Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006

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Legislation au C2006A00112 In force Act

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Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006

Act No. 112 of 2006 as amended

This compilation was prepared on 25 October 2006

[This Act was amended by Act No. 51 of 2006]

Amendments from Act No. 51 of 2006

[Schedule 1 (item 64) repealed items 1–14 of Schedule 1

Schedule 1 (item 65) repealed item 25 of Schedule 1

Schedule 1 (items 64 and 65) commenced immediately before 23 October 2006]

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

 

 

 

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Amendments relating to the CSS Board and the PSS Board

Superannuation Act 1976

Superannuation Act 1990

Superannuation Act 2005

Schedule 2—Amendments relating to negative interest rates for the CSS

Superannuation Act 1976

Schedule 3—Validation of certain benefits under the Superannuation Act 1976

 

An Act to amend the law relating to superannuation, and for other purposes

[Assented to 23 October 2006]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day on which this Act receives the Royal Assent.

23 October 2006

2.  Schedule 1

The day on which this Act receives the Royal Assent.

23 October 2006

3.  Schedule 2, items 1 to 25

Either:

(a) if this Act receives the Royal Assent on 1 July in a year—the day on which this Act receives the Royal Assent; or

(b) otherwise—on the 1 July that next follows the day on which this Act receives the Royal Assent.

1 July 2007

(paragraph (b) applies)

4.  Schedule 2, items 26 and 27

Immediately after the provision(s) covered by table item 3.

1 July 2007

5.  Schedule 2, items 28 and 29

Either:

(a) if this Act receives the Royal Assent on 1 July in a year—the day on which this Act receives the Royal Assent; or

(b) otherwise—on the 1 July that next follows the day on which this Act receives the Royal Assent.

1 July 2007

(paragraph (b) applies)

6.  Schedule 3

The day on which this Act receives the Royal Assent.

23 October 2006

Note: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

 (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3  Schedule(s)

  Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


Schedule 1—Amendments relating to the CSS Board and the PSS Board

 

Superannuation Act 1976

15  After paragraph 27Q(1)(a)

Insert:

 (aa) a member of the staff of the Board; or

16  Subparagraph 27Q(3)(a)(ii)

Omit “(1)(b)”, substitute “(1)(aa), (b)”.

17  Paragraph 27Q(3)(c)

Omit “(1)(c)”, substitute “(1)(aa), (c)”.

18  Paragraph 163AB(1)(a)

Omit “the SIS Act”, substitute “any other Act”.

19  At the end of subsection 163AB(3)

Add “unless doing so would breach Chapter 7 of the Corporations Act 2001”.

Superannuation Act 1990

20  After paragraph 28A(1)(a)

Insert:

 (aa) a member of the staff of the Board; or

21  Subparagraph 28A(2)(a)(ii)

Omit “(1)(b)”, substitute “(1)(aa), (b)”.

22  Paragraph 28A(2)(c)

Omit “(1)(c)”, substitute “(1)(aa), (c)”.

23  Subparagraph 42A(1)(a)(ii)

Omit “the SIS Act”, substitute “any other Act”.

24  At the end of subsection 42A(3)

Add “unless doing so would breach Chapter 7 of the Corporations Act 2001”.

Superannuation Act 2005

26  After paragraph 28(1)(a)

Insert:

 (aa) a member of the staff of the Board; or

27  Paragraph 28(2)(b)

Omit “(1)(b)”, substitute “(1)(aa), (b)”.

28  Subsection 28(4)

Omit “(1)(c)”, substitute “(1)(aa), (c)”.


Schedule 2—Amendments relating to negative interest rates for the CSS

 

Superannuation Act 1976

1  Subsection 3(1) (definition of accumulated basic contributions)

Omit “interest that is payable in respect of those contributions”, substitute “interest on those contributions”.

2  Subsection 3(1) (definition of accumulated supplementary contributions)

Omit “interest that is payable in respect of those contributions”, substitute “interest on those contributions”.

3  Subsection 3(1)

Insert:

amount includes a nil amount.

4  Subsection 3(1)

Insert:

interest includes negative or zero interest, and accruing, when used in relation to interest, has a corresponding meaning.

5  Subsection 3(1)

Insert:

notional interest includes negative or zero notional interest.

6  Subsection 3(1)

Insert:

plus has a meaning affected by subsection (9).

7  Subsection 3(1)

Insert:

sum has a meaning affected by subsection (9).

8  Subsection 3(1)

Insert:

total has a meaning affected by subsection (9).

9  At the end of section 3

Add:

 (9) If:

 (a) a provision of this Act involves the calculation of a sum (whether the expression “sum”, “total”, “plus” or any other expression is used); and

 (b) the calculation involves negative interest or negative notional interest; and

 (c) apart from this subsection, the sum would be less than zero;

the sum is taken to be zero.

10  Subsection 7A(1)

Omit “together with the amount of any interest that is payable in respect of the amount”, substitute “plus interest on the amount”.

11  Paragraphs 7A(2)(d), (e) and (f)

Omit “together with the amount of any interest that is payable in respect of the amount”, substitute “plus interest on the amount”.

12  Subsections 7A(3) and (4)

Omit “together with the amount of any interest that is payable in respect of the amount”, substitute “plus interest on the amount”.

13  Subsection 62B(4) (definition of GBB)

Omit “together with”, substitute “plus”.

14  Subsection 110SE(4) (definition of GBB)

Omit “together with”, substitute “plus”.

15  Subparagraph 145(7)(d)(i)

Omit “interest that is payable in respect of that excess”, substitute “interest on that excess”.

16  After subsection 145(7)

Insert:

 (7A) An amount paid under subparagraph (7)(d)(i) in respect of a particular excess must not be less than the amount of the excess.

17  Subparagraph 145(8)(a)(i)

After “equal to the amount”, insert “(the principal amount)”.

18  Subparagraph 145(8)(a)(i)

Omit “interest that is payable in respect of that amount”, substitute “interest on the principal amount”.

19  After subsection 145(8)

Insert:

 (8A) An amount paid into the Superannuation Fund under subparagraph (8)(a)(i) in respect of a particular principal amount must not be less than the principal amount.

20  Subparagraph 145(9)(a)(i)

After “equal to the amount”, insert “(the principal amount)”.

21  Subparagraph 145(9)(a)(i)

Omit “interest that is payable in respect of that amount”, substitute “interest on the principal amount”.

22  After subsection 145(9)

Insert:

 (9A) An amount paid into the Superannuation Fund under subparagraph (9)(a)(i) in respect of a particular principal amount must not be less than the principal amount.

23  Paragraph 146MC(1)(a)

Omit “together with”, substitute “plus”.

24  Subsection 154A(1)

Omit “interest is payable in respect of an amount, the interest must be calculated, and is payable,”, substitute “interest is to be calculated on an amount, that interest must be calculated”.

25  Section 156A

Before “If:”, insert “(1)”.

26  Subsection 156A(1)

Omit “interest in respect of the amount”, substitute “interest on the amount”.

27  At the end of section 156A

Add:

 (2) An amount paid under subsection (1) in respect of a particular paragraph (1)(a) amount must not be less than the paragraph (1)(a) amount.

28  Transitional—subsections 154A(1) and (1A) of the Superannuation Act 1976

The amendments made by this Schedule do not affect the continuity of any determination made under subsection 154A(1) or (1A) of the Superannuation Act 1976 before the commencement of this item.

29  Transitional—zero interest

To avoid doubt, the amendments made by this Schedule do not imply that:

 (a) zero interest could not have been determined under subsection 154A(1) of the Superannuation Act 1976 before the commencement of this item; or

 (b) zero notional interest could not have been determined under subsection 154A(1A) of the Superannuation Act 1976 before the commencement of this item.


Schedule 3—Validation of certain benefits under the Superannuation Act 1976

 

1  Validation of certain pensions

Scope

(1) This item applies if:

 (a) during the period:

 (i) beginning on 1 July 1995; and

 (ii) ending immediately before the commencement of this item;

  a pension commenced to be paid to a person; and

 (b) throughout a period (the interim period):

 (i) beginning when the pension commenced to be paid to the person; and

 (ii) ending at or before the commencement of this item;

  the following conditions were satisfied:

 (iii) the pension purported to be a benefit, or a part of a benefit, payable to the person under the Superannuation Act 1976;

 (iv) the pension was not payable;

 (v) the pension breached section 111A of the Superannuation Act 1976 (whether or not it also breached anything else).

Recovery of overpayment

(2) The total amount of the pension paid to the person during the interim period:

 (a) is a debt due and payable to the Board; and

 (b) may be recovered by the Board in a court of competent jurisdiction.

(3) An amount recoverable under subitem (2) is not recoverable under subsection 156(4) or (5) of the Superannuation Act 1976.

Substitute payment

(4) There is payable to the person a benefit equal to the total amount of pension that would have been payable to the person during the interim period if the pension had not breached whichever of the following provisions is or are applicable:

 (a) section 111A of the Superannuation Act 1976;

 (b) section 110TB of the Superannuation Act 1976;

 (c) the Superannuation Industry (Supervision) Act 1993;

 (d) the Superannuation (CSS) Former Eligible Employees Regulations.

Set‑off

(5) The amount payable by the person under subitem (2) may be recovered by deduction from the amount payable to the person under subitem (4).

Payments do not breach section 111A of the Superannuation Act 1976 etc.

(6) The payment under subitem (4) is taken not to breach any of the following provisions:

 (a) section 111A of the Superannuation Act 1976;

 (b) section 110TB of the Superannuation Act 1976;

 (c) the Superannuation Industry (Supervision) Act 1993;

 (d) the Superannuation (CSS) Former Eligible Employees Regulations.

(7) If the interim period ended at the commencement of this item, the continuing payment of the pension after the commencement of this item is taken not to breach any of the following provisions:

 (a) section 111A of the Superannuation Act 1976;

 (b) section 110TB of the Superannuation Act 1976;

 (c) the Superannuation Industry (Supervision) Act 1993;

 (d) the Superannuation (CSS) Former Eligible Employees Regulations.

(8) If:

 (a) the interim period ended before the commencement of this item; and

 (b) before the commencement of this item, the person became entitled to periodic payments under section 33 of the Financial Management and Accountability Act 1997 in substitution for the pension;

the payment of the pension after the commencement of this item is taken not to breach any of the following provisions:

 (c) section 111A of the Superannuation Act 1976;

 (d) section 110TB of the Superannuation Act 1976;

 (e) the Superannuation Industry (Supervision) Act 1993;

 (f) the Superannuation (CSS) Former Eligible Employees Regulations.

Substitute payment taken to be a payment of pension

(9) The payment under subitem (4) is taken to be a payment of pension payable under the Superannuation Act 1976.

2  Validation of certain lump sums

Scope

(1) This item applies if:

 (a) during the period:

 (i) beginning on 1 July 1995; and

 (ii) ending immediately before the commencement of this item;

  a lump sum was paid to a person; and

 (b) the lump sum purported to be a benefit, or a part of a benefit, payable to the person under the Superannuation Act 1976; and

 (c) the lump sum was not payable; and

 (d) the lump sum breached section 111A of the Superannuation Act 1976 (whether or not it also breached anything else).

Recovery of overpayment

(2) The amount of the lump sum:

 (a) is a debt due and payable to the Board; and

 (b) may be recovered by the Board in a court of competent jurisdiction.

(3) An amount recoverable under subitem (2) is not recoverable under subsection 156(4) or (5) of the Superannuation Act 1976.

Substitute payment

(4) There is payable to the person a benefit equal to the lump sum that would have been payable to the person if the lump sum had not breached whichever of the following provisions is or are applicable:

 (a) section 111A of the Superannuation Act 1976;

 (b) section 110TB of the Superannuation Act 1976;

 (c) section 139AA of the Superannuation Act 1976;

 (d) the Superannuation Industry (Supervision) Act 1993;

 (e) the Superannuation (CSS) Former Eligible Employees Regulations.

Set‑off

(5) The amount payable by the person under subitem (2) may be recovered by deduction from the amount payable to the person under subitem (4).

Payment does not breach section 111A of the Superannuation Act 1976 etc.

(6) The payment under subitem (4) is taken not to breach any of the following provisions:

 (a) section 111A of the Superannuation Act 1976;

 (b) section 110TB of the Superannuation Act 1976;

 (c) section 139AA of the Superannuation Act 1976;

 (d) the Superannuation Industry (Supervision) Act 1993;

 (e) the Superannuation (CSS) Former Eligible Employees Regulations.

Substitute payment taken to be a benefit under the Superannuation Act 1976

(7) The payment under subitem (4) is taken to be a benefit payable under the Superannuation Act 1976.

 

Overview

The Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006 was enacted to address certain issues and gaps within the existing superannuation framework. This Act, assented to on 23 October 2006 by the Parliament of Australia, aims to enhance the safety and integrity of superannuation funds. It achieves this through amendments to various superannuation-related Acts, including the Superannuation Act 1976, the Superannuation Act 1990, and the Superannuation Act 2005. The overarching policy objective of this Act is to ensure the financial security and proper administration of superannuation benefits, including measures to deal with negative interest rates and the validation of certain benefits that were previously paid in error. The Act includes provisions for the amendment of negative interest rate calculations, ensuring that sums cannot be less than zero, and it also provides mechanisms for the recovery of overpayments and the validation of certain pensions and lump sums that were paid in breach of specific sections of the Superannuation Act 1976.

Scope and Application

The Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006 applies to various aspects of superannuation regulation in Australia, primarily amending the Superannuation Act 1976, the Superannuation Act 1990, and the Superannuation Act 2005. The Act affects entities such as the Commonwealth Superannuation Corporation (CSC) Board and the Public Sector Superannuation (PSS) Board, addressing the roles and responsibilities of their staff members. Additionally, the Act introduces amendments concerning negative interest rates applicable to the Commonwealth Superannuation Scheme (CSS) and validates certain superannuation benefits that were improperly paid between 1 July 1995 and the commencement of the Act. This legislation operates on a Commonwealth level, impacting superannuation funds and trustees across Australia. The Act includes specific commencement dates for different provisions, with some effective immediately upon receiving Royal Assent on 23 October 2006 and others on 1 July 2007. The amendments do not extend to subordinate instruments unless specified, and certain transitional provisions ensure continuity in existing determinations and interpretations.

Key Provisions

The Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006 (Act) amends the Superannuation Act 1976, the Superannuation Act 1990, and the Superannuation Act 2005 to enhance the safety of superannuation benefits, particularly in relation to the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation Scheme (PSS). The key operative sections of the Act involve amendments to the definitions and calculations related to superannuation benefits, including adjustments to account for negative or zero interest rates (sections 1–9, 15–28). These amendments ensure that calculations involving negative interest rates do not result in sums that are less than zero, and they clarify that interest includes negative or zero interest, and that interest on certain amounts must not be less than the principal amount. The Act imposes obligations on entities involved in superannuation, such as the CSS Board and the PSS Board, to ensure they adhere to the updated definitions and calculations. For example, these Boards must now include staff members in certain definitions and ensure that any interest calculations take into account negative or zero interest rates. Additionally, the Act imposes a requirement on these entities to avoid actions that would breach Chapter 7 of the Corporations Act 2001. There are specific offences, penalties, and consequences for breach of the Act. While the Act does not explicitly outline penalties, breaches of superannuation laws generally may result in civil or criminal penalties. Civil penalties can include financial penalties, compensation, and corrective orders, while criminal penalties can include fines and imprisonment, depending on the severity and intent of the breach. The precise penalties would be determined in accordance with the relevant sections of the Superannuation Act 1976 and other applicable legislation. The Act also provides for the recovery of overpayments made during the interim period when pensions or lump sums were paid in breach of the Superannuation Act 1976. These overpayments are considered debts due and payable to the Board and can be recovered in a court of competent jurisdiction.

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Area of Law
Superannuation Law
Instrument
Act
Concepts
Commencement Provisions
Repeal & Amendment
Transitional Provisions
Civil Penalty Provisions
Enforcement Powers
Reporting & Disclosure Obligations

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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.