EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO 62
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976 - SUPERANNUATION (ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing matters that the Act requires or permits to be prescribed, or that are necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
The Act provides a contributory superannuation scheme for Commonwealth employees. Persons eligible to contribute under the Act are referred to in the Act as “eligible employees”.
Sub-section 3(1) of the Act defines the term “eligible employee”. In accordance with paragraph (j) of the definition, the term does not include a person included in a prescribed class of persons. Thus, certain classes of employees may be excluded by regulation from becoming, or remaining, contributors. The classes of persons so excluded are prescribed in the Superannuation (Eligible Employees) Regulations (the Regulations).
Persons appointed as officers or engaged as employees of the Snowy Mountains Engineering Corporation are either required or eligible to be eligible employees for the purposes of the Act because the Corporation is an approved authority for the purposes of the Act. Full-time members of the Board (Directors) of the Corporation may also be eligible employees.
The Corporation introduced a superannuation scheme for its Directors, officers and employees with effect from 1 March 1987. It is intended that the following arrangements apply as a consequence of the introduction of the Corporation superannuation scheme:
(a) those existing Directors, officers and employees of the Corporation who are eligible employees for the purposes of the Act are to have the option of:
(i) remaining eligible employees for the purposes of the Act; or
(ii) ceasing to be eligible employees for the purposes of the Act and becoming members of the Corporation superannuation scheme;
(b) those existing Directors, officers and employees of the Corporation who are not eligible employees for the purposes of the Act are to be excluded from becoming eligible employees while they are Directors, officers or employees of the Corporation; and
(c) persons appointed as Directors or officers, or engaged as employees, of the Corporation in the future are to be excluded from becoming, or remaining, eligible employees for the purposes of the Act while they are Directors, officers or employees of the Corporation,
Groups (b) and (c) are not to include persons:
(i) who are or become Directors, officers or employees of the Corporation while on leave without pay from employment by the Commonwealth or another approved authority for the purposes of the Act;
(ii) who are invalidity pensioners as defined in regulation 3 of the Regulations; or
(iii) to whom Division 2 or 3 of Part IV of the Public Service Act 1922 applies.
The existing paragraphs 4(a) and 4(aa) of the Regulations would operate to exclude from remaining eligible employees those in group (a) above who elect to become members of the Corporation superannuation scheme. Amendment of the Regulations is, however, necessary to exclude those in groups (b) and (c) above from becoming or remaining eligible employees.
The Statutory Rule makes the necessary amendments to the Regulations.
The amendments operate on and from the date of gazettal.
Overview
The Superannuation Act 1976 was enacted to provide a contributory superannuation scheme for Commonwealth employees, addressing the need for a structured retirement savings system for public sector workers. The Act defines “eligible employees” who are entitled to contribute to the scheme, with certain exclusions outlined in the Superannuation (Eligible Employees) Regulations. The purpose of these regulations is to specify classes of employees that may be excluded from eligibility, ensuring the scheme operates effectively within its legislative framework. These regulations are made under the authority of the Governor-General, as per section 168 of the Act. The policy objective is to manage the transition of certain employees from the Commonwealth superannuation scheme to the Snowy Mountains Engineering Corporation's own superannuation scheme, while ensuring those in specific categories, such as leave without pay or invalidity pensioners, remain protected under the appropriate provisions.
Scope and Application
The Superannuation (Eligible Employees) Regulations (Amendment) Statutory Rule 1987 amends the Superannuation (Eligible Employees) Regulations to align with the introduction of a superannuation scheme by the Snowy Mountains Engineering Corporation (SMEC). This amendment applies to persons appointed as officers or engaged as employees of SMEC, as well as full-time members of the Board (Directors) of the Corporation. Specifically, it modifies the eligibility criteria under the Superannuation Act 1976, ensuring that certain classes of SMEC employees are excluded from becoming or remaining eligible employees for the purposes of the Act. This exclusion applies to existing and future employees of SMEC, except for those on leave without pay from employment by the Commonwealth or another approved authority, invalidity pensioners as defined in the Regulations, or those subject to Division 2 or 3 of Part IV of the Public Service Act 1922. The changes take effect from the date of gazettal and are intended to facilitate the transition to the new superannuation scheme while maintaining compliance with the overarching legislative framework.
Key Provisions
The Superannuation (Eligible Employees) Regulations (Amendment) Statutory Rules 1987 No 62 introduces significant changes to the eligibility criteria for employees of the Snowy Mountains Engineering Corporation (the Corporation) under the Superannuation Act 1976 (the Act). The main operative sections of these regulations amend the existing eligibility criteria for what constitutes an "eligible employee" (section 3(1) of the Act) by altering the regulations (Regulations) to exclude certain classes of employees from being eligible under the Act. Specifically, these amendments are outlined in the new paragraphs added to the Regulations, which now exclude certain directors, officers, and employees of the Corporation from becoming or remaining eligible employees. These new provisions are intended to align the Corporation's internal superannuation scheme with the broader requirements of the Act.
The Act imposes certain obligations on the parties it governs, primarily those related to the eligibility criteria for superannuation contributions. Under the new regulations, directors, officers, and employees of the Corporation have specific options and obligations based on their current status and employment conditions. Existing directors, officers, and employees who are currently eligible employees can choose to either remain eligible under the Act or cease being eligible and join the Corporation's superannuation scheme. Those not currently eligible under the Act will remain ineligible if they continue their roles within the Corporation. Furthermore, future directors, officers, and employees of the Corporation will also be ineligible under the Act while employed by the Corporation, with certain exceptions for those on leave without pay from Commonwealth or another approved authority, invalidity pensioners, and those covered by Division 2 or 3 of Part IV of the Public Service Act 1922.
Failure to comply with these regulations may result in civil or criminal consequences, depending on the nature and severity of the breach. The maximum penalties for non-compliance with the Superannuation Act 1976 can include substantial fines and, in severe cases, imprisonment. The precise penalties depend on the specific provisions of the Act that are breached and the circumstances of the offence. These consequences underscore the importance of adhering to the eligibility criteria set forth in the Act and the subsequent Regulations.