Superannuation (Productivity Benefit) (2001-2002 Continuing Contributions) Declaration 2001 2001 No. 166
EXPLANATORY STATEMENT
STATUTORY RULES 2001 No. 166
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE AND ADMINISTRATION
DECLARATION UNDER SECTION 3D
SUPERANNUATION (PRODUCTIVITY BENEFIT) (2001–2002 CONTINUING CONTRIBUTIONS) DECLARATION 2001
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides the mechanism by which the Superannuation Guarantee (SG) minimum superannuation contribution is made for Commonwealth Government employees (and certain other employees) who have no other employer-sponsored superannuation cover. Prior to 1 July 1992, the PB Act provided productivity superannuation to these employees.
Since 1 July 1990, the designated employers of employees covered by the PB Act arrangements have been required to pay periodic contributions based on the salary of the employee to a superannuation fund nominated or approved by the Minister for Finance and Administration. Where the employee is eligible, contributions may be paid to another regulated superannuation fund as defined by the Superannuation Industry Supervision legislation.
The amount to be contributed by an employer is determined from the table in the Schedule to the PB Act. The table is structured so that a proportionately greater benefit is provided to lower paid wage earners. The amount to be contributed is adjusted where the employee is not employed full-time.
This Declaration, made under section 3D of the PB Act and cited as the Superannuation (Productivity Benefit) (2001-2002 Continuing Contributions) Declaration 2001 substitutes a new table in the Schedule to the PB Act in relation to the financial year commencing on 1 July 2001.
The benefits provided under the PB Act comply with the minimum level of employer superannuation support envisaged in the SG legislation. This Declaration ensures that the table of contribution rates for the PB Act takes into account the increase in the threshold above which no additional superannuation contributions are required to satisfy the SG requirements.
Two groups of employees covered by the PB Act do not receive a flat rate superannuation contribution equivalent to 8 per cent of their salaries. These are:
• lower paid wage earners whose weekly rate of salary is less than $169.13, and for whom 8 per cent of weekly salary would be less than their current weekly contribution of $13.53 (these persons will continue to receive their current contribution); and
• employees on salaries in excess of $110,040 per annum who will receive a flat contribution equivalent to 8 per cent of $110,040 (ie $169.29 per week), as required by the SG legislation.
Historically, contribution rates under the PB Act are skewed so that low income earners receive more than the SG minimum rate and higher income earners receive less.
The Declaration commences on gazettal.
Overview
The Superannuation (Productivity Benefit) (2001-2002 Continuing Contributions) Declaration 2001 was enacted to adjust the contribution rates under the Superannuation (Productivity Benefit) Act 1988 to reflect changes in the superannuation guarantee (SG) requirements. This legislation, issued by the authority of the Minister for Finance and Administration, aims to ensure that the superannuation contributions for certain employees align with the minimum support levels prescribed by the SG legislation. The Declaration specifically updates the contribution rates for the financial year starting 1 July 2001, taking into account the increase in the threshold above which no additional superannuation contributions are required. The policy objective is to maintain equitable distribution of benefits, ensuring lower paid wage earners receive proportionately greater benefits while complying with the SG legislation for higher income earners.
Scope and Application
The Superannuation (Productivity Benefit) (2001-2002 Continuing Contributions) Declaration 2001 pertains to the application of the Superannuation (Productivity Benefit) Act 1988, which specifically mandates minimum superannuation contributions for Commonwealth Government employees and certain other employees who lack employer-sponsored superannuation cover. The declaration adjusts the rates for these contributions to align with the financial year beginning 1 July 2001, ensuring that the benefits provided under the PB Act adhere to the minimum level of employer superannuation support required by the Superannuation Guarantee legislation. It is applicable to designated employers who must pay periodic contributions to a superannuation fund approved by the Minister for Finance and Administration. This contribution rate is structured to offer a proportionately greater benefit to lower-paid wage earners, with adjustments made for part-time employment. Notably, this legislation excludes two groups of employees: those earning less than $169.13 per week, who will continue to receive their current contribution, and those earning over $110,040 annually, who will receive a flat contribution equivalent to 8% of $110,040 per week. The Declaration is effective from the date of its gazettal.
Key Provisions
The Superannuation (Productivity Benefit) (2001-2002 Continuing Contributions) Declaration 2001 (section 3D of the Superannuation (Productivity Benefit) Act 1988) outlines the modifications to the contribution rates for the financial year starting on 1 July 2001. This change is primarily intended to adjust the contribution rates according to the new threshold levels set by the Superannuation Guarantee legislation. Specifically, the declaration replaces the existing table in the Schedule of the PB Act with a new one that reflects the updated contribution requirements, ensuring compliance with the minimum employer superannuation support standards.
Employers subject to the PB Act are required to make periodic contributions based on the employee's salary to a superannuation fund approved by the Minister for Finance and Administration. The amount to be contributed is determined by the table found in the Schedule of the PB Act, which is designed to provide a proportionately greater benefit to lower-paid wage earners. For full-time employees, the contribution rate is calculated according to the specified table, while part-time employees receive adjusted contributions based on their hours of work. Employers must ensure that these contributions are made to the designated superannuation fund and comply with the stipulated rates.
Failure to comply with the requirements set out in the PB Act may result in various penalties and consequences. While the specific penalties are not detailed in the explanatory statement, non-compliance with superannuation laws can generally lead to financial penalties, legal action, and reputational damage for the employer. In extreme cases, persistent non-compliance might result in criminal charges being brought against the employer, potentially leading to fines or imprisonment. It is crucial for employers to adhere to the obligations imposed by the Act to avoid these repercussions.
The declaration ensures that employees who fall within certain income brackets receive appropriate superannuation contributions. For instance, lower-paid employees whose weekly salary is below $169.13 will continue to receive their current weekly contribution of $13.53, while employees earning more than $110,040 per annum will receive a flat contribution equivalent to 8 per cent of $110,040, as mandated by the Superannuation Guarantee legislation. This adjustment reflects the intention to provide equitable superannuation benefits across different income levels, ensuring that the PB Act aligns with the broader superannuation framework in Australia.