EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 62
Superannuation Guarantee (Administration) Act 1992
Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1)
Section 80 of the Superannuation Guarantee (Administration) Act 1992 (the SG Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004 (the Choice of Funds Act) amended the SG Act to provide that most employees would now be able to choose the fund into which their employer makes compulsory superannuation contributions. However, subsection 32C(9) of the SG Act provides that a contribution provided under a Commonwealth, State or Territory law that has been prescribed under regulations is taken to satisfy the choice of fund requirements.
The effect of this is that certain public sector superannuation schemes are exempt from the choice of funds regime.
Regulation 9B of the Superannuation Guarantee (Administration) Regulations 1993 prescribes these Commonwealth and State laws.
The Regulations prescribe an additional State law under which contributions are taken to satisfy the choice of fund requirements. These amendments were requested by the Tasmanian Government. No further consultation has been undertaken.
Details of the Regulations are set out in the Attachment.
The SG Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
Details of the proposed Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1)
Regulation 1 — Name of Regulations
This regulation provides that the title of the regulations is the Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1).
Regulation 2 — Commencement
This regulation provides that the commencement date for the Regulations will be the day after they are registered.
Regulation 3 — Amendment of Superannuation Guarantee (Administration) Regulations 1993
This regulation provides that Schedule 1 amends the Superannuation Guarantee (Administration) Regulations 1993 (the Principal Regulations).
Schedule 1
Subsection 32C(9) of the Superannuation Guarantee (Administration) Act 1992 provides that contributions to a fund are made in compliance with the Act if the contributions are made under a law of the Commonwealth, of a State or of a Territory, as prescribed in the Regulations.
Regulation 9B of the Principal Regulations prescribes, for the purposes of subsection 32C(9), the laws mentioned in Schedule 2 to the Regulations, with effect from 1 July 2005. Schedule 2 lists the relevant laws.
The amendment included the Retirement Benefits (State Fire Commission Superannuation Scheme) Act 2005 (the new Act) in the table of prescribed Tasmanian legislation (Schedule 2, Table 7). This will facilitate the transfer of the operation of the State Fire Commission Superannuation Scheme from the State Fire Commission Superannuation Scheme Act 1994 to the new Act. The expected commencement date of the new Act is 31 March 2006.
Overview
The Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1) were enacted to address a gap in the existing superannuation legislation concerning the choice of superannuation funds for employees. This legislative instrument amends the Superannuation Guarantee (Administration) Regulations 1993, which were themselves made under the Superannuation Guarantee (Administration) Act 1992. The primary aim of these amendments is to ensure that certain public sector superannuation schemes remain exempt from the choice of funds regime introduced by the Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004. Specifically, the regulations prescribe additional state laws under which contributions are considered to meet the choice of fund requirements, thereby clarifying the application of the superannuation guarantee provisions to these schemes. This legislative action was taken at the request of the Tasmanian Government and does not require further consultation as per the legislative framework.
Scope and Application
The Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1) amends the Superannuation Guarantee (Administration) Regulations 1993 to incorporate additional Tasmanian legislation into the prescribed laws under which contributions are taken to satisfy the choice of fund requirements. This legislative instrument applies to employers and employees within the scope of the Superannuation Guarantee (Administration) Act 1992, particularly those affected by the choice of funds regime. The Regulations extend to all jurisdictions within Australia, as they are made under the authority of the Commonwealth. However, they specifically address the inclusion of Tasmanian laws to ensure compliance with state-based superannuation schemes. The Regulations do not set any specific thresholds or exclusions; rather, they operate to align certain state laws with the choice of funds requirements stipulated by the Superannuation Guarantee (Administration) Act 1992. The application of these Regulations is further refined and potentially extended through subordinate instruments, which may provide additional detail or clarification on the implementation of the prescribed laws.
Key Provisions
The Superannuation Guarantee (Administration) Amendment Regulations 2006 (No. 1) amends the Superannuation Guarantee (Administration) Regulations 1993 to include a new entry in Schedule 2 (Regulation 3). This amendment adds the Retirement Benefits (State Fire Commission Superannuation Scheme) Act 2005 to the list of prescribed Tasmanian legislation under subsection 32C(9) of the Superannuation Guarantee (Administration) Act 1992 (SG Act). This addition means that contributions made under this new Act will be considered as complying with the choice of fund requirements, ensuring that they satisfy the necessary legal framework for superannuation contributions. The inclusion of this Act facilitates the transition of the State Fire Commission Superannuation Scheme’s operations from the State Fire Commission Superannuation Scheme Act 1994 to the new Act, which is expected to commence on 31 March 2006.
These regulations impose specific obligations on employers and superannuation funds. Employers must ensure that any superannuation contributions they make are compliant with the laws prescribed under the regulations. This includes verifying that contributions are made in accordance with the Retirement Benefits (State Fire Commission Superannuation Scheme) Act 2005 if they pertain to the State Fire Commission Superannuation Scheme. Superannuation funds, on the other hand, must be prepared to accept contributions that comply with the prescribed laws, ensuring that they are processed correctly and that members’ accounts are updated accordingly. These obligations are crucial for maintaining the integrity and effectiveness of the superannuation system.
The SG Act does not explicitly outline specific offences or penalties for non-compliance with the regulations. However, non-compliance with superannuation laws generally can result in significant civil and criminal penalties. For instance, employers who fail to make the required superannuation contributions may face penalties under the SG Act, which can include fines and even imprisonment in severe cases. Additionally, superannuation funds that do not adhere to the regulations may be subject to penalties, including fines and other administrative actions that can impact their operations and reputation. It is important for all parties involved to understand and comply with these regulations to avoid potential legal repercussions.