Superannuation (Productivity Benefit) (Qualified Employees and Alternative Arrangements) Declaration No. 2 1994 No. 304
EXPLANATORY STATEMENT
STATUTORY RULES 1994 No. 304
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
DECLARATION UNDER SUBSECTIONS 3F(1), 4A (1) AND (2)
PERFORMANCE PAY SUPERANNUATION ARRANGEMENTS FOR OFFICERS OF THE AUSTRALIAN DEFENCE FORCE
The Superannuation (Productivity Benefit) Act 1988 (the Act) provides the mechanism by which the minimum level employer-sponsored superannuation contribution is made available to Commonwealth sector employees who have no other employer-sponsored superannuation coverage, as well as for APS staff who elect who elect to participate in the performance based pay (PBP) superannuation arrangements.
The designated employers of such employees are required to pay to either the superannuation fund nominated by the Minister for Finance or a fund approved by the Minister periodic contributions based on the salary of the employee as well as a once only payment of entitlements accrued under the Act in respect of service prior to the date when the employees join the fund.
Subsection 3F(1) of the Act allows the Minister to declare that a specified class of persons is a class of persons who are qualified employees.
Subsection 4A(1) of the Act allows the Minister to declare that a group of employees who come within the ambit of the Act (qualified employees) is a specified class of employees to which the normal provisions of the Act relating to fund membership and benefit accrual do not apply.
Subsection 4(A)2 of the Act allows the Minister to specify that particular superannuation arrangements apply to declared classes of qualified employees.
This Declaration provides that qualified employees (in this Declaration being certain senior full-time serving officers of the Australian Defence Force) who are entitled to receive performance pay are a class of employees (members) who may elect to have performance pay taken into account for superannuation purposes. If members wish to do so they must elect by written notice; if no election is made, superannuation is not provided. The Declaration provides that the superannuation payments of members who make such an election must be made to a fund approved under the Act.
Members who receive performance pay in respect of the financial year 1993-94 and who wish to take the superannuation option must elect to do so within 3 months of receiving that performance pay. Members receiving performance pay after that date must make an election before the performance pay is paid.
If a member makes an election, his or her designated employer must pay 5 per cent of the member's performance pay, together with an amount additional to the performance pay and equal to 15 per cent of the performance pay to an approved fund.
The PBP superannuation arrangement made for ADF officers in this Declaration mirrors the arrangement which has been provided for APS officers under a similar Declaration.
The declaration takes effect from 3 June 1994. The retrospective effect of this declaration does not affect in a prejudicial manner the rights of any person other than the Commonwealth.
Overview
The Superannuation (Productivity Benefit) Act 1988 was enacted to ensure that Commonwealth sector employees, including those in the Australian Public Service (APS) and Australian Defence Force (ADF) who do not have other employer-sponsored superannuation coverage, receive a minimum level of superannuation contributions. This Act addresses the gap in superannuation coverage for these employees and provides a framework for the mandatory contributions by designated employers. The policy objective is to offer a safety net for employees in the public sector, ensuring their retirement security is maintained through these contributions. The Declaration under Subsections 3F(1), 4A(1) and (2) made in 1994, issued by the authority of the Minister for Finance, extends the superannuation arrangements to include performance pay for certain senior officers in the ADF, mirroring the provisions already in place for APS officers. This ensures that eligible ADF officers can elect to include their performance pay in their superannuation arrangements, thereby enhancing their retirement benefits.
Scope and Application
The Superannuation (Productivity Benefit) (Qualified Employees and Alternative Arrangements) Declaration No. 2 1994 No. 304 applies to certain senior full-time serving officers of the Australian Defence Force (ADF) who are entitled to receive performance pay. The Act extends to these ADF officers by allowing them to elect to have their performance pay taken into account for superannuation purposes, provided they make a written notice of their election. If no election is made, superannuation is not provided for these officers. The Minister for Finance is authorised to specify that particular superannuation arrangements apply to declared classes of qualified employees, and in this case, the superannuation payments of members who make such an election must be made to a fund approved under the Act. The declaration also allows for retrospective application, provided it does not prejudicially affect the rights of any person other than the Commonwealth. This Declaration extends the application of the Superannuation (Productivity Benefit) Act 1988 to a specified class of employees within the Commonwealth sector, ensuring that these ADF officers have the option to include their performance pay in their superannuation arrangements.
Key Provisions
The Superannuation (Productivity Benefit) (Qualified Employees and Alternative Arrangements) Declaration No. 2 1994 No. 304, under the Superannuation (Productivity Benefit) Act 1988, establishes specific provisions for the superannuation contributions of certain senior officers within the Australian Defence Force (ADF). Section 3F(1) of the Act allows the Minister to declare a class of persons as qualified employees, while Section 4A(1) allows the Minister to specify that certain groups of employees do not need to follow the Act's normal provisions for fund membership and benefit accrual. Section 4A(2) enables the Minister to specify particular superannuation arrangements for these qualified employees.
The primary requirement of this Declaration, as outlined in the Act, is that designated employers must make periodic contributions to an approved superannuation fund on behalf of qualified employees, based on the employees' salaries. These employers must also make a one-off payment for any entitlements accrued under the Act prior to the employees joining the fund. For ADF officers who are entitled to performance pay, the Declaration stipulates that they can elect to have this pay considered for superannuation purposes. This election must be made in writing, and if no election is made, no superannuation benefits are provided. Employers are required to make the specified contributions to the approved fund, which includes a 5% contribution of the performance pay plus an additional 15% of the performance pay.
The Act imposes several obligations on the parties involved. Qualified employees must make a written election to have their performance pay included in their superannuation arrangements. Employers must ensure that the contributions are made to an approved fund within the specified timeframes. The Act also requires employers to make the necessary calculations and payments to the superannuation fund, ensuring that the contributions reflect the employees' performance pay and the additional specified percentage.
Breaches of the obligations and requirements outlined in this Declaration can result in various consequences. While the Declaration does not explicitly outline penalties, failure to comply with the requirements could potentially lead to civil or criminal consequences under the broader Superannuation (Productivity Benefit) Act 1988. Employers failing to make the required contributions or not adhering to the timelines could face legal action, fines, or other penalties as stipulated by the Act. These consequences aim to ensure compliance and protect the superannuation entitlements of qualified employees.