Superannuation (PSS) Maximum Benefits
(2005-2006) Determination 2005 –
Explanatory Statement
1 Name of Determination
This determination is the Superannuation (PSS) Maximum Benefits (2005-2006) Determination 2005.
2 Commencement
This determination takes effect on 1 July 2005.
3 Purpose
The purpose of the determination is to set new maximum benefits for the Public Sector Superannuation (PSS) scheme to apply for the financial year beginning on 1 July 2005.
4 Background
Establishment of the PSS Scheme
The PSS scheme is established by the Superannuation Act 1990, a Trust Deed and Rules.
The PSS Rules were renumbered with effect from 1 July 1995, as a result of amendments made by the Ninth Amending Trust Deed.
Maximum Benefits
The PSS Rules contain specific rules specifying maximum benefits for scheme members and employees of the Australian Federal Police (AFP).
These specific rules are designed to ensure that the maximum attainable PSS benefits do not exceed the community wide superannuation Reasonable Benefits Limits administered by the Australian Taxation Office.
The lump sum and pension maximum benefits for AFP employees who are PSS members are designed to take into account a special superannuation entitlement paid by the AFP. The maximum benefits for these members place a limit on the combined AFP special benefit and the PSS benefit.
The maximum benefits also place a cap on the employer cost of the PSS.
Relevant Rules
Under the renumbered PSS Rules that came into effect on 1 July 1995, rules 5.6.1, 5.7.1 and 5.7.2 set out the Table of Maximum Benefits Rates.
In particular, the rules dealt with the following:
- rule 5.6.1 – maximum lump sum benefits for members;
- rule 5.7.1 – maximum lump sum benefits for AFP employees; and
- rule 5.7.2 – maximum pension benefits for AFP employees.
The amounts in the tables in rules 5.6.1 and 5.7.1 are the same.
Each rule sets out a table containing the maximum benefits to apply from 1 July 1995 until amended.
Power to Amend Maximum Benefits
Pursuant to rules 5.6.5 and 5.7.7 the PSS Board is empowered to determine maximum benefits for the purposes of the PSS Scheme, with effect from1 July 1995 each year.
- under rule 5.6.5 the Board has the power to determine the amounts to be substituted into the Table of Maximum Benefits in rule 5.6.1.
- under rule 5.7.7 the Board has the power to determine the amounts to be substituted into the Table - AFP Preliminary Maximum Benefits - Lump Sums in rule 5.7.1 and the Table - AFP Preliminary Maximum Benefits - Pensions in rule 5.7.2.
Delegation
The PSS Board has delegated its power under rules 5.6.5 and 5.7.7 to relevant officers in Commonwealth Superannuation Administration (ComSuper).
Maximum Benefits in the Period 1 July 1996-30 June 2005
From 1 July 1996 onwards, the amounts set out in the tables in rules 5.6.1, 5.7.1 and 5.7.2 were replaced on 1 July each year, pursuant to the PSS (Maximum Benefits) Determination No 1, which was amended each year.
New Maximum Benefits
The new maximum benefits that apply with effect from 1 July 2005 are set out in the determination.
Revocation
With effect from 1 July 2005, the PSS (Maximum Benefits) Determination No 1, as amended, is revoked.
Overview
The Superannuation (PSS) Maximum Benefits (2005-2006) Determination 2005, enacted in 2005, addresses the need to set new maximum benefits for the Public Sector Superannuation (PSS) scheme applicable from the financial year beginning on 1 July 2005. This determination was made by the Public Sector Superannuation Board and was established under the Superannuation Act 1990, which governs the PSS scheme, along with a Trust Deed and Rules. The policy objective behind this determination is to ensure that the maximum benefits under the PSS scheme do not exceed the Reasonable Benefits Limits set by the Australian Taxation Office, while also considering special superannuation entitlements for Australian Federal Police (AFP) employees. The determination specifically sets new limits for lump sum and pension benefits for AFP employees, as well as caps on employer costs within the scheme.
Scope and Application
The Superannuation (PSS) Maximum Benefits (2005-2006) Determination 2005 applies to members and employees of the Australian Federal Police (AFP) who are part of the Public Sector Superannuation (PSS) scheme. This scheme is established under the Superannuation Act 1990, and its rules were renumbered on 1 July 1995. The determination sets new maximum benefits for the PSS scheme, specifically addressing the maximum lump sum and pension benefits for AFP employees, taking into account a special superannuation entitlement paid by the AFP. The determination ensures that these benefits do not exceed the community-wide superannuation Reasonable Benefits Limits administered by the Australian Taxation Office. The new maximum benefits, effective from 1 July 2005, replace those set out in the PSS (Maximum Benefits) Determination No 1, which is revoked from the same date. The PSS Board has delegated its power to determine these maximum benefits to relevant officers in the Commonwealth Superannuation Administration (ComSuper).
Key Provisions
The Superannuation (PSS) Maximum Benefits (2005-2006) Determination 2005 (the Determination) establishes new maximum benefit levels for the Public Sector Superannuation (PSS) scheme to apply from 1 July 2005. This Determination came into effect on the same date, superseding the PSS (Maximum Benefits) Determination No 1, as amended. The Determination is made pursuant to the authority given under the Superannuation Act 1990, the Trust Deed and the PSS Rules, particularly rules 5.6.5 and 5.7.7. The PSS Board has delegated its power to determine maximum benefits to relevant officers within the Commonwealth Superannuation Administration (ComSuper). The Determination sets out new maximum lump sum and pension benefits for PSS members and Australian Federal Police (AFP) employees. For the financial year starting 1 July 2005, these new benefits are outlined in the Determination and replace the previous rates set by the PSS (Maximum Benefits) Determination No 1.
The Determination imposes specific obligations on the PSS Board and ComSuper officers to set and apply the new maximum benefits as outlined. The PSS Board, through its delegated officers in ComSuper, is responsible for determining and implementing the new maximum benefit levels for the PSS scheme. These benefits must be applied in accordance with the provisions of the Superannuation Act 1990, the Trust Deed, and the PSS Rules. The Determination ensures that the maximum benefits do not exceed the community-wide superannuation Reasonable Benefits Limits set by the Australian Taxation Office. Additionally, it ensures that the benefits for AFP employees take into account any special superannuation entitlements provided by the AFP, while also capping the employer costs associated with the PSS scheme.
Failure to comply with the provisions of the Determination could result in penalties and consequences. While the Determination itself does not explicitly state the penalties for non-compliance, any breaches of the Superannuation Act 1990 or the PSS Rules may lead to enforcement actions by the Australian Taxation Office. These actions could include fines or other penalties as prescribed by the Act or applicable regulations. Additionally, individuals who receive benefits in excess of the specified maximum limits may be subject to tax implications or required to repay the excess amounts. It is crucial for all parties involved to adhere to the Determination to avoid any legal or financial repercussions.