Superannuation (CSS) Productivity Contribution (2011-2012) Declaration 2011 – Explanatory Statement
1 Name of Determination
This declaration is the Superannuation (CSS) Productivity Contribution
(2011-2012) Declaration 2011.
2 Commencement
This declaration shall take effect from and including 1 July 2011.
3 Background
The Superannuation Act 1976 (the 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.
Part VIA of the Act comprising sections 110A to 110S provides for a funded productivity superannuation benefit for members of the scheme.
Section 110H of the Act requires the employer of a member of the scheme who does not pay productivity contributions in respect of the member to another scheme to pay fortnightly "productivity contributions" to the CSS.
In accordance with section 110N of the Act the Australian Reward Investment Alliance (ARIA) must pay such contributions to the CSS Fund which is established by the Act.
4 Purpose and operation of instrument
The fortnightly rate of productivity contribution payable by an employer in relation to a member is set out in the Table in section 110C of the Act. This rate varies according to the member's salary. The intention is that the contribution rate be maintained at an average of 3% of salaries.
Section 110D provides that amounts of salary and contribution specified in the Table may be varied by a Declaration by ARIA in relation to a period specified in the declaration. ARIA has delegated this power to relevant officers in Commonwealth Superannuation Administration.
The Table set out in section 110C is amended with effect from 1 July each year by a Declaration by ARIA.
5 New Productivity Contribution Rates
The new productivity contribution rates to apply with effect from 1 July 2011 are set out in the declaration.
6 References to ARIA
At the date of the signing of this determination, ARIA was legally responsible for the administration of the CSS.
As a result of the Governance of Australian Government Superannuation Schemes Bill 2011, passed by Federal Parliament on 21 June 2011 and currently awaiting Royal Assent, the responsibility for the administration of the CSS will vest in the Commonwealth Superannuation Corporation (CSC), with effect from 1 July 2011.
In accordance with section 25B of the Acts Interpretation Act 1901, any reference to ARIA in an instrument made prior to 1 July 2011 shall be construed as a reference to the CSC.
Further by virtue of clause 22 of Schedule 2 of the Superannuation Legislation (Consequential and Transitional Provisions) Bill 2011, passed by Federal Parliament on 21 June 2011 and currently awaiting Royal Assent, all current delegations under a superannuation law continue to be in force on or after 1 July 2011. As such an instrument signed by the delegate of ARIA shall be deemed to be in force after 1 July 2011 as if it were an instrument of the CSC.
7 Consultation
As the instrument is for internal machinery of Government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Overview
The Superannuation (CSS) Productivity Contribution (2011-2012) Declaration 2011 is an instrument made under the Superannuation Act 1976 to set the productivity contribution rates for the Commonwealth Superannuation Scheme (CSS) for the financial year commencing 1 July 2011. The Act provides for a funded productivity superannuation benefit for CSS members, with section 110H requiring employers to pay fortnightly productivity contributions to the CSS for members who do not pay such contributions to another scheme. Section 110N of the Act requires the Australian Reward Investment Alliance (ARIA) to pay these contributions to the CSS Fund, a responsibility that will transfer to the Commonwealth Superannuation Corporation (CSC) on 1 July 2011 due to the Governance of Australian Government Superannuation Schemes Bill 2011. The policy objective of this Declaration is to maintain the average productivity contribution rate at 3% of salaries, with the rates specified in the Table of section 110C of the Act being varied by a Declaration made by ARIA for the relevant period.
Scope and Application
The Superannuation (CSS) Productivity Contribution (2011-2012) Declaration 2011 applies to Commonwealth employees and certain other persons participating in the Commonwealth Superannuation Scheme (CSS) as defined under the Superannuation Act 1976. This instrument is concerned with setting the productivity contribution rates, which are intended to average 3% of salaries, and it governs the payments made by employers who do not contribute to other schemes. The declaration establishes the specific contribution rates for the financial year commencing 1 July 2011, as per the provisions outlined in the Act. This instrument has a national reach within the Commonwealth of Australia and applies to all entities and persons covered by the CSS. However, it is noted that any references to the Australian Reward Investment Alliance (ARIA) within the instrument, which was responsible for the CSS administration at the time of the declaration, should be construed as references to the Commonwealth Superannuation Corporation (CSC) following the legislative changes effective from 1 July 2011. This transition is pursuant to the Governance of Australian Government Superannuation Schemes Bill 2011 and the Superannuation Legislation (Consequential and Transitional Provisions) Bill 2011. No external consultation was required for this internal government instrument.
Key Provisions
The Superannuation (CSS) Productivity Contribution (2011-2012) Declaration 2011 sets out the productivity contribution rates applicable from 1 July 2011 (section 5). It specifies the rates that employers must pay into the Commonwealth Superannuation Scheme (CSS) for their employees, which vary according to the employee's salary (section 110C). The intention is for these contributions to average 3% of salaries (section 4). The Australian Reward Investment Alliance (ARIA) is responsible for these contributions, as per section 110N of the Superannuation Act 1976, and has delegated this responsibility to relevant officers within the Commonwealth Superannuation Administration (sections 4 and 6). These contributions are to be made fortnightly.
The obligations under this declaration include the calculation and payment of the productivity contributions by employers based on the rates specified in the declaration (section 110H). Employers must ensure they are paying the correct contribution rates as outlined in the declaration, which is updated annually. The declaration also mandates that ARIA, and subsequently the Commonwealth Superannuation Corporation (CSC) from 1 July 2011, must adjust the contribution rates in accordance with section 110D of the Act. The declaration specifies that any reference to ARIA in instruments made prior to 1 July 2011 should be interpreted as referring to the CSC (section 6). This ensures continuity in the administration of the CSS despite the change in responsible entity.
Breaches of the obligations outlined in the declaration may result in civil or criminal consequences. While the declaration does not explicitly state penalties, it is governed by the Superannuation Act 1976, which includes provisions for penalties. Employers who fail to make the required contributions may be subject to enforcement actions, which could include fines or other penalties as prescribed by the Act. The specific penalties would depend on the nature and severity of the breach, but could include substantial financial penalties. Additionally, ongoing non-compliance could result in further legal action against the employer.