Superannuation Industry (Supervision) Regulations (Amendment) 1996 No. 122
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 122
Issued by the authority of the Treasurer
Superannuation Industry (Supervision) Act 1993
Superannuation Industry (Supervision) Regulations (Amendment)
The Superannuation Industry (Supervision) Act 1993 (the Act) and the Superannuation Industry (Supervision) Regulations (the Principal Regulations) provide for the prudent management of certain superannuation funds. approved deposit funds and pooled superannuation trusts and for their supervision by the Insurance and Superannuation Commissioner.
Section 353 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.
The regulations add a number of public sector superannuation schemes to Schedule 1AA of the Principal Regulations. Schedule 1AA. lists public sector superannuation schemes that are exempt public sector superannuation schemes for the purposes of the Act and Principal Regulations during the 1994/95 and 1995/96 years of income of those schemes. The Regulations rename this list as Part 1 of Schedule 1AA.
The regulations also amend the Principal Regulations to provide for a new Part to Schedule 1AA, called Part 2, which lists schemes that are exempt public sector superannuation schemes for the purposes of the Act and Principal Regulations, from the commencement of the 1996/97 year of income of those schemes.
By way of background, the Commonwealth Government and the Governments of each State and Territory have entered into a Heads of Government Agreement (the Agreement) under which the Commonwealth Government undertakes to take all necessary steps to prescribe public sector schemes, nominated by State Governments and Territory Governments, as exempt from the requirements of the Act. The State Governments and Territory Governments have undertaken to ensure that members' accrued benefits in these schemes are fully protected and that the schemes conform with the principles of the Commonwealth's retirement incomes policy. The Agreement recognises that these public sector superannuation schemes are already subject to State and Territory Government supervision. The Act provides for regulations to be made specifying certain schemes as 'exempt public sector superannuation schemes'.
The process of settling the Agreement commenced in 1994 and was only recently finalised. During that process, and at a stage when the content of the Agreement was settled at official's level and awaiting ministerial endorsement, the Commonwealth Government arranged for the prescription, as exempt public sector superannuation schemes, of schemes nominated by State Governments and Territory Governments, and certain Commonwealth Government schemes with similar characteristics. This enables these schemes to take advantage of concessional tax treatment and to take pan in the superannuation guarantee arrangements. The schemes were prescribed in Schedule 1AA as exempt public sector superannuation schemes from when the Act commenced to affect them, ie from the commencement of their 1994/95 year of income. to the end of their 1995/96 year of income. by which time it was expected that the Agreement would be in place.
The Heads of Government Agreement has now been signed on behalf of all Governments. All Governments have nominated the schemes that they wish to be exempt public sector schemes from the commencement of the 1996/97 year of income of those schemes, and these are now listed in Pan 2 of Schedule 1AA.
During the process of nomination. the New South Wales Government realised that several of its schemes should have been prescribed as being exempt during their 1994/95 and 1995/96 yews of income but were not included in the previous Schedule 1AA. The regulations add these schemes to Part 1 of Schedule 1AA. This is a prescription for a period prior to the commencement of the regulations. but is justified because without such prescription these schemes, during those years, are unable to take advantage of concessional taxation or accept contributions and pay benefits under the superannuation guarantee arrangements, with consequent seriously detrimental effects for members and serious administrative problems for the schemes.
The regulations are described in detail in the Attachment.
The regulations commence on gazettal.
ATTACHMENT
Superannuation Industry (Supervision) Regulations (Amendment)
Regulation 1 - Amendment
Regulation 1 provides that the Superannuation Industry (Supervision) Regulations (the Principal Regulations) are amended as set out in these regulations.
The regulations will commence on gazettal.
Regulation 2 - Regulation 1.04 (Section 10 of the Act - prescribed matters)
Subregulation 1.04(4C) of the Principal Regulations allows for exempt public sector superannuation schemes (EPSSS) to be prescribed in respect of their 1994/95 and 1995/96 years of income.
Regulation 2 amends subregulation 1.04(4C) by providing that the schemes prescribed as EPSSS in respect of their 1994/95 and 1995/96 years of income are specified in Part 1 of Schedule 1AA.
Subregulation 1.04(4D) is inserted by Regulation 2. It provides that EPSSS prescribed in respect of their 1996/97 year of income and subsequent years of income are specified in Part 2 of Schedule 1AA.
Regulation 3 - Schedule 1AA
Regulation 3 creates Part 1 of Schedule 1AA and inserts additional Acts under the heading 'New South Wales'. The schemes established by or under these additional Acts are prescribed as EPSSS in relation to their 1994/95 and 1995/96 years of income.
Regulation 3 also inserts Part 2 of Schedule 1AA.