Superannuation (PSSAP) Unit Pricing Determination 2005 - Explanatory Statement
1 Name of Determination
This Determination is the Superannuation (PSSAP) Unit Pricing Determination 2005 .
2 Purpose and operation of instrument
Rule 5.2.1 of the Rules for administration of the Public Sector Superannuation Accumulation Plan (PSSAP Rules) provides that the Board may determine the amounts to be credited or debited to a person’s personal accumulation account under Rule 5.1.5(e) or 5.1.6(c) that reasonably reflects the after tax earnings or losses derived from the investment of the amount in the account.
Rule 5.4.2 of the PSSAP Rules provides that the Board may determine when and how a PSSAP member may make or change their election about their choice of investment strategy.
Rule 5.4.3 of the PSSAP Rules provides that the Board may determine, in relation to choice of investment strategy, the fees, costs and expenses to be paid from a person's personal accumulation account, including fees, costs and expenses in connection with the investment of contributions, the realisation of those investments, the choice of an investment strategy and changes to an investment strategy.
3 Principal Instrument
This Determination is the principal instrument.
4 Investment choice
The Board has decided to allow members investment choice. There are currently 11 investment options from which to choose. Amounts paid into or withdrawn from the fund are used to purchase or redeem units at a price calculated by using a methodology determined by the actuarial report, a commercial-in-confidence document which is not publicly available. Each investment option has a buy and sell price applied to amounts paid into or withdrawn from the investment option. The buy price determines the number of units allocated to the member in the particular investment option. The sell price determines the value of units that are being withdrawn from a particular investment option.
The daily buy and sell prices of relevant units are set out in Schedules 1 and 2 to the principal instrument. Schedule 1 sets out unit prices in the period from 1 July 2005 to 22 July 2005.
5 Unit Pricing determinations apply from the date specified
This Determination sets a buy and a sell price for each investment option to apply for each day commencing 1 July 2005 to 22 July 2005 as set out in Schedule 1.
Overview
The Superannuation (PSSAP) Unit Pricing Determination 2005 was enacted to address the need for a structured methodology to determine the buy and sell prices of units within the Public Sector Superannuation Accumulation Plan (PSSAP). This Determination was introduced by the Board under the authority granted by the PSSAP Rules, specifically Rules 5.2.1, 5.4.2, and 5.4.3. The principal objective of this legislation is to ensure that the amounts credited or debited to a member’s personal accumulation account accurately reflect the after-tax earnings or losses from the investments. By setting forth the buy and sell prices for each investment option, the Determination provides a transparent and consistent framework for calculating these values, thereby enhancing the plan’s administration and member confidence.
Scope and Application
The Superannuation (PSSAP) Unit Pricing Determination 2005 applies to members of the Public Sector Superannuation Accumulation Plan (PSSAP), which includes both current and former public sector employees who have opted into the PSSAP. This Determination governs the pricing methodology for the units of various investment options within the PSSAP, thereby affecting the calculation of after-tax earnings or losses derived from the investment of amounts in personal accumulation accounts. The Determination sets out the buy and sell prices for each investment option, which are crucial for determining the number of units allocated to members and the value of units when withdrawn. These unit prices apply from 1 July 2005 to 22 July 2005 as specified in Schedules 1 and 2 to the principal instrument. The Determination ensures that the Board can determine the amounts to be credited or debited to a member’s account, aligning with the rules specified in the PSSAP Rules. The jurisdiction of this Determination is limited to the Commonwealth level, directly impacting the administration of the PSSAP within the federal public sector.
Key Provisions
The Superannuation (PSSAP) Unit Pricing Determination 2005 (F2005L02074) provides key provisions for the Public Sector Superannuation Accumulation Plan (PSSAP). Section 5.2.1 of the PSSAP Rules allows the Board to determine amounts to credit or debit from members’ personal accumulation accounts, reflecting after-tax earnings or losses from investments. This ensures that the account balances accurately represent the investment performance. Section 5.4.2 permits the Board to decide when and how members can make or change their investment strategy choices. Section 5.4.3 empowers the Board to specify fees, costs, and expenses related to investment choices, which are to be paid from members' accounts.
The Determination outlines the Board's decision to offer members investment choice, with currently 11 available investment options. It details the methodology for calculating buy and sell prices, which are applied to contributions and withdrawals. The buy price determines the number of units allocated to a member in a specific investment option, while the sell price determines the value of units redeemed. The daily buy and sell prices for each investment option are set out in Schedule 1, covering the period from 1 July 2005 to 22 July 2005.
The Determination imposes obligations on the Board to accurately calculate and publish the daily buy and sell prices for each investment option, ensuring transparency and fairness in the investment process. The Board must adhere to the methodology determined by the actuarial report, which, although not publicly available, must be followed to maintain the integrity of the pricing process. Members are also obligated to make informed decisions regarding their investment choices based on the provided pricing information.
Breaches of the provisions in the Determination could lead to administrative or legal consequences. While the Determination itself does not explicitly state penalties, breaches of related provisions in the PSSAP Rules may result in fines or other penalties as prescribed by the relevant legislation. For instance, failure to comply with the Rules could lead to financial penalties, enforcement actions, or legal proceedings against the Board or the members for non-compliance. It is essential for all parties to adhere to the Determination to avoid any potential repercussions.