EXPLANATORY STATEMENT
STATUTORY RULES 1989 NO 16
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUBJECT: SUPERANNUATION ACT 1976 - SUPERANNUATION (FORMER ELIGIBLE EMPLOYEES) REGULATIONS (AMENDMENT)
The Superannuation Act 1976 (the Act) provides for a contributory superannuation scheme, known as the Commonwealth 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, or that are necessary or convenient 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.
Aerospace Technologies of Australia Pty Ltd (ASTA), a Commonwealth-owned company, is an approved authority for the purposes of the Act and certain of its employees are eligible employees for the purposes of the Act. ASTA also operates a separate superannuation scheme for its employees who are not members of the Commonwealth Scheme. ASTA employees who are members of the Commonwealth Scheme and who have not attained age 60 have the option, to be exercised before 1 April 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 the ASTA superannuation scheme.
Those who elect to transfer to the ASTA scheme 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 Commonwealth Scheme contributions accumulated with interest; or
(b) electing under section 137 of the Act that, instead, the preservation of superannuation rights provisions of Division 3 of Part IX of the Act apply to them.
In accordance with the preservation of superannuation rights provisions, where the person makes an election under section 137 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 where the person becomes employed in public employment or where, at the time he or she ceased to be an eligible employee, the person had completed 5 years’ eligible employment for the purposes of the Act. The deferred benefits then 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 earlier death or invalidity.
Because the transferees will not be changing employment, and thus will not “become” employed in public employment, transfer values will not become payable. Also, deferred benefits will 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.
It is intended that deferred benefits become applicable in respect of those transferring on or after 1 March and before 1 April 1989 who make an election under section 137, where they have completed 1 years’ eligible employment for the purposes of the Act at the time they cease to be eligible employees. It is also intended that the deferred benefits become payable to, or in respect of, the person concerned in the same circumstances as presently provided in section 139 of the Act but subject to the person having ceased employment with ASTA.
The Superannuation (Former Eligible Employees) Regulations (Amendment) will modify the provisions of section 139 of the Act in relation to the persons concerned to give effect to those intentions. They also modify the Act by omitting subsections 137(3) and (4) and sections 138, 139A and 141 which are not required in relation to the transferees.
The Regulations come into operation on 1 March 1989.