Overview

The Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012, issued by the authority of the Minister for Finance and Deregulation, was introduced to address the need for a new default superannuation fund following the merger of the Australian Government Employees Superannuation Trust (AGEST) with AustralianSuper, effective from 1 January 2013. This legislative instrument operates under the Superannuation (Productivity Benefit) Act 1988, which provides for superannuation arrangements for certain Australian Government employees not eligible for Commonwealth superannuation schemes. The Act has been closed to new employees since 1 July 2006, and the declaration ensures continuity in superannuation contributions for those still covered by the provisions of the Act. The policy objective is to maintain the integrity and functionality of the superannuation arrangements for the affected employees by ensuring a seamless transition to the new default fund.

Scope and Application

The Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012 is a legislative instrument issued under the Superannuation (Productivity Benefit) Act 1988. This Act pertains to superannuation arrangements for certain Australian Government employees who are ineligible for Commonwealth superannuation schemes. Specifically, the Act applies to ‘class employees’ who are also ‘qualified employees’, entitling them to superannuation contributions made by the Commonwealth. These contributions are directed to a fund of the member's choice or, if no fund is elected, to the default fund. The Minister for Finance and Deregulation has the authority under subsection 4B(1) of the Act to declare a superannuation fund as the default fund for Commonwealth contributions. The Declaration revokes the former default fund, the Australian Government Employees Superannuation Trust (AGEST), effective from 1 January 2013, when it merges with AustralianSuper, and establishes AustralianSuper as the new default fund. Prior to the commencement date, AGEST continues to operate as the default fund until 31 December 2012. This Declaration, while minor and of a machinery nature, is a legislative instrument under the Legislative Instruments Act 2003 and, despite an exemption for superannuation instruments from disallowance, is subject to the disallowance provisions outlined in section 42 of the same Act.

Key Provisions

The Superannuation (Productivity Benefit) (Nominated Fund) Declaration 2012 (Declaration) is a legislative instrument made under the Superannuation (Productivity Benefit) Act 1988 (Act). The main operative sections of the Declaration are Sections 1 through 5. Section 1 provides the name of the Declaration, Section 2 sets the commencement date as 1 January 2013, Section 3 provides a definition for terms used in the Declaration, Section 4 revokes the previous declaration effective immediately before the new declaration takes effect, and Section 5 declares AustralianSuper as the new nominated default fund under the Act. The Declaration imposes obligations on the Minister for Finance and Deregulation to ensure there is always a nominated default fund under the Act. This is achieved by revoking the previous declaration immediately before the new declaration takes effect, and by declaring AustralianSuper as the new default fund, as required under section 4B(1) of the Act. The Declaration also ensures that AustralianSuper is a complying superannuation fund within the meaning of the Income Tax Assessment Act 1997, as required by section 4D of the Act. The Declaration does not explicitly state any offences, penalties, or consequences for breach. However, it is worth noting that the Superannuation (Productivity Benefit) Act 1988 itself contains provisions for offences and penalties for non-compliance with its requirements. For example, section 4E of the Act imposes a penalty of 10 penalty points for each day a contravention continues, and section 4F imposes a penalty of up to $10,200 for non-compliance with the Act. It is important for those governed by the Act to be aware of these potential penalties and to ensure compliance with the requirements of the Act and the Declaration. The Declaration also states that it is exempt from disallowance under the Legislative Instruments Act 2003, although it is subject to the disallowance provisions set out in section 42 of the Act. This means that while the Declaration cannot be disallowed by Parliament, it is still subject to parliamentary scrutiny and may be subject to review or amendment by Parliament at any time. Finally, the Declaration notes that no consultation was undertaken in relation to its creation, as it was considered to be of a minor or machinery nature under the Legislative Instruments Act 2003.