EXPLANATORY STATEMENT
STATUTORY RULES 1989 NO 306
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)
The Superannuation Act 1976 (the Act) provides for a contributory superannuation scheme, for Commonwealth employees and for certain other persons. 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 matters that the Act requires or permits to be prescribed, for carrying out or giving effect to the Act.
Section 126A of the Act provides that the regulations may make provision for modifying the Act, or a provision of the Act specified in the regulations, in the application of the Act or that provision to or in respect of a person who has ceased, or is to cease, to be an eligible employee and who became, or will become, immediately after ceasing to be an eligible employee, a member of a superannuation scheme other than the scheme constituted under the Act, or to or in respect of a class of such persons. Regulations for the purposes of section 126A are contained in the Superannuation (Former Eligible Employees) Regulations.
Certain staff of AIDC Ltd. are eligible employees for the purposes of the Act. However, AIDC Ltd. also operates separate superannuation schemes for its staff known as The Australian Industry Development Corporation Executive Superannuation Plan (for professional staff) and The Australian Industry Development Corporation Staff Superannuation Plan (for support staff). AIDC Ltd. employees who are eligible employees and who have not attained age 60 are to have the option, to be exercised before 22 December 1989, of remaining eligible employees for the purposes of the Act or ceasing to be eligible employees for the purposes of the Act and becoming members of one of the AIDC Ltd. superannuation schemes.
Those who elect to transfer to the AIDC Ltd. schemes will then have the option of:
(a) receiving, in accordance with section 80 of the Act, immediate payment of a lump sum benefit of the amount of their contributions accumulated with interest; or
(b) electing under section 137 of the Act that the preservation of superannuation rights provisions of Division 3 of Part IX of the Act apply to them.
Where a person makes an election under section 137 of the Act and becomes employed in public employment and a member of a superannuation scheme that is an eligible superannuation scheme for the purposes of the Act, a transfer value is payable to that scheme in respect of the person in accordance with section 138 of the Act. Where a transfer value is not payable, deferred benefits become applicable in respect of the person under section 139 of the Act if the person becomes employed in public employment or had completed 5 years’ eligible employment for the purposes of the Act at the time he or she ceased to be an eligible employee. Deferred benefits become payable under section 139 on a date selected by the person that is not earlier than the date on which the person would have attained the minimum retiring age that would have applied to him or her for the purposes of the Act or on the person’s death or invalidity.
Because the transferees will not be changing employment, they will not become employed in public employment. Transfer values could not therefore become payable and deferred benefits could only become applicable in respect of them where they have completed 5 years’ eligible employment for the purposes of the Act at the time they cease to be eligible employees.
To ensure that adequate preservation benefits are available to the transferees, the Act has been modified to provide that deferred benefits will become applicable in respect of those persons transferring to the AIDC Ltd. schemes on or after 20 November 1989 but before 22 December 1989 who make an election under section 137, where they have completed at least 1 years’ eligible employment for the purposes of the Act at the time they cease to be eligible employees.
The Regulations give effect to this intention. Details of the Regulations are set out in the attachment.
The Regulations commence on 20 November 1989, the first day of the period during which the modifications are to apply.
ATTACHMENT
SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATION (AMENDMENT)
Regulation 1
This provides that the date of commencement of the Regulations is 20 November 1989.
Regulation 2
This provides that the term “Principal Regulations” means the Superannuation (Former Eligible Employees) Regulations.
Regulation 3
This provides for the insertion of a new provision - regulation 7 - in the Principal Regulations which provides that the modifications of the Act specified in Schedule 4 apply in respect of persons to whom section 126A of the Superannuation Act 1976 apply who were, immediately before 20 November 1989, employed by AIDC Ltd. and who elect, before 22 December 1989, to become members of either The Australian Industry Development Corporation Executive Superannuation Plan or The Australian Industry Development Corporation Staff Superannuation Plan.
Schedule 4
Regulation 4
This provides for the insertion of a new Schedule - Schedule 4 - in the Principal Regulations to provide for modifications to the Act in respect of certain employees of AIDC Ltd. The modifications to the Act are as follows:
Subsections 137 (3) and (4) and section 138 - these provisions are omitted as they are made unnecessary by the modifications to section 139 of the Act.
Subsection 139(1) - subsection 139(1) is omitted and a new subsection substituted which provides that where a person referred to in regulation 7 of the Principal Regulations makes an election under section 137 of the Act to preserve his or her superannuation rights, deferred benefits will become applicable to the person if, at the time he or she ceased to be an eligible employee, he or she had completed one year of eligible employment, rather than the usual requirement of 5 years’ eligible employment.
Subsection 139(2) - this is a drafting amendment only.
Paragraph 139(2)(b) - this is a drafting amendment which removes provisions which are rendered unnecessary by the modification to subsection 139(1).
Paragraphs 139(2)(c) and (d) - these provisions which provide that deferred benefits may become payable when a person reaches the age that would have been his or her minimum retiring age or at age 65, are modified by the inclusion of the requirement that the person must have ceased to be employed by AIDC Ltd. before deferred benefits will become payable.
Subsections 139(3), (4), (6) and (7) and section 141 - these provisions are omitted because they are rendered unnecessary by the modification to subsection 139(1).