eligible for performance pay, which could potentially lead to superannuation contributions to a scheme other than the CSS. The objective of this amendment is to ensure that individuals making superannuation contributions based on performance pay to a separate scheme are not excluded from remaining members of the CSS. The regulations were issued by the authority of the Minister for Finance and aim to align the superannuation scheme with the new industrial agreement terms.
Scope and Application
The Superannuation (Continuing Contributions for Benefits) Regulations (Amendment) 1992 pertains to the Superannuation Act 1976 and applies to eligible employees, including those specified under section 14A of the Act, who are part of the Commonwealth superannuation scheme (CSS). This regulation primarily concerns the continued eligibility of certain persons to contribute to the CSS even when they make superannuation contributions based on performance pay to a scheme other than the CSS. The amendment ensures that such individuals are not excluded from remaining contributors to the CSS. The scope of these regulations extends to Commonwealth employees and other eligible persons defined under the Act, thereby ensuring that the provisions of the CSS remain applicable despite participation in other superannuation schemes. The geographic reach of these regulations is national, given the federal nature of the superannuation scheme. These regulations are designed to be applied through subordinate instruments and commence on gazettal.
Key Provisions
The Superannuation (Continuing Contributions for Benefits) Regulations (Amendment) 1992 No. 460 amends the existing regulations under the Superannuation Act 1976 to accommodate changes in superannuation contributions related to performance pay. Regulation 1 outlines the amendments made to the original regulations. Regulation 2 introduces a new definition for "performance pay" within the Interpretation provisions, clarifying the term for the purposes of these regulations. Regulation 3 modifies subparagraph 3(1)(d)(iii) to ensure that individuals who make contributions to a superannuation scheme other than the CSS based solely on performance pay are not excluded from being contributors under section 14A of the Act. Subregulations 4.1, 4.2, 4.3, and 4.4 further clarify that individuals contributing to a superannuation scheme based solely on performance pay will continue to be included in the classes of persons to which section 14A applies. Finally, subregulations 5.1, 5.2, and 5.3 adjust the provisions of subregulations 4(1), (5), and (6) to ensure section 14A does not cease to apply to a person merely because they become a contributor to a superannuation scheme based on performance pay.
These amendments impose specific obligations on entities and individuals involved in superannuation contributions. Eligible employees who receive performance pay must ensure they comply with the amended regulations to continue their contributions to the CSS. The amendments require entities and employers to identify and correctly classify contributions made on the basis of performance pay, ensuring that these contributions do not exclude individuals from being eligible contributors to the CSS. The Act also mandates that the relevant superannuation schemes and administrators update their records and systems to reflect these changes.
Breaching the provisions of the Superannuation Act 1976 or the amended regulations may result in civil or criminal penalties. While the specific penalties for non-compliance are not detailed in the explanatory statement, it is common for breaches of superannuation laws to incur significant fines and potential imprisonment for individuals responsible for the breach. The exact penalties would depend on the nature and severity of the non-compliance, as outlined in other sections of the Superannuation Act 1976 and related legislation. These measures are in place to ensure compliance and protect the rights of eligible employees to continue contributing to the CSS.