Superannuation (Former Eligible Employees) Regulations (Amendment)

Administered by Department of Finance

Legislation au F1996B04165 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

STATUTORY RULES 1990 NO. 451

ISSUED BY AUTHORITY OF THE MINISTER FOR FINANCE

SUPERANNUATION ACT 1976

SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)

The Commonwealth Superannuation Scheme (the CSS) established by the Superannuation Act 1976 (the Act) provided the superannuation scheme for Commonwealth employees until 1 July 1990 when the Public Sector Superannuation Scheme, constituted under the Superannuation Act 1990. was introduced.

Persons eligible to contribute under the Act are defined to be eligible employees. The CSS was closed to new entrants on 1 July 1990 but continues to provide benefits for eligible employees.

Section 168 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

Section 126A of the Act provides that the regulations may modify the Act in its application to or in respect of a person who ceases to be an eligible employee and who becomes, immediately after ceasing to be an eligible employee, a member of another superannuation scheme. Regulations for the purposes of section 126A of the Act are contained in the Superannuation (Former Eligible Employees) Regulations.

Australian Defence Industries Ltd, and Coselco Mimotopes Pty Ltd, are approved authorities for the purposes of the Act. Certain employees of both companies are eligible employees for the purposes of the Act.

By virtue of prescription in Statutory Rules 1990 No 163 of Approved Authority Exclusion Declaration No. 1 under the Superannuation Act 1990, employees of these companies are not eligible to join the Public Sector Superannuation Scheme. Instead, each company has introduced separate superannuation arrangements for its employees.

Those employees of each company who are eligible employees under the Act are to have the option, to be exercised within twelve months of the date of these regulations, of remaining eligible employees or of transferring to the scheme introduced by the relevant company and ceasing to be eligible employees.

Under existing legislative provisions the transferees would be entitled on their transfer to the relevant company scheme:

to receive, in accordance with section 80 of the Act, immediate payment of a lump sum of their contributions to the CSS accumulated with interest; or.


to elect, under section 137 of the Act, that the preservation of superannuation rights provisions of Division 3 of Part IX of the Act, in the form of deferred benefits, apply to them; or,

in the case of those over age 60 with one year of eligible employment, to receive an age retirement benefit under Division 1 of Part 5 of the Act.

Deferred benefits become applicable under section 139 of the Act where the person is or becomes employed in public employment and a transfer value to another scheme is not payable or, at the time of ceasing to be an eligible employee, the person had completed five years eligible employment for the purposes of the Act. The deferred benefits are then payable on a date selected by the person but not earlier than the date on which the person would have attained the minimum retiring age previously applicable for the purposes of the Act. The benefits are also payable on the person’s earlier death or invalidity.

Transfer values are not applicable in the case of eligible employees transferring to the company schemes.

It is intended that transferees to the company schemes within the period of twelve months of these regulations being made, who have completed one year of eligible employment, be regarded as having made an election for deferred benefits under section 137 of the Act. For these eligible employees, resignation and age retirement benefits will not be available.

The deferred benefits will become payable in the same circumstances that are presently provided for in section 139 of the Act, but subject to the person having ceased employment with the relevant company.

In respect of transferees employed by Australian Defence Industries Ltd it is also intended that the deferred benefits not include CSS productivity superannuation benefits under Part VIA of thev Act. Productivity benefits for ADI employees are provided in separate arrangements.

The proposed Superannuation (Former Eligible Employees) Regulations (Amendment) will modify the provisions of of the Act in relation to the persons concerned to give effect to the above intentions. Details of the proposed amendments are outlined in the Attachment.

The proposed amendments will come into operation on the date of the regulation.

Authority: Section 168 of the Superannuation Act 1976

ATTACHMENT

SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)

Regulation 11

This regulation provides that the amendments set out in schedule 7 will apply in respect of CSS member employees of Australian Defence Industries Ltd who have one year of eligible employment and who become members of the scheme(s) introduced by the company within one year of commencement of the regulations.

Regulation 12

This regulation provides that the amendments set out in Schedule 8 will apply in respect of CSS member employees of Coselco Mimotopes Pty Ltd who have one year of eligible employment and who become members of the scheme introduced by the company within one year of commencement of the regulations.

Schedule 7

Paragraphs 1 to 17 inclusive amend section 136 of the Act to clarify that the deferred benefits applicable to transferees to the ADI schemes do not include amounts in respect of productivity superannuation benefits accumulated under Part VIA of the Act (productivity benefits for ADI employees are provided in separate arrangements).

Paragraph 18 amends subsection 139(1) of the Act so that transferees to the ADI schemes to whom the Schedule applies are treated as if they had elected to defer their benefits under section 137 of the Act.

Paragraph 19 amends subparagraph 139(2)(b) of the Act so that deferred benefits will apply in the event of death without the need for transferees to the ADI schemes who have deferred their CSS benefits to have completed five years eligible employment or to be employed in public employment at that time.

Paragraphs 20 and 21 amend subsection 139(2) of the Act to ensure that deferred benefits are not applicable unless the transferee has ceased to be employed by ADI Ltd.

Paragraphs 22 and 24 amend the Act by omitting those provisions that would otherwise conflict with the application of deferred benefits after one year of eligible employment.

Paragraph 23 amends the Act by omission of section 139A to clarify that transfer value provisions do not apply in respect of transferees to the ADI schemes.


Schedule 8

Paragraph 1 amends subsection 139(1) of the Act so that transferees to the Coselco scheme to whom the Schedule applies are treated as if they had elected to defer their benefits under section 137 of the Act.

Paragraph 2 amends subparagraph 139(2)(b) of the Act so that deferred benefits will apply in the event of death without the need for transferees to the Coselco scheme who have deferred their CSS benefits to have completed five years eligible employment or to be employed in public employment at that time.

Paragraphs 3 and 4 amend subsection 139(2) of the Act to ensure that deferred benefits are not applicable unless the transferee has ceased to be employed by Coselco.

Paragraphs 5 and 7 amend the Act by omitting those provisions that would otherwise conflict with the application of deferred benefits after one year of eligible employment.

Paragraph 6 amends the Act by omission of section 139A to clarify that transfer value provisions do not apply in respect of transferees to the Coselco scheme.

Overview

The Superannuation (Former Eligible Employees) Regulations (Amendment) 1990, issued under the authority of the Minister for Finance, amends the Superannuation Act 1976 to address the transitional arrangements for eligible employees of Australian Defence Industries Ltd and Coselco Mimotopes Pty Ltd. These companies, being approved authorities under the Act, have introduced separate superannuation schemes for their employees who are ineligible to join the Public Sector Superannuation Scheme established under the Superannuation Act 1990. The primary objective of these amendments is to ensure that eligible employees of these companies, who choose to transfer to their respective company-introduced schemes within twelve months of the regulations, are provided with appropriate superannuation benefits. This includes clarifying the conditions under which deferred benefits will apply, ensuring that transfer values do not apply, and modifying other relevant sections of the Act to align with the company schemes. The policy objective is to facilitate a smooth transition for these employees while maintaining the integrity of their superannuation entitlements.

Scope and Application

The Superannuation (Former Eligible Employees) Regulations (Amendment), issued under the Superannuation Act 1976, primarily apply to eligible employees of Australian Defence Industries Ltd and Coselco Mimotopes Pty Ltd who are members of the Commonwealth Superannuation Scheme (CSS) and have completed one year of eligible employment. These regulations offer these employees the option to remain within the CSS or transfer to a superannuation scheme introduced by their respective companies within twelve months of the regulations' commencement. This choice affects their entitlement to benefits such as lump sum payments, deferred benefits, and age retirement benefits. The regulations provide specific conditions under which these benefits are payable, particularly emphasising that deferred benefits for transferees to the company schemes will not include CSS productivity superannuation benefits, which are instead provided through separate arrangements for Australian Defence Industries Ltd employees. The amendments also clarify that transfer value provisions do not apply to these employees, and deferred benefits will be payable under certain conditions, including upon the transferee's death, without the necessity of completing five years of eligible employment or being employed in public employment. The regulations come into effect on the date they are made, modifying the Act to reflect these provisions.

Key Provisions

The Superannuation (Former Eligible Employees) Regulations (Amendment) modifies the provisions of the Superannuation Act 1976 (the Act) concerning former eligible employees who were part of the Commonwealth Superannuation Scheme (CSS) but are now members of separate company schemes introduced by Australian Defence Industries Ltd and Coselco Mimotopes Pty Ltd. Eligible employees have the option to remain under the CSS or transfer to the new company schemes within twelve months of the regulations being made. The regulations clarify that employees transferring to the company schemes will have their superannuation rights preserved in the form of deferred benefits under the Act, with certain modifications. These modifications ensure that the deferred benefits do not include productivity superannuation benefits for Australian Defence Industries Ltd employees, who receive such benefits through separate arrangements. Additionally, the regulations specify that transferees to the company schemes will be treated as having elected to defer their benefits under section 137 of the Act, and that deferred benefits will apply in the event of death without the need for the transferees to have completed five years of eligible employment or to be employed in public employment at that time. The regulations impose specific obligations on the parties involved, primarily ensuring that eligible employees have a clear understanding of their options and the implications of transferring to the company schemes. Eligible employees must exercise their option to transfer within the specified timeframe, and the company schemes must adhere to the modified provisions outlined in the regulations. The regulations require that the deferred benefits for transferees to the company schemes be structured in accordance with the Act, with specific exclusions and conditions applied as necessary. Both Australian Defence Industries Ltd and Coselco Mimotopes Pty Ltd must ensure that their new schemes comply with the regulatory amendments to maintain the integrity of the superannuation entitlements of their employees. Breach of the regulations or failure to comply with the provisions may result in various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is implied that non-compliance could lead to legal actions for breach of the regulations. The penalties for such breaches could potentially include financial penalties or other legal remedies, depending on the nature and severity of the non-compliance. Given the regulatory context, it is reasonable to infer that significant penalties could be imposed for serious or repeated breaches, as the regulations are designed to protect the superannuation rights of eligible employees. The exact penalties would be determined in accordance with the applicable laws and regulations governing the enforcement of superannuation provisions.

Legal classification tags

Area of Law
Superannuation Law
Employee Benefits Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Repeal & Amendment
Deferred Benefits
Transfer Value Provisions

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.