Explanatory Memorandum
(Circulated by the authority of the Minister for Finance and Administration, Senator the Hon Nick Minchin)Notes on clauses
1. Clause 1 provides for the short title of the Act to be the Superannuation (Consequential Amendments) Act 2005.
2. Clause 2 sets out a table containing the commencement information for each clause and schedule of the Bill.
3. Item 1 of the table provides that clauses 1, 2 and 3 of the Bill and any provision not covered elsewhere in the table will commence on the day the Bill receives the Royal Assent.
4. Item 2 of the table provides that Part 1 of Schedule 1 will commence at the same time as Part 2 of the 2005 Bill. Part 1 of Schedule 1 clarifies the functions and responsibilities of the PSS Board under the 1990 Act. Part 2 of the 2005 Bill provides for the PSSAP Trust Deed to be made establishing the PSSAP as a separate accumulation superannuation scheme and setting out the functions and powers of the PSS Board for that scheme. These amendments are necessary as a consequence of the establishment of the separate superannuation scheme to clearly define the PSS Board's responsibilities in respect of the PSS as opposed to the PSSAP. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme.
5. Item 3 of the table provides that Part 2 of Schedule 1 will commence from the later of 1 July 2005 or the commencement of Part 2 of the 2005 Bill. Part 2 of Schedule 1 amends the 1990 Act to close membership of the PSS to new employees and office holders. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme providing membership for these new employees and office holders. In that event new employees will continue to join the PSS from 1 July 2005 as members of the accumulation sub plan provided for in the PSS Trust Deed.
6. Item 4 of the table provides that Part 3 of Schedule 1 will commence on the day the Bill receives the Royal Assent. Part 3 of Schedule 1 contains a minor technical amendment to the 1990 Act which is not linked to the creation of the PSSAP.
7. Item 5 of the table provides that Schedule 2 will commence immediately after the later of the commencement of Part 3A of the SG Act and Part 2 of the 2005 Bill. Schedule 2 will amend the SG Act to allow contributions to the PSSAP to constitute compliance with the choice of fund requirements under Part 3A of the SG Act until 1 July 2006. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme. If Part 2 of the 2005 Bill does not commence employers will continue to contribute to the PSS which meets the choice of fund requirements under section 32C(4) of the SG Act.
8. Item 6 of the table provides that Schedule 3 will commence at the same time as Part 2 of the 2005 Bill or 1 July 2005 whichever is later. Schedule 3 closes the Productivity Benefit Act to new employees from 1 July 2006 and facilitates choice of fund arrangements under the SG Act to PSSAP members from as early as 1 July 2005. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme. The choice of fund arrangements are not compatible with the mandatory membership arrangements of the PSS.
9. Item 6 of the table provides that Schedule 4 will commence at the same time as Part 2 of the 2005 Bill or 1 July 2005 whichever is later. Schedule 4 amends the Supervisory Mechanisms Act to allow for the provision of superannuation benefits under the 2005 Bill and allow employers to offer choice of fund arrangements as provided for in the SG Act. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme as the choice of fund arrangements are not specifically provided for within the existing superannuation arrangements.
10. Item 6 of the table provides that Schedule 5 will commence at the same time as Part 2 of the 2005 Bill or 1 July 2005 whichever is later. Schedule 5 amends the Governor-General Act to provide minimum Superannuation Guarantee superannuation benefits from 1 July 2006 in respect of a Governor-General. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme. The PSSAP makes provision for choice of fund arrangements under the SG Act for PSSAP members and persons eligible to be PSSAP members and as a result allows the closure of the Productivity Benefit Act from 1 July 2006. The commencement of these amendments before 1 July 2006 will facilitate the making of the relevant determination for calculating the benefit which will apply from 1 July 2006.
11. Item 6 of the table also provides that Schedule 6 will commence at the same time as Part 2 of the 2005 Bill or 1 July 2005 whichever is later. Schedule 6 amends the Judges' Pensions Act to provide minimum Superannuation Guarantee superannuation benefits from 1 July 2006 in respect of a Judge. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme. The PSSAP makes provision for choice of fund arrangements under the SG Act for PSSAP members and as a result allows the closure of the Productivity Benefit Act from 1 July 2006. The commencement of these amendments before 1 July 2006 will facilitate the making of the relevant determination for calculating the benefit, which will apply from 1 July 2006.
12. Item 6 of the table provides that Schedule 7 will commence at the same time as Part 2 of the 2005 Bill or 1 July 2005 whichever is later. Schedule 7 amends the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 to ensure that benefits paid under the 2005 Bill will constitute taxable benefits for the purposes of the relevant tax legislation. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme.
13. Item 7 of the table provides that Schedule 8 will commence at the same time as Part 2 of the 2005 Bill. Schedule 8 amends the PSS Trust Deed to clarify the functions and powers of the PSS Board set out in that Trust Deed are only in relation to the PSS. However it will not commence if Part 2 of the 2005 Bill does not commence establishing the PSSAP as a separate accumulation superannuation scheme.
14. Subclause 2(2) of the Bill provides for additional information to be included in the table in Subclause 2(1) on the passage of the Bill through the Parliament, such as the date of the Royal Assent and the dates of commencement of the different parts of the Bill.
15. Clause 3 outlines the application of the schedules to amend or repeal certain provisions in the Acts specified. It also provides for the amendment of the PSS Trust Deed under the 1990 Act by Schedule 8, while still allowing future amendments to the Trust Deed under that Act without restriction.