EXPLANATORY STATEMENT

Issued by authority of the Minister for Finance and Deregulation

Superannuation Act 1976

Superannuation (Family Law – Superannuation Act 1976) Amendment Orders 2011 (No. 1)

The Superannuation Act 1976 (the 1976 Act) makes provision for and in relation to the Commonwealth Superannuation Scheme (CSS) for Australian Government employees and for certain other persons.

Part IXB of the 1976 Act makes specific provision for the splitting of a superannuation interest when the trustee of the CSS, the Australian Reward Investment Alliance (ARIA), receives a splitting agreement or splitting order in relation to that interest as a result of actions taken under the Family Law Act 1975 (the Family Law Act).  Part IXB allows for a separate interest to be created in the CSS for the former spouse of a CSS member who has been allocated a part of the member’s interest in the CSS under such a splitting agreement or splitting order.

Subsection 146MH (1) of the 1976 Act provides that the Minister may make Orders prescribing matters required or permitted to be prescribed by Part IXB.  The Superannuation (Family Law – Superannuation Act 1976) Orders 2004 (the Principal Orders) prescribe the matters required or permitted by Part IXB of the Act to be prescribed.

Amending Orders

The purpose of the Superannuation (Family Law – Superannuation Act 1976) Amendment Orders 2011 (No. 1) (the Amending Orders) is to amend the Principal Orders as part of public sector superannuation reforms provided for in the Governance of Australian Government Superannuation Schemes Act 2011.  Background information on the changes and the details of the Amending Orders are set out in the Attachment.

Approval by ARIA

Section 167AB of the Act provides that the Minister may not make Orders under the Act without the agreement of ARIA except in certain limited circumstances.  ARIA has consented to the Amending Orders.

Legislative Instruments Act 2003

The Amending Orders are a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LIA).  Although section 44 of the LIA exempts superannuation instruments from disallowance, the Amending Orders are subject to possible disallowance in accordance with section 146MH of the 1976 Act.

The Amending Orders commence on the commencement of the Governance of Australian Government Superannuation Schemes Act 2011.

ATTACHMENT

BACKGROUND TO AND DETAILS OF THE AMENDING ORDERS

Background

The Amending Orders form part of public sector superannuation reforms.  The package of reforms involves the following:

• the Governance of Australian Government Superannuation Schemes Act 2011 (Governance Act) which merged the Australian Reward Investment Alliance (ARIA), the Military Superannuation and Benefits Board and the Defence Force Retirement and Death Benefits Authority to form a consolidated trustee body;
• the ComSuper Act 2011 which made changes to the governance framework for superannuation administration arrangements for the main civilian and military superannuation schemes; and
• the Superannuation Legislation (Consequential Amendments and Transitional Provisions) Act 2011 (Consequentials Act) which contains the consequential and transitional provisions necessary to facilitate the consolidation and the changes to superannuation administration.

Effect of the Governance Act and consequential amendments

Before the commencement of the Governance Act, ARIA (referred to as ‘the Board’) had certain powers and functions in the Superannuation Act 1976 (1976 Act) and legislative instruments made under that Act.

The Governance Act established the Commonwealth Superannuation Corporation (CSC) as a body corporate with a separate legal identity from the Commonwealth, by continuing in existence the body corporate that was previously called ARIA.

• As a consequence, references to “the Board” in a number of legislative instruments required amendment to refer to “CSC”.

Details of the Amending Orders

Section 1 – Name of Orders

This section provides that the name of the instrument is the Superannuation (Family Law – Superannuation Act 1976) Amendment Orders 2011 (No. 1).

Section 2 – Commencement

This section provides that the Amending Orders commence on the commencement of the Governance Act.

Section 3 – Amendment of the Superannuation (Family Law – Superannuation Act 1976) Orders 2004

This section provides that Schedule 1 of the Amending Orders amends the Superannuation (Family Law – Superannuation Act 1976) Orders 2004 (the Principal Orders).

Schedule 1

Items 1 to 10 amend a range of provisions in the Principal Orders by omitting “the Board” and inserting “CSC”.  The affected provisions are shown below.