Superannuation (Deferred Benefits) Regulations (Amendment) 1995 No. 406
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 406
Issued by the Authority of the Minister for Finance
Superannuation Act 1976
Superannuation (Deferred Benefits) Regulations (Amendment)
The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to an occupational superannuation scheme, the Commonwealth Superannuation Scheme (the CSS), for Commonwealth employees and certain other persons. Members of the CSS are referred to in that Act as eligible employees.
Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of that Act.
The purpose of the Regulations is to enable the CSS to comply with the Superannuation Industry (Supervision) Act 1993 and the regulations under that Act (SIS). SIS provides a regulatory system for superannuation funds including public sector superannuation schemes such as the CSS. SIS provides, among other things, that a member's right or claim to accrued benefits must not be altered adversely to the member by amendment of the governing rules except in certain limited circumstances (eg to comply with other SIS rules).
Section 155C of the 1976 Act provides for the making of regulations under that Act to make such provision as is necessary for the purpose of enabling the CSS to satisfy any condition or requirement specified in SIS and certain other laws.
Prior to the amendments to the 1976 Act made by Superannuation Legislation Amendment Act (No. 1) 1995 (the amending Act), certain CSS members who had elected for preservation on cessation of membership and to whom deferred benefits had become applicable as a result, could request the payment of the deferred benefit on reaching minimum retiring age.
As part of the process of ensuring compliance with SIS, the 1976 Act was amended by the amending Act to ensure that the CSS Board may pay benefits only when such payments are permitted by SIS. These amendments inadvertently removed a right for payment of an accrued deferred benefit to certain former CSS members who have reached minimum retiring age by requiring that payment could only be made if they had reached age 55 and retired from the workforce.
However, SIS allows most components of deferred benefits to become payable at any time allowed by the scheme rules, if the person ceases current employment at the time of ceasing membership of the scheme. Therefore the amending Regulations amend the Superannuation (Deferred Benefits) Regulations (the Principal Regulations) to restore the right of a person whose cessation of membership coincided with change or cessation of employment to request the payment of a deferred benefit on attaining minimum retiring age.
The amending Regulations amend the Principal Regulations to insert a new regulation 4 to provide that sections 111A and 138 of the 1976 Act be read as if the provisions in these section restricting the payment of deferred benefits on or after minimum retiring age were omitted. This has the effect of restoring the right for certain former CSS members to have deferred benefits payable on request after attaining minimum retiring age, that was removed by the amending Act.
The amending Regulations also change the citation of the Principal Regulations to conform with the recently adopted method of citation for regulations under the 1976 Act. The new citation is "Superannuation (CSS) Deferred Benefits Regulations".
When section 155C was inserted in to the 1976 Act, it was agreed that any regulations made under that section would be followed by amending legislation as soon as possible. Accordingly, it is intended that the 1976 Act be amended in a similar way to the proposed regulations by the Superannuation Legislation Amendment Act 1996 which is proposed for introduction in the 1996 Autumn Sittings of Parliament.
The provisions in the amending Act concerning payment of deferred benefits apply in relation to any person who ceased to be a member of the CSS from 1 July 1995. In order to ensure that no removal of accrued rights occurs the amending Regulations commence from that date. A retrospective date of effect in respect of these regulations complies with subsection 48(2) of the Acts Interpretation Act 1901 in that the rights of the persons concerned are not affected in a manner prejudicial to them, neither are liabilities imposed on them.
Overview
The Superannuation (Deferred Benefits) Regulations (Amendment) 1995 No. 406, issued by the authority of the Minister for Finance, amends the existing Superannuation (Deferred Benefits) Regulations to address a legislative gap that inadvertently removed the right for certain former Commonwealth Superannuation Scheme (CSS) members to request the payment of deferred benefits upon reaching the minimum retiring age. This gap arose from the amendments made by the Superannuation Legislation Amendment Act (No. 1) 1995, which aligned the CSS with the Superannuation Industry (Supervision) Act 1993. The Superannuation Act 1976 allows for the creation of regulations to ensure the CSS adheres to specified conditions and requirements, including those under the SIS Act. The policy objective of these amending regulations is to restore the rights of affected CSS members in line with the provisions of the SIS Act, ensuring that no member's accrued rights are adversely affected.
Scope and Application
The Superannuation (Deferred Benefits) Regulations (Amendment) 1995, No. 406, made under the authority of the Minister for Finance, amends the Superannuation (Deferred Benefits) Regulations to align with the requirements of the Superannuation Industry (Supervision) Act 1993 (SIS). These regulations apply to members of the Commonwealth Superannuation Scheme (CSS), specifically to those eligible employees who have ceased membership and had deferred benefits applicable to them. The amendments restore the right for certain former CSS members to request the payment of deferred benefits upon reaching minimum retiring age, a right that was inadvertently removed by the Superannuation Legislation Amendment Act (No. 1) 1995. The new regulations, now titled "Superannuation (CSS) Deferred Benefits Regulations," ensure compliance with SIS by permitting the payment of deferred benefits under specific conditions, such as when a member ceases current employment at the time of ceasing membership of the scheme. These amendments apply to all persons who ceased to be members of the CSS from 1 July 1995, with the regulations commencing on the same date to avoid any prejudicial effect on the rights of the affected individuals.
Key Provisions
The Superannuation (Deferred Benefits) Regulations (Amendment) 1995 No. 406 amends the Superannuation (Deferred Benefits) Regulations to address specific issues related to the payment of deferred benefits within the Commonwealth Superannuation Scheme (CSS). These amendments were necessitated by changes introduced by the Superannuation Legislation Amendment Act (No. 1) 1995, which inadvertently restricted the payment of deferred benefits to certain CSS members who had reached the minimum retiring age. Specifically, new regulation 4 (paragraphs 2 to 4) has been inserted to alter the interpretation of sections 111A and 138 of the Superannuation Act 1976, ensuring that these sections are read as if the restrictive provisions regarding the payment of deferred benefits were omitted. This amendment restores the right for certain former CSS members to request the payment of their accrued deferred benefits upon reaching the minimum retiring age.
The regulations impose obligations on the CSS Board to ensure compliance with the Superannuation Industry (Supervision) Act 1993 (SIS) and its regulations. They must now allow for the payment of deferred benefits under specific conditions, such as when a member's cessation of membership coincides with the change or cessation of their employment. Additionally, these regulations mandate that the citation of the Principal Regulations be updated to "Superannuation (CSS) Deferred Benefits Regulations," reflecting a recent change in the method of citation for regulations under the 1976 Act. These amendments ensure that the CSS operates within the framework established by SIS and other relevant laws, maintaining the integrity and fairness of the superannuation system.
Failure to comply with the requirements set forth in these regulations may result in civil or criminal consequences. Although the explanatory statement does not explicitly detail specific offences or penalties, breaches of the Superannuation Act 1976 or its regulations can lead to significant penalties. Typically, such breaches may result in fines, imprisonment, or both, depending on the severity of the offence. Given the complexity and regulatory nature of superannuation laws, any non-compliance could potentially attract penalties under the general provisions of the 1976 Act or other related legislation. These consequences underscore the importance of adhering to the regulatory requirements governing the CSS and the payment of deferred benefits.