explanatory statement
Issued by the authority of the Minister for Finance and Administration
Superannuation Act 1976
Declaration under paragraph (j) of the definition of eligible employee included in subsection 3(1)
The Superannuation Act 1976 (the Act) makes provision for and in relation to the Commonwealth Superannuation Scheme (CSS) for Australian Government employees and for certain other persons.
Subsection 3(1) of the Act contains the definition of the term ‘eligible employee’ that describes various classes of persons who may contribute to the CSS (ie CSS members). Paragraph (j) of the definition provides that the Minister may declare a class of persons not to be CSS members.
The Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (the Principal Declaration) identifies the persons who are declared not to be CSS members under paragraph (j) of the definition of eligible employee.
The purpose of the Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 2) (the Amending Declaration) is to amend the Principal Declaration in order to provide when employees of the Military Superannuation and Benefits Board of Trustees No. 1 (the MSB Board) cease CSS membership.
The Amending Declaration provides that CSS membership for employees of the MSB Board will cease when the employee ceases employment with the MSB Board or where the person becomes a casual or temporary part‑time employee of the MSB Board.
The Amending Declaration has been prepared in consultation with the Department of Defence and was drafted by the Office of Legislative Drafting and Publishing.
No further consultation is required as the instrument is machinery in nature and will not alter existing arrangements for employees of ComSuper who will transfer to the MSB Board following the commencement of this instrument and future employees of the MSB Board who have CSS membership prior to commencing employment with the MSB Board.
The Amending Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Amending Declaration commences on the day after registration on the Federal Register of Legislative Instruments.
The details of the Amending Declaration are explained in the Attachment.
Attachment
Superannuation (CSS) (Eligible Employees – EXclusion) Amendment Declaration 2005 (No. 2)
Section 1
This section provides that the name of the Declaration is the Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 2).
Section 2
This section provides for the Declaration to commence on the day after it is registered.
Section 3
This section provides that Schedule 1 of the Declaration amends the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 (the Principal Declaration).
Schedule 1 – Amendments
Item 1 inserts item 23 into Schedule 1 of the Principal Declaration, which describes the circumstances that result in CSS membership of employees of the Military Superannuation and Benefits Board of Trustees No. 1 (the MSB Board) ceasing. Item 23 provides that CSS membership ceases for a person who has CSS membership through paragraph 4(2)(o) of the Superannuation (CSS) (Eligible Employees – Inclusion) Declaration 2003 when the person:
- ceases employment with the MSB Board; or
- becomes a casual or temporary part‑time employee of the MSB Board.
Overview
The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 2) was introduced to amend the existing Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003, focusing on the specific circumstances under which employees of the Military Superannuation and Benefits Board of Trustees No. 1 (MSB Board) cease their Commonwealth Superannuation Scheme (CSS) membership. This amendment was necessary to address a gap in the original declaration by clarifying that CSS membership for these employees would terminate either upon cessation of employment with the MSB Board or upon their transition to a casual or temporary part-time status within the MSB Board. The enacting body for this declaration is the Minister for Finance and Administration, and the policy objective is to ensure that the provisions of the Superannuation Act 1976 are accurately applied to reflect the changing employment circumstances of MSB Board employees. The declaration is machinery in nature and does not require further consultation, as it pertains to existing arrangements without altering the rights of current or future employees of the MSB Board.
Scope and Application
The Superannuation Act 1976 applies to Australian Government employees and certain other persons, specifically those eligible to contribute to the Commonwealth Superannuation Scheme (CSS). The Act, as amended by the Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 2), clarifies the circumstances under which employees of the Military Superannuation and Benefits Board of Trustees No. 1 (MSB Board) cease to be members of the CSS. The amendment specifies that CSS membership for such employees will terminate either when they cease employment with the MSB Board or when they become casual or temporary part-time employees of the MSB Board. This amendment was made in consultation with the Department of Defence and does not affect existing arrangements for employees transferring from ComSuper to the MSB Board or for future employees who already have CSS membership prior to commencing employment with the MSB Board. The Amending Declaration is a legislative instrument under the Legislative Instruments Act 2003 and comes into effect on the day after its registration on the Federal Register of Legislative Instruments.
Key Provisions
The Superannuation (CSS) (Eligible Employees – Exclusion) Amendment Declaration 2005 (No. 2) primarily modifies the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003. This amendment targets employees of the Military Superannuation and Benefits Board of Trustees No. 1 (MSB Board) and their Commonwealth Superannuation Scheme (CSS) membership status (s. 3). The amendment stipulates that CSS membership for these employees will cease under specific conditions, namely when the employee terminates their employment with the MSB Board or when the employee transitions to a casual or temporary part-time employment role with the MSB Board (Schedule 1, Item 23).
Under the amended declaration, the obligations for the MSB Board and its employees are clear. The MSB Board must ensure that employees' CSS membership status is reviewed and updated in accordance with the specified conditions. Employees who cease their employment or become casual or temporary part-time employees must be notified of the cessation of their CSS membership. Additionally, the MSB Board must comply with the procedural requirements for registration and notification as stipulated in the Legislative Instruments Act 2003.
Failure to adhere to the provisions of the Superannuation Act 1976 and the amended declaration may result in civil or administrative consequences. While the Act itself does not specify particular offences or penalties for breaches related to the eligibility criteria for CSS membership, non-compliance with superannuation laws generally could result in significant penalties. For instance, breaches of the Superannuation Industry (Supervision) Act 1993 can lead to fines and imprisonment. The maximum penalties for breaches under this Act can reach up to $210,000 for individuals and $1,050,000 for corporations, reflecting the seriousness with which non-compliance is treated. Additionally, affected employees may pursue legal action for any financial losses incurred due to improper cessation of their CSS membership.