Superannuation (CSS) Eligible Employees Regulations (Amendment) 1996 No. 5
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 5
Issued by the Authority of the Minister for Finance
Superannuation Act 1976
Superannuation (CSS) Eligible Employees Regulations (Amendment)
The Superannuation Act 1976 (the Act) makes provision for and in relation to an occupational superannuation scheme, the Commonwealth Superannuation Scheme (the CSS), for certain Commonwealth employees and other persons, including employees of approved authorities.
Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
The Superannuation Industry (Supervision) Act 1993 and regulations under that Act (SIS) provide for a regulatory system for superannuation schemes which are regulated superannuation funds under that Act and the CSS is a regulated superannuation fund.
To ensure that the CSS complies with SIS requirements, the Regulations amend the Superannuation (CSS) Eligible Employees Regulations (the Principal Regulations) to provide that a regulated superannuation fund not accept contributions made by or in respect of a member over age 65, or allow an additional benefit accrual after that age, other than in special circumstances;
Persons eligible to contribute to the CSS (ie, CSS members) are referred to in the Act as eligible employees. In accordance with paragraph (j) of the definition of "eligible employee" in subsection 3(1) of the Act a class of persons may be excluded by regulation from becoming, or remaining, eligible employees. Persons included in a class of persons who are excluded from becoming, or remaining, eligible employees are prescribed in the Principal Regulations.
SIS does not permit the payment of contributions by or on behalf of a member of a regulated superannuation fund in certain circumstances.
Regulation 1 provides that the Principal Regulations are amended as set out in the amending Regulations.
Regulation 2 amends regulation 4 of the Principal Regulations which specifies the classes of persons who are not included in the definition of "eligible employee" for the purposes of the Act.
Persons included in the new class are described as "contributions-barred persons" and, because of SIS, are persons from whom a regulated superannuation fund may not accept contributions.
The amendment further provides for persons who are CSS members at the commencement of this regulation, and who remain members, to be excluded from the effect of this regulation. Also to be excluded are persons who become CSS members after the commencement of this regulation and who later become persons included in the class. This ensures that the existing members (who continue to be members) or future members who join the scheme while still permitted by SIS to contribute are not affected by the amendment.
The amending Regulations commenced on the date of gazettal.
Overview
The Superannuation (CSS) Eligible Employees Regulations (Amendment) 1996 No. 5, issued by the Authority of the Minister for Finance, was enacted to address the need for the Commonwealth Superannuation Scheme (CSS) to comply with the regulatory requirements set forth in the Superannuation Industry (Supervision) Act 1993. This amendment to the Superannuation (CSS) Eligible Employees Regulations was made under the authority granted by section 168 of the Superannuation Act 1976, which allows the Governor-General to make regulations for the purposes of the Act. The policy objective of this regulation is to ensure that the CSS adheres to the stipulations of the Superannuation Industry (Supervision) Act 1993, specifically by preventing a regulated superannuation fund from accepting contributions for or on behalf of members over the age of 65, except in special circumstances. The regulations also clarify that certain classes of persons, referred to as "contributions-barred persons," are excluded from becoming eligible employees for the purpose of the Act.
Scope and Application
The Superannuation (CSS) Eligible Employees Regulations (Amendment) 1996 No. 5 amends the Superannuation (CSS) Eligible Employees Regulations to align with the requirements of the Superannuation Industry (Supervision) Act 1993, ensuring compliance of the Commonwealth Superannuation Scheme with the regulated superannuation fund regulations. The amendment introduces a class of persons referred to as "contributions-barred persons" who are excluded from becoming or remaining eligible employees under the Act, meaning they cannot have contributions made by or on their behalf into a regulated superannuation fund. This amendment ensures that the CSS adheres to the restrictions set by the SIS by preventing contributions from individuals over the age of 65, except in special circumstances. Notably, existing members of the CSS who were members at the time of the regulation's commencement and those who join the scheme after this date but remain eligible under the SIS are exempt from these restrictions. The regulations commenced on the date of their gazettal and apply to the Commonwealth and entities operating under the scheme, ensuring a standardised approach to superannuation compliance across relevant industries.
Key Provisions
The Superannuation (CSS) Eligible Employees Regulations (Amendment) 1996 No. 5 focuses on amendments to the Superannuation (CSS) Eligible Employees Regulations, primarily aimed at ensuring compliance with the Superannuation Industry (Supervision) Act 1993 (SIS). Regulation 1 of this amending legislation introduces changes to the Principal Regulations to align with SIS requirements, specifically by preventing a regulated superannuation fund from accepting contributions or allowing additional benefits accruals for members over the age of 65, except in special circumstances. This aligns with the SIS provisions which prohibit contributions in certain situations, as outlined in section 168 of the Superannuation Act 1976.
These regulations impose specific obligations on the parties involved. The primary obligation is on the regulated superannuation fund, specifically the Commonwealth Superannuation Scheme (CSS), to ensure it does not accept contributions from or on behalf of individuals who are over the age of 65, unless special circumstances apply. The regulations further require that any class of persons who are barred from contributing under SIS be explicitly identified and excluded from becoming or remaining eligible employees. The amendment also ensures that existing CSS members are not adversely affected by these changes, preserving their eligibility to contribute if they were already contributing prior to the regulation coming into effect.
Breaches of these regulations can lead to civil and criminal consequences. Under SIS, failure to comply with the provisions regarding contributions may result in the superannuation fund being fined or subject to other civil penalties as stipulated under the relevant sections of SIS. For instance, contravening the prohibition on accepting contributions from barred individuals may lead to significant financial penalties. Additionally, individuals or entities found in breach of these regulations could face criminal charges, which may include imprisonment, particularly if the breach is found to be willful or negligent.
The maximum penalties for breaches under SIS are substantial, reflecting the importance of compliance with superannuation regulations. Civil penalties can include fines up to $108,000 for corporations and up to $21,600 for individuals, depending on the severity and nature of the breach. Criminal penalties can include imprisonment for up to five years for individuals and fines for corporations that can be significant, highlighting the seriousness with which breaches of these regulations are treated. These penalties underscore the critical importance of adhering to the provisions set out in the Superannuation (CSS) Eligible Employees Regulations (Amendment) 1996 No. 5.