Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Parliamentary Contributory Superannuation Act 1948 to remove excessive superannuation arrangements for federal politicians, and for related purposes
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Registered 18 May 2009
Introduced Senate 14 May 2009

 

2008‑2009

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Presented and read a first time

 

 

 

 

 

Parliamentary Superannuation Amendment (Removal of Excessive Super) Bill 2009

 

No.      , 2009

 

(Senator Fielding)

 

 

 

A Bill for an Act to amend the Parliamentary Contributory Superannuation Act 1948 to remove excessive superannuation arrangements for federal politicians, and for related purposes

  

  

  


Contents

1............ Short title............................................................................................ 1

2............ Commencement.................................................................................. 1

3............ Objects of Act.................................................................................... 1

4............ Schedule(s).......................................................................................... 2

Schedule 1—Amendment of the Parliamentary Contributory Superannuation Act 1948   3

Part 1—Commuted benefits                                                                                          3

Part 2—Superannuation arrangements from 1 July 2009                                  6

 


A Bill for an Act to amend the Parliamentary Contributory Superannuation Act 1948 to remove excessive superannuation arrangements for federal politicians, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Parliamentary Superannuation Amendment (Removal of Excessive Super) Act 2009.

2  Commencement

                   This Act commences on the day on which it receives the Royal Assent.

3  Objects of Act

                   The objects of this Act are:

                     (a)  to terminate the retirement scheme constituted by the Parliamentary Contributory Superannuation Act 1948 (the Parliamentary Contributory Superannuation Scheme); and

.                    (b)  to require existing members of the Parliamentary Contributory Superannuation Scheme to choose a complying superannuation fund in line with the arrangements applying to new parliamentarians since 2004, under the Parliamentary Superannuation Act 2004; and

                     (c)  to require the Commonwealth to pay into the complying superannuation funds chosen by existing members their respective commuted superannuation benefits and ongoing superannuation contributions.

4  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


Schedule 1Amendment of the Parliamentary Contributory Superannuation Act 1948

Part 1Commuted benefits

1  Subsection 4(1)

Insert:

complying superannuation fund has the same meaning as in the Parliamentary Superannuation Act 2004.

RSA has the same meaning as in the Retirement Savings Accounts Act 1997.

termination date means 1 July 2009.

2  After section 18B

Insert:

18C  Calculation of accrued benefits by 30 June 2009

             (1)  The Trust must calculate the monetary value of the commuted benefits under this Act accruing to each member of the retirement scheme constituted by this Act as at 30 June 2009, as if each member ceased to be entitled to a parliamentary allowance on that date and was therefore entitled to a retiring allowance as at that date.

             (2)  Calculations under subsection (1) must take into account all matters that would be taken into account in calculating benefits under section 18.

             (3)  The Trust must by 30 June 2009 provide to each member a statement of his or her commuted benefits calculated under subsection (1).

18D  Closing off contributions to retirement scheme constituted by this Act

                   A member is not entitled or required to make contributions to the retirement scheme constituted by this Act after the payment of parliamentary allowance received by the member on 30 June 2009.

3  After Part V

Insert:

Part VAAAPayment of commuted benefits on termination date

22BA  Meaning of fund—includes schemes and accounts

                   In this Part:

fund includes a scheme or account.

22BB  Members to choose funds for payment of commuted benefits

             (1)  A person who is a member of the retirement scheme constituted by this Act on 31 May 2009 may by 21 June 2009 choose a fund (the chosen fund) to be the fund to which the member’s commuted benefits calculated under subsection 18C(1) (the transfer amount) are to be paid.

             (2)  The chosen fund must, at the time the choice is made, be either:

                     (a)  a complying superannuation fund, other than a self managed superannuation fund; or

                     (b)  an RSA.

             (3)  There can be only one chosen fund in relation to a member for the purposes of this section.

             (4)  A choice of a fund must be made by notice in writing (a choice notice) signed by the member.

             (5)  The notice must:

                     (a)  specify the name of, and contact details for, the chosen fund; and

                     (b)  contain such other information (if any) as is required by the regulations.

             (6)  The notice must be accompanied by evidence that the chosen fund will accept the transfer amount.

             (7)  The notice must be given to the Trust.

             (8)  If a member fails to choose a fund under this section by 21 June 2009, the transfer amount will be paid to the default fund declared under section 22BC.

22BC  Declaration of the default fund

             (1)  The Minister for Finance must, by notice in writing signed by the Minister, declare that a fund or scheme is the default fund for the purposes of this Part. At the time the declaration is made, the fund or scheme must be a complying superannuation fund (other than a self managed fund).

             (2)  The Minister must make a declaration under subsection (1) within 7 days after the commencement of this section.

22BD  Transfer amounts to be paid by Commonwealth

                   Payments of transfer amounts provided for by this Part must be made by the Commonwealth.

22BE  Transfer amounts to be paid on 1 July 2009

                   The Commonwealth must pay the transfer amount of a member to the fund chosen by the member under section 22BB or the default fund declared under section 22BC, as the case may be, on 1 July 2009.

Part 2Superannuation arrangements from 1 July 2009

4  After Part VI

Insert:

Part VIISuperannuation arrangements from 1 July 2009 for persons who on 30 June 2009 are members of retirement scheme constituted by this Act as at that date

Division 1Preliminary

30  Persons to whom this Part applies

                   This Part applies to a person in respect of a month from and including July 2009 if the person:

                     (a)  on 30 June 2009 is a member of the retirement scheme constituted by this Act as at that date; and

                     (b)  is entitled to a parliamentary allowance for the relevant month or for part of the relevant month.

31  Definitions

             (1)  In this Part:

basic contributions fund, in relation to a member at a particular time, means:

                     (a)  if a choice notice given by the member is in force under Division 3 of this Part at that time—the fund that is, at that time, specified in the notice as the chosen fund; or

                     (b)  otherwise—the fund or scheme that is, at that time, the default fund under Division 4 of this Part.

member means a person who on 30 June 2009 is a member of the retirement scheme constituted by this Act as at that date.

             (2)  Subject to subsection (1), an expression used in this Part has the same meaning as it has in the Parliamentary Superannuation Act 2004.

Division 2Commonwealth’s obligations to make contributions

32  The Commonwealth’s obligations to make contributions

             (1)  If this Part applies to the member in respect of a month, the Commonwealth must make a contribution, in respect of the member, to the basic contributions fund of the member.

Note:          The basic contributions fund of the member is defined in section 31. It will be either a fund, scheme or account chosen by the member under Division 3 or the default fund under Division 4.

             (2)  Subject to subsections (3) and (4), the amount of the contribution is an amount equal to 15.4% of the sum of:

                     (a)  the amount of parliamentary allowance to which the person is entitled in respect of the month; and

                     (b)  the amount (if any) of salary to which the member is entitled because he or she was a Minister of State for some or all of the month; and

                     (c)  the amount (if any) of allowance by way of salary to which the member is entitled because he or she was an office holder for some or all of the month.

             (3)  For the purpose of paragraph (2)(a), any reduction of the member’s entitlement to parliamentary allowance under Division 2 of Part 1 of Schedule 3 to the Remuneration and Allowances Act 1990 (salary sacrifice) is to be disregarded.

             (4)  An amount of parliamentary allowance, salary, or allowance by way of salary, is not to be taken into account under subsection (2) to the extent (if any) that it does not count as salary or wages for the purposes of section 19 of the Superannuation Guarantee (Administration) Act 1992.

             (5)  If:

                     (a)  this Part applies to the member in respect of one or more of the months in a quarter (as defined in the Superannuation Guarantee (Administration) Act 1992); and

                     (b)  the Commonwealth makes contributions as required by this section in respect of the member and the month or months in the quarter in respect of which this Part applies; and

                     (c)  the Commonwealth would otherwise have an individual superannuation guarantee shortfall, in respect of the member and the quarter, for the purposes of the Superannuation Guarantee (Administration) Act 1992;

then, for the purposes of the Superannuation Guarantee (Administration) Act 1992, the Commonwealth is, by making those contributions, taken to have reduced its charge percentage for the quarter to nil under whichever of section 22 or 23 of that Act is applicable.

             (6)  Despite anything else in this section, the Commonwealth is not required by this section to pay contributions to the person’s basic contributions fund if, under the Superannuation Industry (Supervision) Act 1993 (including the regulations under that Act), the basic contributions fund is not permitted to receive those contributions.

Division 3Choice of funds

33  Meaning of fund—includes schemes and accounts

                   In this Division:

fund includes a scheme or account.

34  When may a member choose a fund?

                   A member to whom this Part applies may choose a fund as described in section 35 at any time on or after the day the Parliamentary Superannuation Legislation Amendment (New Superannuation Arrangements) Act 2009 is assented to.

35  The nature of the choice

             (1)  The member may choose a fund (the chosen fund) to be the fund to which contributions are made under this Part in respect of the member.

Note:          The choice can be varied or revoked (see sections 38 and 39).

             (2)  The chosen fund must, at the time the choice is made, be either:

                     (a)  a complying superannuation fund, other than a self managed superannuation fund; or

                     (b)  an RSA.

             (3)  There can only be one chosen fund at any particular time in relation to the member.

36  How to make a choice

             (1)  A choice of a fund must be made by notice in writing (a choice notice) signed by the member.

             (2)  The notice must:

                     (a)  specify the name of, and contact details for, the chosen fund; and

                     (b)  specify the date (the start date) from which the notice is to have effect, being 1 July 2009, the date the notice is given or a later date, as the case may be; and

                     (c)  contain such other information (if any) as is required by the regulations.

             (3)  The notice must be accompanied by evidence that the chosen fund will accept contributions under this Part.

             (4)  The notice must be given to the administering authority.

37  Duration of a choice notice

                   If sections 34, 35 and 36 are complied with, a choice notice comes into force on the start date for the notice and remains in force until whichever of the following occurs first:

                     (a)  the contribution payable under this Part in respect of the month in which the member next ceases to be entitled to parliamentary allowance has been paid; or

                     (b)  a revocation of the notice takes effect (see section 39); or

                     (c)  the chosen fund ceases to exist; or

                     (d)  the chosen fund ceases to accept contributions under this Part; or

                     (e)  the chosen fund ceases to be a complying superannuation fund or an RSA; or

                      (f)  the chosen fund becomes a self managed superannuation fund.

38  Variation of a choice notice

             (1)  The member may vary a choice notice he or she has given by notice in writing signed by the member and given to the administering authority.

             (2)  The only variations that are permitted are:

                     (a)  to change the chosen fund to another fund that is, at the time the notice is given:

                              (i)  a complying superannuation fund, other than a self managed superannuation fund; or

                             (ii)  an RSA; or

                     (b)  to change the start date to a later date (but only if the start date has not already occurred).

             (3)  The notice of variation must specify a date (the variation date) from which the variation is to take effect, being the date on which the notice is given or a later date.

             (4)  A notice of variation to change the chosen fund to another complying superannuation fund or RSA (the new fund) must:

                     (a)  specify the name of, and contact details for, the new fund; and

                     (b)  be accompanied by evidence that the new fund will accept contributions under this Part.

             (5)  If the notice of variation complies with this section, it varies the choice notice accordingly (subject to any later variations) with effect from the variation date.

39  Revocation of a choice notice

             (1)  The member may revoke a choice notice he or she has given by notice in writing signed by the member and given to the administering authority.

             (2)  The notice of revocation must specify a date from which the revocation is to take effect, being the date on which the notice of revocation is given or a later date.

             (3)  If the notice of revocation complies with this section, the revocation takes effect on the specified date.

40  Obligation to notify member of right to choose a fund

                   Within 28 days after the day the Parliamentary Superannuation Legislation Amendment (New Superannuation Arrangements) Act 2009 is assented to, the administering authority must cause each member to be given a written notice containing the following information:

                     (a)  a statement that the member may choose a complying superannuation fund (other than a self managed fund) or an RSA as the fund to which contributions in respect of the member will be paid under this Part;

                     (b)  a statement to the effect that if the member does not choose a fund under section 36 by 31 July 2009, the contributions will be paid to the fund chosen by the member under section 22BB, and if the member has not chosen a fund under that section, the contributions will be paid to the fund that is, from time to time, the default fund declared under section 42;

                     (c)  such other information (if any) as is required by the regulations.

Division 4The default fund

41  Failure to choose a fund

             (1)  If a member fails to choose a fund under section 36 before 31 July 2009, the contributions in respect of the member under this Part will be paid to the fund chosen by the member under section 22BB.

             (2)  If the member has not chosen a fund under section 36 or 22BB, the contributions will be paid to the fund that is at that time the default fund declared under section 42.

42  Declaration of the default fund

             (1)  The Minister may, by notice in writing signed by the Minister, declare that a fund or scheme is the default fund for the purposes of this Part. At the time the declaration is made, the fund or scheme must be a complying superannuation fund (other than a self managed fund).

             (2)  A declaration under subsection (1) must specify the date of effect of the declaration. The specified date may be the day on which the declaration is signed, or an earlier or later day.

             (3)  The Minister must make a declaration under subsection (1) as soon as practicable after the commencement of this section.

             (4)  The Minister must ensure that there is only one default fund at any one time.

             (5)  The Minister may, by notice in writing signed by the Minister, revoke a declaration made under subsection (1) at any time.

             (6)  A revocation under subsection (5) must specify the date of effect of the revocation. The specified date may be the day on which the notice is signed, or an earlier or later day.

             (7)  If the Minister, under subsection (5), revokes a declaration under subsection (1), the Minister must make another declaration under subsection (1) which takes effect immediately after the revocation takes effect.