EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 344
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976
SUPERANNUATION (RETIRING AGE) REGULATIONS (AMENDMENT)
LEGISLATIVE BASIS FOR THE REGULATIONS
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which the Act requires or permits to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Sub-section 3(1) of the Act defines “maximum retiring age” as 65 years or such lesser age as, under regulations made under the Act, is the maximum retiring age applicable to a person or class of persons.
Regulation 4 of the Superannuation (Retiring Age) Regulations specifies age 60 years as the “maximum retiring age” applicable to certain classes of persons.
BACKGROUND
The invalidity and death benefits payable to, or in respect of, a contributor under the Act have regard, in most cases, to the contributor’s period of prospective service. “Period of prospective service” refers to the aggregate of the period of contributory service at the date the person ceases to be an eligible employee and the period from that date until the person’s “maximum retiring age”.
Maximum retiring ages lower than age 65 which are applicable to certain contributors under their terms and conditions of employment do not apply automatically for the purposes of the Act. It is therefore necessary for such lesser maximum retiring ages to be prescribed in regulations to enable invalidity and death benefits, where based on years of prospective service, to be determined by reference to those lesser ages.
CONTENT
Sub-regulation 4(1) of the Superannuation (Retiring Age) Regulations prescribes certain classes of persons whose maximum retiring age for the purposes of the Act is age 60 years but, in the case of persons who were contributors to the superseded (pre 30 June 1976) Superannuation Scheme, excludes persons whose selected retiring age under that Scheme was age 65. The Regulations amend sub-regulation 4(1) by adding to the classes of persons whose maximum retiring age for the purposes of the Act is 60 years, those persons who are employees within the meaning of Commonwealth Employees (Redeployment and Retirement) Act 1979 and whose maximum retiring age under that Act is the age of 60 years. This enables the payment of the appropriate invalidity and death benefits to or in respect of such persons where the benefits are based on years of prospective service.
The Regulations take effect on and from 11 January 1986. This corresponds with the amendments to the Commonwealth Employees (Redeployment and Retirement) Regulations which prescribe Air Traffic Controllers and certain former Air Traffic Controllers as classes of employees with a maximum retiring age of 60 years for the purposes of the Commonwealth Employees (Redeployment and Retirement) Act 1979 on and from 11 January 1986.
Overview
The Superannuation (Retiring Age) Regulations (Amendment) Statutory Rules 1985 No. 344, issued under the authority of the Minister for Finance, amend the Superannuation (Retiring Age) Regulations to address the gap in the application of lesser maximum retiring ages for certain contributors under the Superannuation Act 1976. The Superannuation Act, enacted in 1976, established a framework for superannuation benefits in Australia, including the concept of a "maximum retiring age." However, the Act did not automatically apply lower maximum retiring ages, which were specified in the terms and conditions of employment for certain classes of persons, to the calculation of invalidity and death benefits based on years of prospective service. The amendment aims to rectify this by prescribing, through regulation, the maximum retiring age of 60 years for certain classes of persons, thereby ensuring that these benefits are calculated correctly. The Regulations were enacted by the Parliament and align with the policy objective of providing clarity and consistency in the application of superannuation benefits.
Scope and Application
The Superannuation (Retiring Age) Regulations (Amendment) under the Superannuation Act 1976 pertain to the determination of the maximum retiring age for certain individuals for the purposes of calculating invalidity and death benefits. The Act applies to individuals whose terms and conditions of employment dictate a maximum retiring age lower than the statutory default of 65 years. This amendment specifically extends the application of a 60-year maximum retiring age to employees covered under the Commonwealth Employees (Redeployment and Retirement) Act 1979, provided their retiring age under that Act is also 60 years. This alignment ensures that the benefits calculation for these employees correctly reflects their lesser maximum retiring age. The Regulations do not apply to contributors to the superseded superannuation scheme who had selected a retiring age of 65. The Regulations came into effect on 11 January 1986, aligning with corresponding amendments to the Commonwealth Employees (Redeployment and Retirement) Regulations.
Key Provisions
The Superannuation (Retiring Age) Regulations (Amendment) specify certain operative sections that mandate the determination of the maximum retiring age for particular classes of individuals. Section 4(1) of the Regulations sets the maximum retiring age at 60 years for certain classes of persons, excluding those who had chosen a retiring age of 65 under the pre-1976 Superannuation Scheme. The amendment extends this definition to include employees under the Commonwealth Employees (Redeployment and Retirement) Act 1979 who have a maximum retiring age of 60 years. These provisions ensure that the benefits, particularly invalidity and death benefits calculated on the basis of prospective service, are accurately determined.
The Act imposes specific obligations on the relevant parties to adhere to these regulations. Employers, superannuation funds, and employees must recognise and apply the prescribed maximum retiring age of 60 years for the specified classes of individuals. This is particularly crucial for calculating benefits accurately and ensuring that the entitlements are correctly determined based on the stipulated age limits. Additionally, the regulations require the superannuation funds to adjust their calculations to reflect these changes and ensure compliance with the Act.
Breaches of the Superannuation (Retiring Age) Regulations can lead to significant consequences. The Act may impose penalties for non-compliance, although the specific penalties are not detailed in the provided text. Generally, non-compliance with superannuation regulations can lead to financial penalties, legal action, and reputational damage. Employers may face fines or other sanctions for failing to adhere to the prescribed retiring ages, which can impact their operations and financial standing. Superannuation funds that do not comply with the regulations may also face penalties and be required to rectify any incorrect benefit calculations.