EXPLANATORY STATEMENT
ISSUED BY THE MINISTER FOR FINANCE AND DEREGULATION
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
DECLARATION UNDER SUBSECTION 3F(2)
Superannuation (Productivity Benefit)
(Qualified Employees Exclusion) Declaration 2012
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides superannuation arrangements, based on the minimum employer superannuation requirements under the Superannuation Guarantee (SG), for certain Australian Government employees, office holders and contractors.
2. The Judges’ Pensions Act 1968 (JP Act) provides for the payment of a lump sum in limited circumstances, that is, where a judge:
(a) dies without leaving an eligible spouse or children at the time of their death;
(b) dies leaving an eligible spouse or children where the reversionary pension to that spouse or children ceases to be payable before it equals the minimum payment required under the SG; and
(c) is not eligible for a pension on ceasing their service as judge.
3. Under the JP Act a lump sum benefit for a judge who commenced service before 1 July 2006 is calculated under the PB Act, rather than the SG arrangements in the JP Act.
(a) The PB Act is a legacy superannuation arrangement, which was closed to new members on 1 July 2006.
(b) At the time of closure of the PB Act in 2006, the SG lump sum arrangements, together with a special appropriation to cover these payments, were inserted into the JP Act to apply going forward. However, an appropriate legislative change was not made to make sure that all superannuation lump sums that became payable would be covered under the JP Act and the special appropriation for that purpose.
4. The Government proposes to correct this situation by making minor amendments to the JP Act at the next available opportunity.
5. Under the proposed amendments, all judges, including those appointed before 1 July 2006, would be covered by the JP Act in respect of any lump sum benefit that becomes payable, thus securing the payment of all judges’ benefits under the appropriation in the JP Act in future.
6. This declaration, made under subsection 3F(2) of the PB Act and cited as the Superannuation (Productivity Benefit) (Qualified Employees Exclusion) Declaration 2012, is being made as an interim measure that is consistent with the proposed permanent solution.
7. The effect of this declaration is to cease operation of the PB Act in respect of any affected judge, such as the recently deceased judge mentioned above, who:
(a) would otherwise have been covered by the PB Act due to having pre-1 July 2006 service; and
(b) where the benefit payable under the JP Act is not less than the benefit that would have been payable under the PB Act.
8. The Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LI Act).
9. The Attorney-General’s Department and the Australian Government Solicitor (AGS) were consulted in relation to the Declaration.
10. The Declaration commences on 1 July 2012. The AGS has confirmed that the Minister has the legal authority to make the declaration, including the commencement date. No judge can be disadvantaged by the declaration as it only applies where the benefit payable under the JP Act is not less than the benefit that would have been payable under the PB Act.
11. A Statement of Compatibility with Human Rights is at Attachment A.
ATTACHMENT A