Superannuation (Productivity Benefit) (Penalty Interest) Amendment Determination 2002 (No. 1) 2002 No. 135
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 135
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE AND ADMINISTRATION
DETERMINATION UNDER SECTION 4G
SUPERANNUATION (PRODUCTIVITY BENEFIT) (PENALTY INTEREST) AMENDMENT DETERMINATION 2002 (NO. 1)
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides the mechanism by which the Superannuation Guarantee (SG) minimum superannuation contribution is made available to Commonwealth 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 in respect of those employees 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) Act 1993. The contribution rates are set down in the PB Act or in instruments under the PB Act.
Employers are required to pay to the same fund, on a once only basis, any entitlement accrued under the then Superannuation Benefit (Interim Arrangement) Act 1988, in respect of employment with that employer before 1 July 1990.
The employer of an employee who has joined a fund is required to pay penalty interest in respect of any period of delay between the date when an amount should have been paid into a fund and the date when it was paid. Such a payment takes into account the loss of interest since the contributions became payable on behalf of the employee and also penalises the employer for having failed to meet its obligations.
Section 4G of the PB Act provides that the interest fixed under it for the purposes of sections 4E, 4EA and 4F is calculated in a way determined by the Minister. These determinations are included in the Superannuation (Productivity Benefit) Penalty Interest Determination 1995 (the Principal Determination).
Paragraph 4E(b) of the PB Act provides for interest to be paid on the amount accrued as a benefit under section 8A where the amount was not paid into a fund on the day on which the employee became a member of that fund. Interest is payable in respect of the period commencing on the day on which payment should have been made and ending on the day before payment was made.
Section 4EA of the PB Act provides for interest to be paid on the amount accrued as a benefit under section 8A where the amount was not paid on the day on which the employee became a member of the superannuation scheme established under the Superannuation Act 1976 or the Superannuation Act 1990. Interest is payable in respect of the period commencing on the day on which payment should have been made and ending on the day before payment was made.
Paragraph 4F(1)(b) of the PB Act provides for interest to be paid on an instalment of regular contributions under the PB Act which was not paid into a fund on the day on which it was payable (either the employee's pay day or a day agreed between the employer and the fund trustees). Interest is payable in respect of the period commencing on the day on which payment should have been made and ending on the day before the payment was made.
This Determination cited as the Superannuation (Productivity Benefit) (Penalty Interest) Amendment Determination 2002 (No. 1) amends the Principal Determination to provide for interest to be calculated on all amounts which should have been paid on a given day but were not paid on that day in respect of the period of delay. It is based on an interest rate of 8.10 per cent per annum which is 2 per cent per annum higher than the rate used to establish the interest factors used for benefit calculation purposes under the PB Act. The formula to be used to calculate penalty interest during the 2002-2003 financial year is specified in the Determination.
The Determination commences on gazettal.