EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO 231
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976 - SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing 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.
The Act makes provision for and in relation to an occupational superannuation scheme for persons employed by the Commonwealth, and for certain other persons.
Under the Act, the rate of fortnightly contributions payable by an eligible employee (contributor) is expressed as a percentage of the fortnightly rate of his or her salary. In accordance with subsection 3(1) of the Act, “fortnightly rate of salary” in relation to a contributor means an amount equal to one-twenty-sixth of the amount of his or her annual rate of salary.
The rates of employer-financed invalidity, age and early retirement pensions payable under the Act are expressed as percentages of the former contributor’s final annual rate of salary. In accordance with subsection 3(1) of the Act, “final annual rate of salary” means, in the generality of cases, the person’s annual rate of salary on his or her last day of service.
Sub-section 5(2) of the Act provides that, subject to sub-section 5(3), the “annual rate of salary” of a contributor on a particular day is an amount equal to the amount per annum of the salary for the purposes of the Act payable to the contributor on that day. Sub-section 5(3) provides that the regulations may provide that, in a case specified in the regulations, the annual rate of salary of a contributor on a particular day shall, for the purposes of the Act or a provision of the Act specified in the regulations, be an amount equal to such amount per annum as is ascertained under the regulations.
Regulations for the purposes of section 5 are contained in the Superannuation (Salary) Regulations.
Section 47 of the Act provides that, where there is a reduction in a contributor’s salary, the contributor’s annual rate of salary for the purposes of the Act after the reduction is to be:
(a) if no election is made under subsection 47(2) - fixed at the annual amount applicable immediately before the reduction; or
(b) if an election is made under subsection 47(2) - the annual amount of the lower rate of salary as updated from time to time.
Regulation 20 of the Superannuation (Salary) Regulations, however, provides that in the case of an officer of the Australian Public Service (other than a fixed-term appointee):
(a) who is a Secretary of a Department and who is redeployed to a lower classification of Secretary or to a Senior Executive Service classification; or
(b) who is a Senior Executive Service officer and who is redeployed to a lower Senior Executive Service classification or to a lower classification that is not a Senior Executive Service classification,
and who does not make an election under subsection 47(2), the annual rate of salary of the person for the purposes of the Act after the redeployment, or subsequent such redeployments, be the annual rate of salary as updated from time to time applicable to the classification held by the person immediately before the first such redeployment.
It is intended that similar arrangements apply in relation to a specified group of positions in the Commonwealth Scientific and Industrial Research Organisation. The proposed Superannuation (Salary) Regulations (Amendment) will give effect to this intention. The proposed amendments are outlined in the attachment.
The amending Regulations operate from the date of their gazettal.
ATTACHMENT
DETAILS OF SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)
The amending Regulations insert a new regulation 21 in the Superannuation (Salary) Regulations relating to eligible employees (contributors) who hold the following positions in the Commonwealth Scientific and Industrial Research Organisation:
(a) Director of Institute;
(b) Chief of Division, Grade 1, 2, 3 or 4;
(c) Executive Secretary;
(d) Senior Executive, Level 4, 5 or 6;
(e) First Assistant Secretary;
(f) Senior Assistant Secretary;
(g) Assistant Secretary; or
(h) Director of Technical Services;
The provisions of regulation 21 are described in the following paragraphs.
Subregulation 21(1) provides that in regulation 21:
• “relevant appointment” means one of the positions referred to above; and
• “Organisation” means the Commonwealth Scientific and Industrial Research Organisation.
Subregulation 21(2) provides that, where an eligible employee who holds a relevant appointment is:
(a) transferred to any other relevant appointment for which a lower annual rate of salary for the purposes of the Act is applicable; or
(b) transferred from a relevant appointment to another position that is not a relevant appointment and for which a lower annual rate of salary for the purposes of the Act is applicable,
the person’s annual rate of salary for the purposes of the Act is to be, at any time, what it would have been had the person remained in the relevant appointment originally held.
Subregulation 21(3) ensures that an allowance received by the person while holder of the original relevant appointment will not be taken into account in determining his or her annual rate of salary under subregulation 21(2) unless the person had qualified, in accordance with the Regulations, to have the allowance form part of his or her annual rate of salary for the purposes of the Act on the day preceding his or her transfer from the original relevant appointment.
Subregulation 21(4) ensures that, where a person becomes the holder of a relevant appointment but has an annual rate of salary for the purposes of the Act by virtue of a previous application of section 47 that is greater than the annual rate of salary applicable to the relevant appointment, that higher annual rate of salary will continue to be the person’s annual rate of salary for the purposes of the Act until it is exceeded by the annual rate of salary determined in accordance with subregulation 21(2) at which point the latter annual rate of salary will become applicable to the person for the purposes of the Act.
Subregulation 21(5) provides that subregulation 21(2) does not apply to an eligible employee where he or she:
(a) makes an election under subsection 47(2) of the Act on the day on which subregulation 21(2) would otherwise first become applicable (where the person made such an election, neither section 47(1) of the Act nor subregulation 21(2) would apply); or
(b) has been appointed as an officer of the Commonwealth Scientific and Industrial Research Organisation for a fixed term only.
Subregulation 21(6) provides that subregulation 21(2) ceases to apply to an eligible employee where he or she:
(a) having been transferred from a relevant appointment to a position that is not a relevant appointment is subsequently transferred to a position that is not a relevant appointment and which has a lower classification; or
(b) ceases to be an officer of the Commonwealth Scientific and Industrial Research Organisation.
In the case of (a), and in a case under (b) where the person moved to a position in respect of which an annual rate of salary applied that was lower than the rate applicable to the person under subregulation 21(2), the provisions of section 47 of the Act would then apply. Regarding (a), where the person was transferred from a
relevant appointment to a position that was not a relevant appointment but which had a lower salary and was then transferred to another position that was not a relevant appointment but where the salary was the same as for the previously held position, subregulation 21(2) would continue to apply.
Subregulation 21(7) provides that subregulation 21(2) ceases to apply from and including a day on which the person makes an election under subsection 47(2) of the Act, whether in relation to the transfer from the original relevant appointment or any further transfer.
Subregulation 21(8) provides that subregulation 21(2) ceases to apply when the person’s annual rate of salary for the purposes of the Act is greater than the rate that would otherwise have applied to the person by virtue of subregulation 21(2).