Superannuation (PSS) Maximum Benefits
(2006-2007) Determination 2006 –
Explanatory Statement
1 Name of Determination
This determination is the Superannuation (PSS) Maximum Benefits (2006-2007) Determination 2006.
2 Commencement
This determination takes effect on 1 July 2006.
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 2006.
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.
The PSS Rules were amended by the Twentieth Amending Trust Deed executed in 2004 by the addition of a “B” before each rule with effect from 1 July 2005.
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 B5.6.1, B5.7.1 and B5.7.2 set out the Table of Maximum Benefits Rates.
In particular, the rules dealt with the following:
- rule B5.6.1 – maximum lump sum benefits for members;
- rule B5.7.1 – maximum lump sum benefits for AFP employees; and
- rule B5.7.2 – maximum pension benefits for AFP employees.
The amounts in the tables in rules B5.6.1 and B5.7.1 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 B5.6.5 and B5.7.7 the PSS Board is empowered to determine maximum benefits for the purposes of the PSS scheme, with effect from 1 July 1995 each year.
- under rule B5.6.5 the Board has the power to determine the amounts to be substituted into the Table of Maximum Benefits in rule B5.6.1.
- under rule B5.7.7 the Board has the power to determine the amounts to be substituted into the Table - AFP Preliminary Maximum Benefits - Lump Sums in rule B5.7.1 and the Table - AFP Preliminary Maximum Benefits - Pensions in rule B5.7.2.
Delegation
The PSS Board has delegated its power under rules B5.6.5 and B5.7.7 to relevant officers in Commonwealth Superannuation Administration.
Maximum Benefits in the Period 1 July 1996 - 30 June 2005
In the period from 1 July 1996 to 30 July 2005, the amounts set out in the tables in rules B5.6.1, B5.7.1 and B5.7.2 were replaced on 1 July each year, pursuant to the PSS (Maximum Benefits) Determination No 1, which was amended each year. That Determination was revoked on 1 July 2005 by the Superannuation (PSS) Maximum Benefits (2005-2006) Determination 2005 which set out the maximum benefits for the financial year commencing on 1 July 2005.
Maximum Benefits in the Period from 1 July 2005
Maximum benefits in the period from 1 July 2005 are set out in annual determinations that apply for the financial year commencing on 1 July each year.
5 New Maximum Benefits
The new maximum benefits that apply with effect from 1 July 2006 are
set out in the determination.
6 Consultation
As the instrument is for internal machinery of Government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Overview
The Superannuation (PSS) Maximum Benefits (2006-2007) Determination 2006, enacted in 2006, was established to address the need for setting new maximum benefits for the Public Sector Superannuation (PSS) scheme applicable for the financial year beginning on 1 July 2006. This legislation was enacted by the Commonwealth of Australia under the authority of the Superannuation Act 1990, aiming to ensure that the maximum benefits for PSS members and employees of the Australian Federal Police (AFP) do not exceed the community-wide superannuation Reasonable Benefits Limits set by the Australian Taxation Office. The determination updates the maximum benefits annually, reflecting changes in the financial environment and policy objectives to maintain the sustainability and fairness of the PSS scheme.
Scope and Application
The Superannuation (PSS) Maximum Benefits (2006-2007) Determination 2006 applies to members of the Public Sector Superannuation (PSS) scheme, which is established by the Superannuation Act 1990, a Trust Deed and Rules. The determination sets new maximum benefits for the PSS scheme to apply for the financial year beginning on 1 July 2006, ensuring that the maximum attainable PSS benefits do not exceed the community-wide superannuation Reasonable Benefits Limits administered by the Australian Taxation Office. This determination also applies to employees of the Australian Federal Police (AFP) who are members of the PSS scheme, with special consideration given to their unique superannuation entitlements. The PSS Board has the authority to determine the maximum benefits each year under rules B5.6.5 and B5.7.7, and this power has been delegated to relevant officers in the Commonwealth Superannuation Administration. The new maximum benefits apply nationally across Australia, as the PSS scheme operates under Commonwealth law.
Key Provisions
The Superannuation (PSS) Maximum Benefits (2006-2007) Determination 2006 (the Determination) establishes the maximum benefits for the Public Sector Superannuation (PSS) scheme for the financial year starting on 1 July 2006, effective from 1 July 2006. This Determination aligns with the PSS scheme, established under the Superannuation Act 1990, which governs the benefits available to members and employees of the Australian Federal Police (AFP). The PSS Board, empowered by rules B5.6.5 and B5.7.7, is responsible for determining the maximum benefits each year, a power that has been delegated to the Commonwealth Superannuation Administration.
The Determination sets new maximum benefits for the PSS scheme, ensuring these benefits do not exceed the Reasonable Benefits Limits set by the Australian Taxation Office for the broader community. It specifically addresses the maximum lump sum and pension benefits for PSS members and AFP employees, taking into account a special superannuation entitlement paid by the AFP. The new maximum benefits are detailed in the Determination and are intended to limit the combined benefits of the AFP special benefit and the PSS benefit, as well as to cap the employer cost of the PSS.
The PSS Board's determination of maximum benefits is a critical function under the PSS scheme. It ensures that the benefits provided are sustainable and comply with the broader superannuation regulations. This role is supported by the PSS Rules, particularly rules B5.6.1, B5.7.1, and B5.7.2, which outline the maximum benefits for lump sums and pensions for PSS members and AFP employees. These rules were renumbered in 1995 and amended in 2004, with the PSS Board's determinations replacing the tables in these rules annually.
The Determination also notes that, unlike previous years, no external consultation was deemed necessary for this instrument as it pertains to internal government operations. This decision aligns with sections 17 and 18 of the Legislative Instruments Act 2003, which permit such determinations without public consultation. The determination of maximum benefits is a routine process that falls under the administrative purview of the PSS Board, ensuring the scheme operates within the legislative and regulatory framework established by the Superannuation Act 1990 and subsequent amendments.