Superannuation (Sustaining the Superannuation Contribution Concession—PSS Pension Reduction Conversion Factors) Determination 2015

 1 Name of Determination

 This Determination is the Superannuation (Sustaining the Superannuation Contribution Concession – PSS Pension Reduction Conversion Factors) Determination 2015.

2 Commencement

This Determination commences on the day after it is registered on the Federal Register of Legislative Instruments.

3 Authority for this Determination

 This Determination is made under rule 17.1.8 of the Schedule to the Public Sector Superannuation Scheme Trust Deed (PSS Rules).[1]

4 Purpose and operation of this Determination

In 2013 the tax concession that individuals with income above $300,000 received on their concessional superannuation contributions was reduced from 30 per cent to      15 per cent. This is known as Sustaining the Superannuation Contributions Concession, also known as “Division 293 tax”.

The 38th Amending Trust Deed[2] inserted Part 17 into the PSS Rules to allow for the adjustment of benefits to meet this liability.

Under Part 17 of the PSS Rules, a person may give Commonwealth Superannuation Corporation (CSC) a release authority in accordance with Division 135 in Schedule 1 to the Taxation Administration Act 1953. 

Under rule 17.1.2(b) of the PSS Rules, a person entitled to receive, or in receipt of, a pension may elect to receive a reduced pension to reflect the release authority lump sum.

Pensions are reduced under rule 17.1.7 of the PSS Rules using conversion factors determined by CSC under rule 17.1.8 of the PSS Rules. Pension reductions under rule 17.1.7 take effect from the pension reduction day set out in rule 17.1.9 of the PSS Rules.

The pension reduction conversion factors are set out in this Determination. 

5 Legislative Instruments Act 2003

This Determination is a legislative instrument for the purposes of section 5 of the Legislative Instruments Act 2003 (LIA). However, as this Determination is an instrument relating to superannuation, it is exempted from disallowance by item 39 of the table in subsection 44(2) of the LIA.

6 Consultation

Section 17 of the LIA specifies that rule-makers should consult before making legislative instruments. Actuarial advice was obtained regarding the factors included in this Determination.

7 Statement of Compatibility with Human Rights

Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the LIA. As mentioned above, this Determination is exempt from disallowance which means that a Statement of Compatibility with Human Rights is not required.

[1] The Rules are a Schedule to the Trust Deed available at http://www.comlaw.gov.au/Series/F2005B01198.

[2] ComLaw ID F2013L01568.