EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO 343
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 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 contributors. The classes of persons so excluded are prescribed in the Superannuation (Eligible Employees) Regulations (the Regulations).
Paragraphs 4(a), 4(aa) and 4(o) of the Regulations prescribe as a class of persons those to whom a superannuation scheme or arrangement other than that provided under the Act applies.
Paragraph 4(a) of the Regulations includes in a prescribed class employees of an “approved authority” who are, or are required to become, members of a superannuation scheme applying to employees of that “approved authority”. Paragraph 4(aa) includes in a prescribed class persons who are the holders of a statutory office and who are, or are required to become, members of a superannuation scheme applying to holders of that office. Paragraph 4(o) includes as a prescribed class of persons those persons:-
- who are permanent or temporary employees or the holders of a statutory office,
- who remain members of a superannuation scheme applying to them by reason of some previous employment, and
- in respect of whom the Commonwealth has agreed to pay the employer superannuation liability in respect of benefits payable to or in respect of the person from that scheme.
Cases are arising, however, where persons not included in a class prescribed in paragraph 4(a) or 4(aa) are being provided with superannuation arrangements outside the Superannuation Act 1976 that are not related to their previous employment. Such persons are not included in the class of persons prescribed in paragraph 4(o).
The Statutory Rule would amend paragraph 4(o) to encompass all persons who are members of another superannuation scheme in respect of whom the Commonwealth or an authority or other body by which they are employed has agreed to meet the employer superannuation liability in respect of the person’s membership of that scheme.
The amendments are to come into operation on the date of gazettal.
Overview
The Superannuation (Eligible Employees) Regulations (Amendment) Statutory Rule 1985 was issued under the authority of the Minister for Finance to address a gap in the existing regulatory framework for superannuation eligibility. The Superannuation Act 1976 provides a contributory superannuation scheme for Commonwealth employees, with certain classes of employees excluded from contributing. This exclusion is governed by the Superannuation (Eligible Employees) Regulations, which currently exclude employees who are members of other superannuation schemes. The regulation amendment aims to address situations where employees are provided with superannuation arrangements outside the Superannuation Act 1976 that are not related to their previous employment. By amending the Regulations, the policy objective is to ensure comprehensive coverage of all employees who are members of other superannuation schemes, thereby providing clarity and consistency in the application of superannuation laws.
Scope and Application
The Superannuation Act 1976, as amended, provides for the establishment of a contributory superannuation scheme for Commonwealth employees, defining "eligible employees" as those who are not excluded by regulation from contributing to the scheme. The Superannuation (Eligible Employees) Regulations further detail the categories of employees who may be excluded from this scheme, including those who are members of other superannuation arrangements. The proposed amendment to the regulations, made under section 168 of the Act, seeks to broaden the scope of exclusions to include all individuals who are members of another superannuation scheme where the Commonwealth, or another employing authority or body, agrees to cover the employer's superannuation liability for those members. This amendment ensures that the Act's application is comprehensive, covering all relevant scenarios where the Commonwealth has agreed to meet the employer's superannuation obligations, thereby preventing any gaps in the scheme's coverage. The changes will apply from the date of their gazettal, immediately extending the regulatory framework to encompass the newly specified classes of employees.
Key Provisions
The Superannuation (Eligible Employees) Regulations (Amendment) Statutory Rules 1985 No 343, made under Section 168 of the Superannuation Act 1976, modify the existing regulations to exclude additional classes of employees from eligibility to contribute to the Commonwealth’s superannuation scheme. Specifically, the amendment concerns paragraph 4(o) of the Regulations, which now includes employees who are members of another superannuation scheme, regardless of their previous employment, provided the Commonwealth or the employing authority has agreed to meet the employer superannuation liability for those members. This amendment aims to cover situations where employees are participating in superannuation arrangements outside the Act but are still covered by employer superannuation liabilities.
The amended regulations impose obligations on employers, authorities, and the Commonwealth to ensure that any agreements to meet employer superannuation liabilities are compliant with the new definition of “eligible employees” under the Superannuation Act 1976. Employers and authorities must now verify that employees who participate in alternative superannuation schemes are appropriately excluded from the Commonwealth’s scheme if the conditions outlined in the new paragraph 4(o) are met. The Commonwealth itself is required to review existing agreements and ensure that any financial commitments to meet employer superannuation liabilities are consistent with the updated eligibility criteria.
Breach of the amended regulations may result in civil or criminal consequences for the parties involved. For instance, if an employer fails to correctly identify and exclude eligible employees from the Commonwealth superannuation scheme, they could face penalties under the Superannuation Act 1976. The specific penalties are not detailed in the Explanatory Statement but could include fines or other civil penalties. Furthermore, if the breach involves deliberate or negligent misrepresentation of facts to evade compliance, it could result in criminal charges, with the potential for significant penalties, including imprisonment, depending on the severity of the offence.