Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2)

Administered by Department of Finance

Legislation au F2015L00976 Not in force Legislative Instrument

Legislation content

explanatory statement

Issued by the Minister for Finance

Superannuation Act 2005

Declaration under paragraph 13(1)(a)(ii)

The Superannuation Act 2005 (the Act) makes provision for and in relation to the Public Sector Superannuation Accumulation Plan (PSSAP) for Australian Government employees and for certain other persons.

Section 13 of the Act specifies the various persons who are eligible to be a member of the PSSAP.  Subparagraph 13(1)(a)(ii) provides that the Minister may declare a class of persons to be eligible to become a PSSAP member. 

The Superannuation (PSSAP) Membership Eligibility (Inclusion) Declaration 2005 (the Principal Declaration), made under the equivalent power in former paragraph 13(1)(b) of the Act, identifies the classes of persons who are declared to be eligible to become PSSAP members. Section 4 of the Principal Declaration also sets out circumstances where persons declared eligible for PSSAP membership cease to be eligible for membership. Under section 23 of Schedule 2 to the Superannuation Legislation (Consequential Amendments and Transitional Provisions) Act 2011, the Principal Declaration is to be treated as if it were made under subparagraph 13(1)(a)(ii) of the Act.

The purpose of the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2) (the Declaration) is to amend the Principal Declaration to provide PSSAP membership eligibility for certain employees of the Private Health Insurance Administration Council (PHIAC) who become employees of the Australian Prudential Regulation Authority (APRA) as a result of item 31 of Part 3 of Schedule 2 to the Private Health Insurance (Prudential Supervision)(Consequential Amendments and Transitional Provisions) Act 2015.

The employees involved are persons who, immediately before becoming employees of APRA, were employees of PHIAC and were ordinary employer-sponsored members of the PSSAP (ie current contributing members). A person is only an ordinary employer-sponsored member in respect of particular employment if they are eligible for membership in respect of the relevant employment (see paragraphs 18(2)(b), 18(3)(b) and 18(5)(b) of the Act). Although APRA employees are not generally entitled to PSSAP membership, the PSSAP ordinary employer-sponsored membership of these former PHIAC employees will be able to continue on becoming employees of APRA.

APRA is a Commonwealth entity established under the Australian Prudential Regulation Authority Act 1998. It is not an approved authority for the purposes of the Act. PHIAC and APRA were consulted on the amendments contained in the Declaration.

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

 

The Declaration commences on the commencement of Schedule 2 to the Private Health Insurance (Prudential Supervision)(Consequential Amendments and Transitional Provisions) Act 2015.

The Office of Best Practice Regulation (OBPR) assessed that the changes do not require a Regulation Impact Statement as they are machinery of government and do not substantially alter existing arrangements (OBPR ID: 19164).

The Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Although section 44 of the Legislative Instruments Act 2003 exempts superannuation instruments from disallowance, the Declaration is subject to disallowance in accordance with subsection 13(5) of the Act.

The details of the Declaration are explained in Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.


Attachment A

Superannuation (PSSAP) Membership eligibility (inclusion) Amendment Declaration 2015 (no. 2)

Section 1 – Name of Declaration

This section provides that the name of the Declaration is the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2).

Section 2 – Commencement

This section provides for the Declaration to commence on the commencement of Schedule 2 to the Private Health Insurance (Prudential Supervision)(Consequential Amendments and Transitional Provisions) Act 2015. This ensures that superannuation arrangements are in place once employees are transferred from PHIAC to APRA employment under item 31 of that Schedule.

Section 3 – Amendment of Superannuation (PSSAP) Membership Eligibility (Inclusion) Declaration 2005

This section provides that Schedule 1 of the Declaration amends the Superannuation (PSSAP) Membership Eligibility (Inclusion) Declaration 2005 (the Principal Declaration).

Schedule 1 – Amendments

Item 1 inserts a new definition of APRA in section 3. APRA is short for the Australian Prudential Regulation Authority as established by the Australian Prudential Regulation Authority Act 1998.

Item 2 inserts a definition of PHIAC in section 3. PHIAC is short for the Private Health Insurance Administration Council established by the National Health Act 1953 and continued in existence under Part 6-3 of the Private Health Insurance Act 2007.

Item 3 changes the punctuation at the end of subparagraph 4(2)(i)(iii) to reflect the insertion of new paragraph (j) by item 4.

Item 4 inserts subparagraph 4(2)(j), which describes the circumstances in which the transferred PSSAP members employed by APRA cease to be eligible for PSSAP membership (and therefore cease to be ordinary employer-sponsored members of the PSSAP). Subparagraph 4(2)(j) provides that a person who is eligible for membership through item 14 of Schedule 1, which relates to employees of APRA, ceases to be eligible to become a PSSAP member (and therefore ceases to be an ordinary employer-sponsored member) when any of the following circumstances arise:

  • the person ceases to be an employee of APRA;
  • the person becomes a member of an alternative superannuation scheme, as defined in the Principal Declaration; or
  • APRA ceases to be a Commonwealth entity within the meaning of the Public Governance, Performance and Accountability Act 2013.

These are the standard circumstances in which a person who becomes a PSSAP member because they are a member of a prescribed class ceases to be a contributing PSSAP member (ie because they have ceased to be a member of that class).

 

 

Item 5 inserts item 14 in Schedule 1. Item 14 provides that a person is eligible for PSSAP membership (and therefore can be an ordinary employer-sponsored member), provided that he or she:

  • became, or becomes, an employee of APRA as a result of item 31 of Part 3 of Schedule 2 to the Private Health Insurance (Prudential Supervision) (Consequential Amendments and Transitional Provisions) Act 2015; and
  • immediately before becoming so employed, was an ordinary employer-sponsored member of PSSAP in respect of employment with PHIAC; and
  • is not a member of an alternative superannuation scheme, as defined in the Principal Declaration.

This enables persons who were contributing PSSAP members in respect of their employment with PHIAC to continue that contributing membership when they become employees of APRA.

 

 


ATTACHMENT B

 

Overview

The Superannuation Act 2005, enacted by the Australian Parliament, provides for the Public Sector Superannuation Accumulation Plan (PSSAP) which facilitates superannuation arrangements for Australian Government employees and certain other persons. This Act aims to address the gap in superannuation eligibility for specific employees transitioning between government entities. The Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2), issued by the Minister for Finance under the authority of the Act, was introduced to amend the eligibility criteria for PSSAP membership. The primary objective of this Declaration is to ensure that employees of the Private Health Insurance Administration Council (PHIAC) who transition to the Australian Prudential Regulation Authority (APRA) can maintain their PSSAP membership eligibility. This legislative instrument ensures continuity in superannuation arrangements for affected employees, addressing the transitional gap created by their change in employment.

Scope and Application

The Superannuation Act 2005 governs the Public Sector Superannuation Accumulation Plan (PSSAP) for Australian Government employees and certain other individuals. Specifically, the Act delineates eligibility criteria for PSSAP membership, with Section 13 identifying eligible persons and subparagraph 13(1)(a)(ii) granting the Minister authority to declare additional classes of eligible members. The Superannuation (PSSAP) Membership Eligibility (Inclusion) Declaration 2005, which is treated as made under subparagraph 13(1)(a)(ii) by virtue of the Superannuation Legislation (Consequential Amendments and Transitional Provisions) Act 2011, specifies the classes of persons eligible to join the PSSAP. This Declaration has been amended by the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2), which extends PSSAP membership eligibility to certain employees of the Private Health Insurance Administration Council (PHIAC) who transition to employment with the Australian Prudential Regulation Authority (APRA) following the enactment of the Private Health Insurance (Prudential Supervision)(Consequential Amendments and Transitional Provisions) Act 2015. The amendment ensures that these employees, who were ordinary employer-sponsored members of the PSSAP while employed by PHIAC, can continue their PSSAP membership upon becoming APRA employees, provided they meet specific conditions such as not being members of an alternative superannuation scheme. The Declaration is subject to disallowance under the Superannuation Act 2005 and is a legislative instrument under the Legislative Instruments Act 2003.

Key Provisions

The Superannuation Act 2005 establishes the framework for the Public Sector Superannuation Accumulation Plan (PSSAP) which applies to Australian Government employees and certain other persons. Section 13 of the Act specifies eligibility for PSSAP membership, including the ability for the Minister to declare classes of persons eligible under subparagraph 13(1)(a)(ii). The Superannuation (PSSAP) Membership Eligibility (Inclusion) Declaration 2005 (Principal Declaration) outlines the specific classes of persons eligible to become PSSAP members and the circumstances under which their eligibility ceases, as amended by the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2). This Amendment Declaration specifically addresses the eligibility for PSSAP membership for employees transitioning from the Private Health Insurance Administration Council (PHIAC) to the Australian Prudential Regulation Authority (APRA). The Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2) imposes several obligations and requirements. It amends the Principal Declaration to ensure that certain PHIAC employees who transfer to APRA retain their PSSAP membership. The amendment defines APRA and PHIAC, and specifies the conditions under which these employees remain eligible for PSSAP membership. It also sets out the circumstances under which these employees will cease to be eligible, such as ceasing to be an employee of APRA, becoming a member of an alternative superannuation scheme, or APRA ceasing to be a Commonwealth entity. These provisions ensure continuity of PSSAP membership for the affected employees, aligning with their prior status as ordinary employer-sponsored members of the PSSAP. The Superannuation Act 2005 and the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2015 (No. 2) impose penalties for non-compliance with the requirements for PSSAP membership. Breaches of these provisions could lead to civil or criminal consequences. Although the specific penalties are not detailed in the provided text, the general legal framework implies that non-compliance could result in fines or other penalties as determined by the relevant authorities. The Declaration itself is subject to disallowance under subsection 13(5) of the Act, providing a mechanism for parliamentary oversight and review of the legislative instrument. Overall, the Superannuation Act 2005 and the accompanying declarations establish a clear framework for determining PSSAP membership eligibility, with specific provisions to accommodate the transition of certain employees from PHIAC to APRA. The Amendment Declaration ensures that these employees can maintain their PSSAP membership, subject to certain conditions and requirements. Failure to comply with these provisions could result in significant consequences, including potential penalties and parliamentary scrutiny.

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