explanatory statement

Issued by the authority of the Minister for Finance and Administration

Superannuation Act 2005

Declaration under paragraph 8(2)(b)

Superannuation (PSSAP) Approved Authority Exclusion Amendment Declaration 2006

The Superannuation Act 2005 (the Act) makes provision for and in relation to a superannuation scheme to be known as the Public Sector Superannuation Accumulation Plan (PSSAP) for public sector employees and certain other persons.  Under the Act an employer of an ordinary employer-sponsored member of PSSAP must pay employer superannuation contributions to the PSSAP Fund for that member in accordance with the Rules within the meaning of the Act.

Section 5 of the 2005 Act provides that a public sector employee for the purpose of the 2005 Act includes a person who is employed by an approved authority.  

Section 8 of the 2005 Act sets out the situations in which an authority or body is an approved authority.  Subsection 8(2) provides that an authority or body is an approved authority if it was, at the end of 30 June 2005, an approved authority for the purposes of the Superannuation Act 1990 (1990 Act) and is not specified in a written declaration made by the Minister for Finance and Administration (the Minister) under paragraph 8(2)(b).

Section 13 of the Act specifies the various persons who are eligible to become members of the PSSAP.  Paragraph 13(1)(a) provides that a public sector employee is eligible to become a PSSAP member.  Paragraph 13(1)(b) provides that the Minister may declare a person to be eligible to become a PSSAP member.

At 30 June 2005 the Australian Capital Territory was an approved authority for the 1990 Act and therefore became an approved authority for the purposes of PSSAP from 1 July 2005.

The ACT Government announced, as part of its 2006 Budget, that all new entrants to the ACT public service would be eligible for an employer superannuation contribution of 9 percent. (This would increase to 10 percent if the employee contributes at least 3 percent).  To give effect to the ACT Government’s decision a package of changes is required to instruments made under the 2005 Act to exclude new ACT Government employees from PSSAP membership, as PSSAP has a mandated minimum employer superannuation contribution rate of 15.4 percent.

The Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2006 along with the Superannuation (PSSAP) Approved Authority Exclusion Amendment Declaration 2006 facilitates the superannuation arrangements announced by the ACT Government.

The Superannuation (PSSAP) Approved Authority Exclusion Declaration 2005 (the Principal Declaration) excludes bodies as approved authorities under paragraph 8(2)(b) of the Act.

The purpose of this Declaration cited as the Superannuation (PSSAP) Approved Authority Exclusion Amendment Declaration 2006 (Amending Declaration) is to amend Schedule 1 of the Principal Declaration.  This provides that the Australian Capital Territory is no longer an approved authority for the purpose of the 2005 Act. 

The superannuation arrangements for existing ACT Government employees would not be affected by the changes made by the Amending Declaration as PSSAP membership for existing ACT Government employees employed immediately before the Amending Declaration commences, and who continue in that employment from that date, is provided for by the Superannuation (PSSAP) Membership Eligibility (Inclusion) Amendment Declaration 2006 made under paragraph 13(1)(b) of the 2005 Act.

The Amending Declaration commences on the day after it is registered on the Federal Register of Legislative Instruments.

As the Amending Declaration affects the status of the ACT Government as an approved authority under the 2005 Act, the ACT Government was consulted on the changes announced by the Chief Minister.  Any other consultation was undertaken by the ACT Government. 

Further details of this Amending Declaration are in the attachment.

The Amending Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003 and is subject to disallowance but not sunsetting.

ATTACHMENT

SUPERANNUATION (pssap) approved authority exclusion Amendment declaration 2006

Clause 1 - Name of Declaration

This clause provides that the name of the Declaration is the Superannuation (PSSAP) Approved Authority Exclusion Amendment Declaration 2006.

Clause 2 - Commencement

This clause provides for the Declaration to commence on the day after it is registered.

Clause 3 – Amendments to the Superannuation (PSSAP) Approved Authority Exclusion Declaration 2005

This clause omits Schedule 1 of the Superannuation (PSSAP) Approved Authority Exclusion Declaration 2005 which specifies those authorities or bodies declared in accordance with paragraph 8(2)(b) and substitutes a new Schedule 1.  The effect of the new Schedule 1 is to provide that the Australian Capital Territory is not an approved authority for the purposes of the 2005 Act.