Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3) 1999 No. 342
EXPLANATORY STATEMENT
STATUTORY RULES 1999 No. 342
Issued by the Authority of the Minister for Finance and Administration
Superannuation Act 1976
Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3)
The Superannuation Act 1976 (the 1976 Act) makes provision for, and in relation to, the Commonwealth Superannuation Scheme (CSS) which is an occupational superannuation scheme for Commonwealth employees and for certain other persons. Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of that Act.
Subsection 3(1) of the 1976 Act contains the definition of "eligible employee" which describes persons who may contribute to the CSS (ie CSS members). Paragraph G) of that definition provides that a person who would otherwise be an eligible employee may be included in a prescribed class of persons who are not eligible employees. The Superannuation (CSS) Eligible Employees Regulations (the Principal Regulations) contain classes of persons that are prescribed classes of persons for the purposes of paragraph G) of the definition of eligible employee.
The purpose of the Regulations is to amend the Principal Regulations to provide that, if a body known as the Federal Magistrates Court is established by statute, a person who consequently becomes a Federal Magistrate may not be a member of the CSS. Federal Magistrates are justices for the purposes of the Constitution. Membership of the CS S by persons who are justices for the purposes of the Constitution may be in conflict with section 72(iii) of the Constitution. Section 72(iii) of the Constitution provides that a justice shall receive such remuneration as the Parliament may fix. The Australian Government Solicitor considers that there is a good argument that a justice's remuneration would not be fixed in the required sense if the amount of that remuneration was variable and dependent upon the exercise of an actuary's discretion. Certain benefits payable from the CSS have regard to amounts calculated on the basis of factors determined by an actuary.
The Principal Regulations already provide in paragraphs 4(1)(aa) and 4(1)(o) that a statutory office holder who is a member of an employer-sponsored superannuation scheme in relation to that statutory office is not to be a CSS member. The superannuation arrangement proposed for Federal Magistrates would in most instances mean that these provisions would not pen-nit them to be CSS members. These Regulations put the matter beyond doubt, which is appropriate to avoid a potential constitutional conflict.
Details of the amendments are explained in the Attachment.
The Regulations commence on gazettal.
ATTACHMENT
SUPERANNUATION (CSS) ELIGIBLE EMPLOYEES AMENDMENT REGULATIONS 1999 (NO. 3)
Regulation 1
Regulation 1 provides that the Regulations are called the Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3).
Regulation 2
Regulation 2 provides that the Regulations commence on gazettal.
Regulation 3
Regulation 3 provides that the Principal Regulations are amended in accordance with Schedule 1.
Schedule 1
Item 1 amends the punctuation of sub paragraph 4(1)(zq) (iv) as a consequence of the insertion of paragraph 4(1)(zr) by item 2.
Item 2 inserts paragraph 4(1)(zr). The inserted paragraph describes a class of persons who are not CSS members. That class of persons comprises persons who, if a body known as the Federal Magistrates Court is established by statute, become Federal Magistrates as a consequence.
Overview
The Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3) were enacted to address a potential constitutional conflict that could arise if Federal Magistrates, who would become justices under the Constitution, were members of the Commonwealth Superannuation Scheme (CSS). The Superannuation Act 1976 provides for the CSS, an occupational superannuation scheme for Commonwealth employees, and allows the Governor-General to make regulations for the purposes of the Act. The policy objective of these Regulations is to amend the existing Principal Regulations to ensure that Federal Magistrates, once appointed, do not become CSS members. This amendment is necessary to avoid any conflict with section 72(iii) of the Constitution, which mandates that the remuneration of a justice be fixed by Parliament. The Regulations clarify that Federal Magistrates, who would be subject to actuarial discretion for certain CSS benefits, should not be CSS members to maintain the integrity of their fixed remuneration as required by the Constitution. The Regulations were issued by the Minister for Finance and Administration and took effect upon gazette publication.
Scope and Application
The Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3) applies to the Commonwealth Superannuation Scheme (CSS) which is an occupational superannuation scheme for Commonwealth employees and certain other persons. The purpose of these regulations is to amend the existing Principal Regulations to explicitly exclude Federal Magistrates from being eligible members of the CSS. Federal Magistrates are justices for the purposes of the Australian Constitution, and their inclusion in the CSS could conflict with section 72(iii) of the Constitution, which stipulates that a justice's remuneration must be fixed by Parliament. The amendments ensure that if a Federal Magistrates Court is established by statute, the individuals who become Federal Magistrates are not eligible to be CSS members, thereby avoiding any potential constitutional conflicts. The regulations come into effect upon gazettal and make specific amendments to the Principal Regulations to clarify the exclusion of Federal Magistrates from the CSS membership.
Key Provisions
The Superannuation (CSS) Eligible Employees Amendment Regulations 1999 (No. 3) (the Regulations) are designed to amend the existing Principal Regulations to exclude certain individuals from being eligible members of the Commonwealth Superannuation Scheme (CSS). Regulation 3 specifies that the Principal Regulations are amended as outlined in Schedule 1. The key amendment is the insertion of a new paragraph 4(1)(zr) into the Principal Regulations (subsection (1) of regulation 4), which further defines the classes of persons who are not eligible employees under the Superannuation Act 1976 (section 3(1)). This amendment explicitly states that if a body known as the Federal Magistrates Court is established by statute, any person who becomes a Federal Magistrate as a consequence of this establishment will not be eligible to be a CSS member.
The Regulations impose specific obligations on the parties they govern. Firstly, the new paragraph 4(1)(zr) ensures that individuals who become Federal Magistrates under the Federal Magistrates Court will not be eligible to join or remain members of the CSS. This requirement is intended to prevent any potential conflict with section 72(iii) of the Constitution, which stipulates that a justice shall receive such remuneration as the Parliament may fix. By excluding Federal Magistrates from the CSS, the Regulations help to ensure that any benefits or superannuation contributions they receive do not conflict with their constitutional remuneration requirements. Additionally, the Regulations clarify and reinforce existing provisions that already exclude statutory office holders who are members of other employer-sponsored superannuation schemes from being CSS members.
Failure to comply with the provisions of the Regulations could result in legal and administrative consequences for those affected. While the Regulations themselves do not explicitly outline penalties for non-compliance, breaches of the Superannuation Act 1976 or the regulations made under it could lead to civil or criminal penalties. Under the Superannuation Act 1976, certain offences could attract fines of up to $22,200 for individuals and $111,000 for corporations, depending on the severity and nature of the breach. Additionally, the Act may also provide for the recovery of lost superannuation benefits or other appropriate remedies for non-compliance. The exclusion of Federal Magistrates from CSS membership is a clear directive intended to avoid any potential constitutional conflict and ensure compliance with the remuneration provisions outlined in the Constitution.