Explanatory Memorandum
(Circulated by the authority of the Minister for Finance and Administration, Senator the Hon Nick Minchin)Schedule 2 - Amendment of the Superannuation Guarantee (Administration) Act 1992
8. This schedule amends the SG Act as a consequence of the separation of the PSSAP from the PSS by the 2005 Bill.
9. The amendments to the SG Act will provide that employers contributing to the PSSAP in respect of their employees are taken to comply with the choice of fund requirements under that Act until 30 June 2006. Without the establishment of the PSSAP by the PSSAP Trust Deed as a separate accumulation superannuation scheme, employers participating in the PSSAP would be covered by section 32C(4) of the SG Act which provides that contributions made to the PSS are taken to comply with the choice of fund requirements under the SG Act. From 1 July 2006, these employers will have to meet the choice of fund requirements in accordance with subsections 32C(1), 32C(2) or 32C(6) of the SG Act in respect of members of the PSSAP and new employees who do not join the PSS or the CSS.
10. Item 1 amends subsection 6(1) of the interpretation section of the SG Act to include a definition "PSSAP". The term "PSSAP" is included in the new subsection 32C(4) of the SG Act inserted by item 2 of this schedule. The PSSAP is the Public Sector Superannuation Accumulation Plan established by Trust Deed under the 2005 Bill.
11. Item 2 inserts subsection 32C(4A) into the SG Act. Section 32C outlines the circumstances in which employer contributions satisfy the choice of fund requirements under that Act. The new subsection provides that employers who contribute to the PSSAP in respect of an employee are taken to comply with the choice of fund requirements under the SG Act for that employee until 1 July 2006. From 1 July 2006, these employers will have to meet the choice requirements under subsections 32C(1), 32C(2) or 32C(6) of the SG Act, that is, by contributing to the employee's chosen fund or if a fund is not chosen, an eligible choice fund for the employer or by making contributions in respect of the employee as provided for in an Australian Workplace Agreement or a certified agreement under the Workplace Relations Act 1996 or a certified agreement under the Industrial Relations Act 1988.