Superannuation (CSS) (Productivity Contributions) Regulations 2002 2002 No. 141
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 141
Issued by the Authority of the Minister for Finance and Administration
Superannuation Act 1976
Superannuation (CSS) (Productivity Contributions) Regulations 2002
Subsection 168(1) of the Superannuation Act 1976 (the Act) provides that the Governor-General may make Regulations for the purposes of the Act.
The Act makes provision for, and in relation to, the Commonwealth Superannuation Scheme (the CSS) which is an occupational superannuation scheme for Commonwealth employees and for certain other persons. Members of the CSS make member contributions. Generally, employer benefits accrue to the member when member contributions are payable. Employer benefits in the CSS comprise a funded employer productivity contributions component and an unfunded employer-financed component. Member contributions and employer productivity contributions are paid into the CSS Fund and attract interest at the CSS Fund's crediting rate. The unfunded employer-financed component is usually paid as a pension based on the member's length of service, age and final salary at the time of exit.
The CSS Fund is a regulated fund under the general superannuation industry rules covered in the Superannuation Industry (Supervision) Act 1993 and the Superannuation Industry (Supervision) Regulations 1994 (SIS). Section 155C of the Act allows regulations to be made to modify the operations of the Act for the purposes of enabling the CSS Fund to satisfy a condition or requirement specified in or under SIS.
The purpose of the Regulations is to ensure that the CSS Fund continues to comply with the Superannuation Industry (Supervision) Act 1993 and the Superannuation Industry (Supervision) Regulations 1994 from 1 July 2002 by providing that employer productivity contributions which are not made under an agreement certified, or an award made, by an industrial authority are not payable for members aged over 70.
From 1 July 2002, SIS will allow member contributions to be paid to a superannuation fund in respect of persons up to the time they reach age 75. However, SIS will only allow employer contributions which are not required to be made under an agreement certified, or an award made, by an industrial authority to be paid to a fund in respect of persons aged up to age 70.
Currently, the Act provides that the CSS Fund can accept member contributions if the contributions are permitted by SIS. Therefore, any changes to SIS in relation to the payment of member contributions would apply automatically to the CSS Fund. The Regulations are required because of a consequential effect to the CSS of the changes to SIS relating to member contributions. Section 110H of the Act deals with the payment of productivity contributions by employers in respect of members of the CSS. In particular, paragraph 110H(2)(a) of the Act provides that where member contributions are made, employer productivity contributions are payable. This paragraph would have the effect of allowing productivity contributions to be payable for members aged over 70 in the CSS, however because these productivity contributions are not made under an agreement certified, or an award made, by an industrial authority the CSS Fund would not be permitted by SIS to receive these contributions. Productivity contributions payable under paragraph 110H(2)(b) are not affected by the Regulations as they are required to be paid under an agreement certified, or an award made, by an industrial authority and therefore can be accepted by the CSS Fund.
Paragraph 168(13)(a) of the Act requires the CSS Board to consent to the making of the regulations unless the regulations meet an exemption specified in paragraph 168(13)(b) of the Act. The Regulations relate to the exemption stated under subparagraph 168(13)(b)(iii) of the Act and therefore the CSS Board's consent to the making of the Regulations is not required.
When section 155C was inserted into the Act it was on the understanding that any regulations modifying the operations of the Act under that section would result in amendments to the Act at the earliest possible opportunity. Accordingly, necessary amendments will be made to the Act to provide a similar effect to the Regulations when the opportunity to do so arises.
Details of the Regulations are set out in the attachment.
The Regulations commence on 1 July 2002.
SUPERANNUATION (CSS) (PRODUCTIVITY CONTRIBUTIONS) REGULATIONS 2002
Regulation 1
Regulation 1 provides that the Regulations are called the Superannuation (CSS) (Productivity Contributions) Regulations 2002
Regulation 2
Regulation 2 provides that the Regulations commence on 1 July 2002.
Regulation 3
Regulation 3 defines the terms 'Act' and 'productivity employee'. The term 'Act' is defined as the Superannuation Act 1976 and the term 'productivity employee' has the same meaning given under section 110A of that Act.
Regulation 4
Regulation 4 sets out the purpose of the Regulations.
Regulation 5
Regulation 5 provides that productivity contributions are not payable under section 110H of the Act if the SIS Act does not permit the CSS Fund to receive those contributions.