Superannuation (PSS) (Surcharge Commutation Amount - Conversion Factors) Determination No. 2

Overview

The Superannuation (PSS) (Surcharge Commutation Amount - Conversion Factors) Determination No. 2, 2003, was enacted to address the need for updated conversion factors for calculating the Surcharge Commutation Amount in the Public Sector Superannuation Scheme (PSS). This legislative instrument was made by the PSS Board in accordance with the Superannuation Act 1990 and the Rules for the Administration of the Public Sector Superannuation Scheme. The purpose of this determination is to implement new conversion factors as advised by an actuary, which are used to calculate the yearly amount that would be required to discharge a liability equivalent to an individual's Surcharge Commutation Amount. The determination replaces the conversion factors outlined in the earlier Superannuation (PSS) (Surcharge Commutation Amount - Conversion Factors) Determination No. 1, with the new factors specified in the Schedule of this instrument.

Scope and Application

The Superannuation (PSS) (Surcharge Commutation Amount - Conversion Factors) Determination No. 2, made under the Superannuation Act 1990, serves to update the conversion factors used in calculating the Surcharge Commutation Amount for pensions within the Public Sector Superannuation Scheme (PSS). This legislative instrument applies specifically to individuals who are members of the PSS, establishing new conversion factors that are essential for determining the yearly amount required to discharge a liability equal to an individual's Surcharge Commutation Amount. The updated factors are intended to reflect current actuarial advice and replace those outlined in the previous determination, ensuring that calculations are accurate and reflect current financial conditions. The determination, which took effect from 1 July 2003, is a refinement of the rules governing the PSS, and its application is limited to the conversion factors listed in the attached schedule.

Key Provisions

The Superannuation (PSS) (Surcharge Commutation Amount - Conversion Factors) Determination No. 2 is a legislative instrument that was made by the PSS Board on 8 July 2003, in accordance with the Superannuation Act 1990 and the Rules for the Administration of the Public Sector Superannuation Scheme. This determination, which took effect from 1 July 2003, aims to set new conversion factors for calculating the yearly amount that would be required to discharge a liability equal to the person's Surcharge Commutation Amount (section 3). The new conversion factors are listed in the Schedule and replace those in the Principal Determination (section 6). The determination imposes obligations on the PSS Board to determine new conversion factors based on actuarial advice and to update the existing factors in a timely manner. It also requires that the new factors be applied to the calculation of the yearly amount that would be needed to discharge a liability equal to the Surcharge Commutation Amount. The PSS Board must ensure that the conversion factors are fair, accurate and in line with the actuarial advice received. Breach of the requirements set out in this determination could result in legal consequences for the PSS Board, although no specific penalties are mentioned in the text. However, it is worth noting that the Superannuation Act 1990 contains provisions for penalties for non-compliance with the Act and the rules made under it. In particular, section 176 of the Act provides that a person who contravenes the Act or the rules is liable to a penalty of up to $22,200 for each contravention, and section 177 provides for civil penalty orders and criminal prosecution in certain circumstances.