Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) 1993 No. 347
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 347
Issued by the authority of the Minister for Finance
Superannuation Act 1976
Superannuation (Existing Invalidity Pensioners) Regulations (Amendment)
The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to an occupational superannuation scheme (the CSS) for Commonwealth employees and for certain other persons. The CSS has operated since 1 July 1976, replacing the scheme provided for under the Superannuation Act 1922 (the 1922 Act).
Section 168 of the 1976 Act provides that the Governor-General may make regulations for the purposes of that Act.
Special arrangements apply in relation to persons who were entitled to invalidity pensions under the 1922 Act on 30 June 1976 and who subsequently became members of the CSS. These special arrangements are provided by way of modifications to the 1976 Act contained in the Superannuation (Existing Invalidity Pensioners) Regulations (the Principal Regulations) made under section 180 of the 1976 Act.
The Superannuation Legislation Amendment Act 1992 (the Amending Act) amended the 1976 Act to provide for additional benefits in certain limited circumstances that are required as a result of the Superannuation Guarantee (Administration) Act 1992 and to provide for certain other changes to Commonwealth superannuation schemes.
The amending Regulations amend the Principal Regulations as a consequence of amendments to the 1976 Act by the Amending Act. The amendment contained in the Regulations is outlined in the Attachment.
The Amending Act amended the 1976 Act by inserting a new subsection 168(12) which provides that regulations for the purposes of section 180 made within a period of 12 months after that amendment may be expressed to have taken effect from and including the day on which that amendment was made.
In accordance with subsection 168(12) of the 1976 Act, the amending Regulations are taken to have commenced on 18 December 1992, the date of commencement of that subsection. The retrospectivity will not affect the rights of any person (other than the Commonwealth) in a manner prejudicial to that person, nor will it impose any liability on such a person. The amending Regulations are, therefore, in accord with the Acts Interpretation Act 1901 and do not contravene subsection 48(2) of that Act.
ATTACHMENT
SUPERANNUATION (EXISTING INVALIDITY PENSIONERS) REGULATIONS AMENDMENT)
THE AMENDMENT
The Amending Act made a number of amendments to section 128 of the 1976 Act, which provides for the treatment of transfer values from other superannuation schemes to the CSS. Subsection 128(4) -which provides for the payment, on cessation of CSS membership and in certain circumstances, of an additional lump sum benefit based on the employer component of the transfer value - was amended to provide that the additional lump sum benefit should also include an amount equal to the interest that would have accrued on that amount if it had been paid into the CSS Fund and not the Consolidated Revenue Fund. (Amounts in the CSS Fund accrue interest in accordance with determinations made by the CSS Board of Trustees.)
The Principal Regulations modify the 1976 Act by inserting a new section 130B, which provides for the payment of an additional lump sum benefit in circumstances similar to those under subsection 128(4), except that it relates to transfer values paid in under the 1922 Act.
The regulations amend inserted section 130B to provide that the additional lump sum benefit provided for under those arrangements also includes an interest component. That interest would be calculated from 1 July 1976 or the day the transfer value was paid to the Commonwealth, whichever is the later.
In accordance with subsection 168(12) of the 1976 Act, the amendment is expressed as being taken to have commenced on 18 December 1992.
Overview
The Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) 1993 No. 347 was enacted to address specific issues arising from the transition of invalidity pensioners from the Superannuation Act 1922 to the Superannuation Act 1976. This regulation was issued by the Minister for Finance under the authority of the Superannuation Act 1976. It amends the existing Superannuation (Existing Invalidity Pensioners) Regulations to reflect changes introduced by the Superannuation Legislation Amendment Act 1992. The policy objective of these amendments is to ensure that the benefits provided to existing invalidity pensioners under the new scheme align with those that would have accrued under the previous scheme, including the calculation of interest on transfer values. The regulations are designed to ensure that the rights of pensioners are not adversely affected by the legislative changes, and they provide clarity and certainty regarding the treatment of transfer values and associated benefits.
Scope and Application
The Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) 1993 pertains to the Superannuation Act 1976, which establishes an occupational superannuation scheme, known as the Commonwealth Superannuation Scheme (CSS), for Commonwealth employees and certain other persons. The Act applies to these individuals and entities involved in the CSS, which commenced operation on 1 July 1976, replacing the scheme provided under the Superannuation Act 1922. The amending Regulations introduced by this statutory rule are designed to cater specifically to individuals who were entitled to invalidity pensions under the 1922 Act on 30 June 1976 and subsequently became members of the CSS. The amending Regulations modify the Principal Regulations, which are the original set of regulations made under section 180 of the 1976 Act, to reflect the changes introduced by the Superannuation Legislation Amendment Act 1992. These amendments are intended to align the benefits provided under the CSS with the adjustments mandated by the Superannuation Guarantee (Administration) Act 1992. The Regulations are retroactive to the commencement of the relevant subsection of the 1976 Act, which is 18 December 1992, ensuring that the changes do not adversely affect the rights of any person other than the Commonwealth or impose any new liabilities.
Key Provisions
The Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) 1993 No. 347, made under the Superannuation Act 1976, amend existing regulations to reflect changes introduced by the Superannuation Legislation Amendment Act 1992. These regulations specifically address the treatment of transfer values from other superannuation schemes to the Commonwealth Superannuation Scheme (CSS) and include provisions for an additional lump sum benefit. Section 128 of the 1976 Act, which deals with the treatment of transfer values, is amended to include an interest component in the additional lump sum benefit payable upon cessation of CSS membership and under certain circumstances (section 128(4)). This interest is calculated as if the amount had been invested in the CSS Fund from 1 July 1976 or the date the transfer value was paid to the Commonwealth, whichever is later.
The regulations impose several obligations on the parties involved. Firstly, the CSS must ensure that the additional lump sum benefit, including the interest component, is calculated and paid accurately in accordance with the amended provisions. This involves careful tracking of transfer values and the application of the interest formula as specified. The interest calculation must be based on the rate applicable to the CSS Fund as determined by the CSS Board of Trustees. Secondly, employers and members of the CSS must be informed of these changes and understand how the additional lump sum benefit, including interest, is calculated and when it will be paid. This includes updating relevant documentation and communication channels to ensure transparency and compliance with the new requirements.
Breaches of the provisions outlined in the Superannuation (Existing Invalidity Pensioners) Regulations (Amendment) 1993 No. 347 could result in various consequences. For instance, if the CSS fails to correctly calculate and pay the additional lump sum benefit with the appropriate interest component, it may face legal challenges from affected members. While the explanatory statement does not specify maximum penalties, breaches of superannuation regulations generally can lead to financial penalties, legal actions, or even criminal charges, depending on the severity and intent of the breach. The Commonwealth Superannuation Corporation, which administers the CSS, must ensure strict adherence to these provisions to avoid such consequences.