EXPLANATORY STATEMENT
Issued by authority of the Minister for Finance
Superannuation Act 1976 and the Superannuation Act 1990
Superannuation Legislation (CSS and PSS Membership Eligibility—ASIC Employees) Amendment Declaration 2022
The Superannuation Act 1976 (the 1976 Act) and the Superannuation Act 2005 (the 2005 Act) makes provision for and in relation to the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation Schemes (PSS) respectively for Australian Government employees and for certain other persons.
CSS
Subsection 3(1) of the 1976 Act contains the definition of the term “eligible employee” that describes various classes of persons who are eligible or not eligible to be contributory members of the CSS.
Persons who are “eligible employees” of the CSS under the 1976 Act includes persons who are employed by an “approved authority” (subject to certain other requirements). Under paragraph (a) of the definition of “approved authority” in subsection 3(1) of the 1976 Act, an approved authority includes an entity declared by the responsible Minster to be an approved authority for the purposes of the 1976 Act, being an authority of a kind described by the definition.
A consolidated list of bodies that have been declared by the Minster to be approved authorities for the purpose of the 1976 Act is contained in the Superannuation (CSS) Approved Authority Declaration 1995.
Paragraph (j) of the definition of “eligible employee” enables the Minister, by legislative instrument, to declare a class of persons not to be CSS members. The Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 identifies persons who are not CSS members and the circumstances where certain CSS members cease to be contributory members.
PSS
Persons who are eligible to be a contributing member of the PSS under the 1990 Act include persons employed by an “approved authority”, subject to certain other requirements. Under paragraph (b) of the definition of “approved authority” in section 3 of the 1990 Act, an approved authority includes an authority or other body declared by the responsible Minster to be an approved authority for the purposes of the 1990 Act, being an authority of a kind described by the definition.
A consolidated list of bodies that have been declared by the Minster to be approved authorities for the purpose of the 1990 Act is contained in the Superannuation (PSS) Approved Authority Inclusion Declaration 1995.
Paragraph 6(2)(c) of the 1990 Act enables the Minister to declare a person not to be a PSS member. The Superannuation (PSS) Membership Exclusion Declaration 1995 identifies the persons who are declared not to be PSS members under paragraph 6(2)(c) of the 1990 Act.
The Amending Declaration
The Superannuation (CSS and PSS Membership Eligibility—ASIC Employees) Amendment Declaration 2022 (the Amending Declaration) amends the Superannuation (CSS) Approved Authority Declaration 1995 and the Superannuation (PSS) Approved Authority Inclusion Declaration 1995 to declare ASIC to be an approved authority for the purposes of the CSS and PSS. As a consequence, permanent and temporary employees of ASIC, depending on their circumstances, will be eligible for contributory membership of the CSS or the PSS. Persons employed on a temporary part-time or casual basis are not eligible for contributory membership of the CSS.
The Amending Declaration also amends the Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 and the Superannuation (PSS) Membership Exclusion Declaration 1995 to exclude certain persons from contributory membership of the CSS or the PSS.
Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.
The Amending Declaration and the instruments that it amends, being the Superannuation (CSS) Approved Authority Declaration 1995, Superannuation (PSS) Approved Authority Inclusion Declaration 1995, Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003 and the Superannuation (PSS) Membership Exclusion Declaration 1995, are not subject to sunsetting.
Item 6 of the table in section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015, made under paragraph 54(2)(b) of the Legislation Act 2003, exempts legislative instruments that relate to superannuation, other than regulations, from the sunsetting regime set out under Part 4 of Chapter 3 of that Act. Instruments pertaining to CSS and PSS membership eligibility are intended to have enduring operation and the existence of uncertainty in respect of an individual’s scheme membership would not be appropriate.
The details of the Amending Declaration are at Attachment A.
Legislation Act 2003
The Amending Declaration is a legislative instrument for the purposes of the Legislation Act 2003, and is subject to disallowance in accordance with subsection 3(1BD) of the 1976 Act and subsection 6(8) of the 1990 Act.
Consultation
Section 17 of the Legislation Act 2003 specifies that rule-makers should consult before making legislative instruments. Commonwealth Superannuation Corporation, the corporate trustee of the CSS and PSS, and ASIC have been consulted on the amendments contained in the Amending Declaration.
The Office of Best Practice Regulation (OBPR) was consulted and assessed that the changes are machinery in nature and do not require a Regulation Impact Statement (Reference Number OBPR 21-01189).
Commencement
The Amending Declaration commences on the day after it is registered on the Federal Register of Legislation.
Statement of Compatibility with Human Rights
A Statement of Compatibility with Human Rights is at Attachment B.
ATTACHMENT A
DETAILS OF THE AMENDING DECLARATION
Name
- Section 1 provides that the name of the instrument is the Superannuation Legislation (CSS and PSS Membership Eligibility—ASIC Employees) Amendment Declaration 2022 (Amending Declaration).
Commencement
2. Section 2 provides for commencement of the Amending Declaration (instrument). Item 1 in the table in subsection 2(1) provides for commencement of the instrument on the day after the instrument is registered on the Federal Register of Legislation. The note at the end of the table in subsection 2(1) clarifies that the table relates only to provisions of the instrument as originally made, and will not be amended to deal with any later amendments of the instrument. Subsection 2(2) provides that the information in column 3 of the table is not part of the instrument.
Authority
3. Section 3 identifies the sources of authority for the Amending Declaration (instrument) as:
paragraph (a) of the definition of approved authority in subsection 3(1) of the Superannuation Act 1976;
paragraph (j) of the definition of eligible employee in subsection 3(1) of the Superannuation Act 1976;
paragraph (b) of the definition of approved authority in subsection 3(1) of the Superannuation Act 1990;
paragraph 6(2)(c) of the Superannuation Act 1990.
Schedules
4. Section 4 provides that each instrument specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.
Schedule 1—Amendments
5. Prior to the commencement of the Amending Declaration, ASIC employees’ contributory membership of the CSS and PSS was limited to persons that had been employed by the entity on 1 July 2019 and who had been transferred from being employed by ASIC under the Public Service Act 1999 to being employed directly by ASIC on that date under the Treasury Laws Amendment (Enhancing ASIC’s Capabilities) Act 2018.
6. This arrangement is established by paragraph 4(2)(s) of the Superannuation (CSS) (Eligible Employees—Inclusion) Declaration 2003 (CSS Inclusion Declaration) and section 32 of the Superannuation (PSS) Membership Inclusion Declaration 2006 (PSS Inclusion Declaration). ASIC employees covered by these arrangements will not be impacted by the Amending Declaration.
7. The Minister for Finance has declared ASIC to be an approved authority of the CSS and the PSS. This extends the circumstances in which an ASIC employee can contribute to their existing CSS or PSS benefit account to include persons whose employment commenced on or after 2 July 2019.
8. Particular provisions apply to persons who commenced employment with ASIC between 2 July 2019 and the date that the Amending Declaration commences and who have an existing CSS deferred benefit or a PSS preserved benefit.
9. Prior to the commencement of the Amending Declaration these persons were not eligible for membership of the CSS or the PSS in respect of their ASIC employment. Subsequently, employer-funded superannuation contributions were paid by ASIC to another superannuation scheme in compliance with the requirements of the Superannuation Guarantee (Administration) Act 1992 and any terms and conditions that applied in respect of that employment.
10. The Amending Declaration provides these employees with the choice (by making an election to the trustee of the CSS and PSS, the Commonwealth Superannuation Corporation (CSC)) to re-commence their contributory membership. Without these provisions, it would be mandatory for these employees who are a ‘permanent employee’ of ASIC to cease their existing employer-sponsored superannuation arrangements and recommence their contributory CSS or PSS membership. This is intended to avoid any unexpected consequences that could be detrimental to the employee, such as the loss of any insurance coverage provided through the person’s existing superannuation fund.
11. Items 1, 3, 5, 7 of Schedule 1 identify the source of authority for each of the instruments that are amended by the Amending Declaration.
Superannuation (CSS) Approved Authority Declaration 2005
12. Item 2 inserts ‘Australian Securities and Investments Commission’ in section 4 of the Superannuation (CSS) Approved Authority Declaration 2005. This section sets out the authorities or bodies that are declared, under paragraph (a) of the definition of ‘approved authority’ in subsection 3(1) of the Act, to be an approved authority for the purposes of the 1976 Act.
Superannuation (CSS) (Eligible Employees – Exclusion) Declaration 2003
13. Item 4 amends subsection 7(1) of the CSS (Eligible Employees – Exclusion) Declaration 2003 by adding new paragraph (p) to provide that a person who otherwise would be an ‘eligible employee’ for the purposes of the 1976 Act, is taken not to be an eligible employee if the person:
became employed by ASIC in the period between 2 July 2019 and the day before the Amending Declaration commences; and
is a CSS deferred benefit member; and
the person has not requested, in a form approved by the CSC and given to the CSC, to be treated as an eligible employee.
14. The effect of this item is to provide these employees with the choice to re-commence their contributory membership. Without this item, it would be mandatory for those employees who are a ‘permanent employee’ of ASIC to cease their existing employer-sponsored superannuation arrangements and recommence their contributory CSS membership. This will avoid any unexpected consequences that could be detrimental to the employee, such as the loss of any insurance coverage provided through the person’s existing superannuation fund.
Superannuation (PSS) Approved Authority Inclusion Declaration 1995
15. Item 6 inserts ‘Australian Securities and Investments Commission’ in section 4. This section lists the following authorities and bodies declared, under paragraph (b) of the definition of approved authority in section 3 of the Act, to be an approved authority for the purposes of the 1990 Act.
Superannuation (PSS) Membership Exclusion Declaration 1995
16. Item 8 inserts a new definition of “ASIC” in subsection 3(1). Under the new definition, “ASIC” means the Australian Securities and Investments Commission established by the Australian Securities and Investments Commission Act 1989 and continued in existence by the Australian Securities and Investments Commission Act 2001.
17. Item 9 adds a new paragraph 44 at the end of the Schedule to Superannuation (PSS) Membership Exclusion Declaration 1995 to provide that a person who otherwise would be a PSS member for the purposes of the 1990 Act, is taken not to be a PSS member if the person:
became employed by ASIC in the period between 2 July 2019 and the day before the Amending Declaration commences; and
has a PSS preserved benefit member; and
the person has not requested, in a form approved by the CSC and given to the CSC, to be treated as a PSS member.
18. The effect of this item is to provide these employees with the choice to re-commence their contributory membership. Without this item, it would be mandatory for those employees who are a ‘permanent employee” of ASIC to cease their existing employer-sponsored superannuation arrangements and recommence their contributory PSS membership. This will avoid any unexpected consequences that could be detrimental to the employee, such as the loss of any insurance coverage provided through the person’s existing superannuation fund.
ATTACHMENT B