EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO 97
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
SUPERANNUATION (ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)
The Superannuation Act 1976 (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.
Section 168 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all 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 definition in the Act of the term eligible employee provides that certain classes of persons 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).
Australian Defence Industries Pty. Ltd. was incorporated as a company in the Australian Capital Territory on 21 July 1988. Certain officers and employees of the Department of Defence were transferred to the Company as directors or employees with effect from 25 May 1989. Australian Defence Industries Pty. Ltd. has been prescribed as an approved authority for the purposes of the Act with effect from 25 May 1989 to enable persons compulsorily transferred to employment with the Company to continue to contribute under the Act.
The Company intends to introduce a superannuation scheme to cover its staff. As a consequence it is intended that all other directors and employees of the Company other than those compulsorily transferred to the Company be excluded from becoming, or remaining, eligible employees for the purposes of the Act while they are directors or employees of the Company except where he or she is:
(a) a person who became a director or employee of the Company before the commencement of the Regulations, was an eligible employee immediately before becoming such a director or employee and has not requested in writing before the commencement of the Regulations not to be treated as an eligible employee;
(b) a person who is a director or employee of the Company during a period while on leave without pay from employment by the Commonwealth or an approved authority other than the Company;
(c) a person who was an invalidity pensioner immediately before becoming a director or employee of the Company; and
(d) a person to whom Division 2 or 3 of Part IV of the Public Service Act 1922 applies.
The Regulation amends the Principal Regulations by inserting paragraph 4(zj) to give effect to this intention.
The amendments operate on and from the date of their gazettal.
Overview
The Superannuation (Eligible Employees) Regulations (Amendment) 1990, issued under the authority of the Minister for Finance, addresses the need to refine the eligibility criteria for superannuation contributions among Commonwealth employees by amending the Superannuation Act 1976. This legislation seeks to ensure that only certain categories of employees of Australian Defence Industries Pty. Ltd., a company formed to manage assets and functions previously handled by the Department of Defence, remain eligible for superannuation benefits. The primary purpose of these amendments is to exclude specific classes of employees from the superannuation scheme unless they meet particular conditions, such as being pre-existing eligible employees who did not opt out, being on approved leave, being invalidity pensioners, or being subject to specific provisions of the Public Service Act 1922. These changes were made to align the superannuation contributions with the new employment structure within the company, ensuring that the superannuation scheme effectively caters to the intended employee base.
Scope and Application
The Superannuation Act 1976, which is applicable to Commonwealth employees, establishes a contributory superannuation scheme. Eligible employees, as defined within the Act, are those individuals entitled to contribute under this scheme. Under the authority granted by Section 168 of the Act, the Governor-General can make regulations that detail matters required or permitted by the Act for its implementation. These regulations may exclude certain classes of individuals from becoming or remaining eligible employees, with the specifics prescribed in the Superannuation (Eligible Employees) Regulations. This particular piece of legislation, specifically the Superannuation (Eligible Employees) Regulations (Amendment), targets directors and employees of Australian Defence Industries Pty. Ltd., a company incorporated in the Australian Capital Territory, with specific conditions for their eligibility to participate in the superannuation scheme. The amendments to the Regulations exclude all directors and employees of the company, except those who were eligible employees before transferring to the company and did not opt out in writing, those on leave without pay from Commonwealth or other approved authorities, invalidity pensioners prior to employment with the company, and those covered by Division 2 or 3 of Part IV of the Public Service Act 1922. These amendments take effect from the date of their official publication.
Key Provisions
The Superannuation (Eligible Employees) Regulations (Amendment) introduce specific provisions regarding the eligibility of certain individuals for superannuation contributions under the Superannuation Act 1976 (the Act). These amendments, detailed in Section 168 of the Act, aim to refine the categories of employees who are eligible to contribute to the superannuation scheme. The changes are primarily targeted at employees of Australian Defence Industries Pty. Ltd., an entity incorporated in the Australian Capital Territory. These employees were transferred from the Department of Defence and are to be excluded from superannuation contributions unless they meet specific criteria (Section 168). The primary operative sections of these regulations are designed to exclude certain directors and employees of Australian Defence Industries Pty. Ltd. from superannuation contributions while they are employed by the company, unless they fall into one of the specified exceptions.
The Regulations impose clear obligations on Australian Defence Industries Pty. Ltd. to ensure that only eligible employees as defined by the amended provisions contribute to the superannuation scheme. For instance, directors and employees who were transferred from the Department of Defence are excluded from superannuation contributions unless they were eligible employees before their transfer, have not opted out in writing, are on leave without pay from Commonwealth or other approved authority employment, are invalidity pensioners, or fall under specific provisions of the Public Service Act 1922. These obligations necessitate that the company maintain accurate records of employee eligibility and ensure compliance with the specified conditions to avoid non-compliance with the Act.
Breaches of the regulations could lead to serious consequences. Although the specific offences and penalties are not detailed in the explanatory statement, it is implied that any failure to adhere to the provisions of the Act and the amended Regulations could result in legal repercussions. Typically, such breaches might be subject to civil or criminal penalties as outlined in the Act. The maximum penalties for breaches could include fines or other sanctions as stipulated in the Superannuation Act 1976, depending on the severity and nature of the breach. Ensuring compliance is thus crucial for the company to avoid these potential consequences.