Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007 proposes amendments which will update a range of legislation, largely as a consequence of other legislative changes.

The bill amends 30 acts as a consequence of the establishment of the Public Sector Superannuation Accumulation Plan and the consolidation of the governance arrangements for the superannuation schemes for Australian government employees.

The Public Sector Superannuation Accumulation Plan, the PSSAP, was established on 1 July 2005. It replaced the Public Sector Superannuation Scheme, the PSS, as the main superannuation scheme for new Australian government employees and office holders. 

Many Commonwealth acts include references to the PSS when dealing with the terms and conditions of employment for persons engaged under those acts. The bill proposes amendments to those acts to also include a reference to PSSAP where appropriate, reflecting the likelihood that many future employees and office holders engaged under those acts could be PSSAP members.

The amendments include provisions intended to emphasise the requirement of the Superannuation Act 2005 that PSSAP contributory members may not be retired on invalidity grounds without the prior approval of the scheme’s trustee. Similar arrangements also apply for employees who are members of the PSS and the Commonwealth Superannuation Scheme, the CSS, which was the main Australian government superannuation scheme prior to the PSS.

Amendments are also proposed to a number of Commonwealth acts to reflect the consolidation of the governance arrangements for the three major superannuation schemes for Australian government employees—the CSS, the PSS and the PSSAP. Since 1 July 2006, the Australian Reward Investment Alliance, ARIA, has been the trustee for the three schemes. The Superannuation Legislation Amendment (Trustee Board and Other Measures) Act 2006 transferred all the functions of the CSS board to the PSS board, which was already the trustee for the PSS and the PSSAP. The PSS board was renamed as ARIA and the CSS board was abolished. The bill makes a number of technical amendments to reflect these changes.

From 1 July 2008, the superannuation guarantee requirements will be changed to simplify the earnings base of an employee for superannuation guarantee purposes. This will replace the existing arrangements which allow earnings bases that existed before 21 August 1991 to be used to calculate an employer’s superannuation guarantee obligations in respect of an employee. From 1 July 2008 those employers will be required to calculate their superannuation guarantee liability using an employee’s ordinary time earnings, in line with the requirements applying to other employers.

Contributions and benefits for Australian government employees whose superannuation is provided under the Superannuation Act 1976 and the Superannuation (Productivity Benefit) Act 1988 are currently calculated using an earnings base that existed before 21 August 1991. The bill includes amendments to allow those acts to provide minimum benefits that will comply with the changes to the superannuation guarantee earning base from 1 July 2008, and any future changes to the superannuation guarantee.

The amendments to the Superannuation Act 1976, in respect of the CSS, provide for the necessary changes to be made to the CSS by regulation. Those changes will be made once regulations have been made under the Superannuation Guarantee (Administration) Act 1992 to apply the 2008 changes to the earnings base to defined benefit schemes like the CSS. This regulation power is necessary to ensure that the changes to the CSS can be in place by 1 July 2008. The changes made to the CSS by regulation will subsequently be inserted into the Superannuation Act 1976 when an opportunity arises after that time to make amendments to that act.

ARIA makes periodic determinations of interest in respect of the CSS and the PSS to be applied to members’ accounts. Those rates are published on the scheme website, generally on the business day immediately after the rates become effective. Although these instruments are exempt from the Legislative Instruments Act 2003 the interest determinations for the CSS are required to be gazetted.

The bill amends the Superannuation Act 1976 to remove the requirement that CSS interest rate determinations be gazetted. This will result in consistent arrangements for CSS and PSS interest determinations. ARIA has given an undertaking that the interest rates will continue to be published on the CSS website.

The remaining changes in the bill are of a technical nature. For example, a number of acts which make superannuation arrangements for Australian government employees and members of parliament are to be amended to clarify that certain instruments made under those acts are subject to the Legislative Instruments Act 2003 and continue to be subject to parliamentary scrutiny and possible disallowance. I commend the bill to the House.

Debate (on motion by Mr Crean) adjourned.