EXPLANATORY STATEMENT
Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012
Issued by authority of the Minister for Finance and Deregulation
Superannuation (Productivity Benefit) Act 1988
The Superannuation (Productivity Benefit) Act 1988 (Act) prescribes superannuation arrangements for certain Australian Government employees who are not eligible for membership of the Commonwealth superannuation schemes. The PB Act arrangements have been closed to new employees since 1 July 2006.
Under the Act, certain ‘class employees’ who are ‘qualified employees’ are entitled to superannuation contributions made by the Commonwealth, payable to a fund of their choice or, where the member does not elect a fund, to the default fund.
Subsection 4B(1) of the Act allows the Minister for Finance and Deregulation to declare a superannuation fund to be a default fund for superannuation contributions made by the Commonwealth in satisfaction of its obligations under the Act.
The current default fund is the Australian Government Employees Superannuation Trust (AGEST).
From 1 January 2013, AGEST will merge with another superannuation fund, AustralianSuper, and will cease to operate in its own right. Consequently, it is necessary for the Minister to revoke AGEST as the default fund and to declare a new superannuation funds as the default fund, commencing from this date.
This declaration establishes AustralianSuper as the new default fund, commencing 1 January 2013. Prior to commencement, AGEST will continue to be the default fund up to and including 31 December 2012.
The details of the Declaration are explained in Attachment A.
A statement of compatibility with the Human Rights (Parliamentary Scrutiny) Act 2011 is at Attachment B.
Legislative Instruments Act 2003
The Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012 is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LI Act). Although Section 44 of the LI Act exempts superannuation instruments from disallowance, section 9B of the Act provides that the disallowance provision set out in section 42 of the LI Act applies to declarations or determinations that are legislative instruments made under the Act.
No consultation was undertaken in relation to the Declaration. In accordance with paragraph 18(2)(a) of the LI Act, consultation was considered to be unnecessary because the instrument is of a minor or machinery nature.
ATTACHMENT A
DETAILS OF THE Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012
Section 1 – Name of Declaration
This section provides that the name of this Declaration is the Superannuation (Productivity Benefit)(Nominated Fund) Declaration 2012.
Section 2 – Commencement
Section 2 provides for the Declaration to commence on 1 January 2013.
Section 3 – Definition
Section 3 provides that in this Declaration, the Superannuation (Productivity Benefit) Act 1988 may be referred to as the ‘Act’.
Section 4 - Revocation
Section 4 of the Declaration revokes the previous declaration made on 27 June 1990 under subsection 4B(1) of the Act, with effect from the time immediately before the commencement of section 5.
Revoking the previous declaration immediately before the commencement of the new declaration is consistent with subsections 4B(2) and (3) of the Act, which state that the Minister must not to make a new declaration while another such declaration is in force and must ensure that there is a nominated fund at all times.
Section 5 – Nominated Fund
Section 5 declares AustralianSuper to be the nominated default fund under subsection 4B(1) of the Act. AustralianSuper is a ‘complying’ superannuation fund within the meaning of the Income Tax Assessment Act 1997, as is required by section 4D of the Act.
ATTACHMENT B
ATTACHMENT B