House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Finance and Deregulation,Senator The Honourable Penny Wong)

Superannuation Legislation (Consequential Amendments And Transitional Provisions) Bill 2011

Glossary

The following abbreviations and acronyms are used in this Explanatory Memorandum.

Outline

The Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011 (the Bill) is part of a package of three Bills giving effect to Government decisions in 2008 and 2009 to modernise Australian Government superannuation and establish governance arrangements for the Commonwealth superannuation schemes that are effective and consistent with the broader superannuation industry. The other two Bills in the package are:

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the Governance of Australian Government Superannuation Schemes Bill 2011 (Governance Bill), which merges the Australian Reward Investment Alliance (ARIA), the Military Superannuation and Benefits Board (MSB Board) and the Defence Force Retirement and Death Benefits Authority (DFRDB Authority) to form a single trustee body from 1 July 2011

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the ComSuper Bill 2011 (ComSuper Bill), which makes changes to the governance framework for superannuation administration arrangements for the main civilian and military superannuation schemes.

Single Superannuation Trustee

The Governance Bill merges three trustee boards to form a consolidated body to be the trustee of the main civilian and military superannuation schemes. The Governance Bill establishes "Commonwealth Superannuation Corporation" (CSC) as a body corporate with a separate legal identity from the Commonwealth, by continuing in existence the body corporate that was formerly called ARIA.

The Bill includes consequential amendments to a range of legislation to reflect the establishment of CSC as the trustee for the main civilian and military superannuation schemes.

ComSuper

The ComSuper Bill establishes ComSuper as a prescribed agency under the Financial Management and Accountability Act 1997 (FMA Act), and as a statutory agency for the purposes of the Public Service Act 1999 , consisting of a Chief Executive Officer (CEO) as the head of the agency and staff. The functions of the CEO will be to provide administrative services to CSC and manage ComSuper.

The CEO of ComSuper will be responsible for providing administrative services to CSC in respect of nine superannuation schemes. These are:

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the scheme established under the Superannuation Act 1922 (1922 scheme)

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the Commonwealth Superannuation Scheme (CSS)

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the Public Sector Superannuation Scheme (PSS)

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the Public Sector Superannuation Accumulation Plan (PSSAP)

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the Military Superannuation and Benefits Scheme (MSB)

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the Defence Force Retirement and Death Benefits Scheme (DFRDB)

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the Defence Forces Retirement Benefits Scheme (DFRB)

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the Defence Force (Superannuation) (Productivity Benefit) Scheme (DFSPB)

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the scheme provided for under the Papua New Guinea (Staffing Assistance) Act 1973 (PNG).

Currently, the Commissioner for Superannuation provides administrative services in relation to all of these schemes. In those cases where a scheme has a separate trustee (that is, all schemes except for the 1922 scheme and the PNG, which are under the trusteeship of the Commissioner for Superannuation), the Commissioner for Superannuation provides the administrative services to the relevant trustee.

From 1 July 2011, the CEO of ComSuper will be responsible for providing administrative services in relation to all of the nine schemes to CSC, which will be the trustee.

The Bill includes consequential amendments to a range of legislation to reflect the abolition of the position of Commissioner for Superannuation and the establishment of ComSuper as a statutory agency with a CEO.

The Commissioner for Superannuation is also currently responsible for making decisions under the Governor-General Act 1974 in relation to the payment of death benefits in certain circumstances. The Bill transfers responsibility for these decisions to the Finance Secretary from 1 July 2011.

Transitional Provisions

The Bill also contains a number of transitional provisions to deal with matters arising from the amendments in the Bill, the Governance Bill and the ComSuper Bill.

Other

As part of modernising civilian and military superannuation arrangements the Bill also makes amendments to:

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facilitate public sector employees being able to consolidate their superannuation savings under the management of CSC, should a decision be made to allow this in the future. Any decision in this regard would be subject to Parliamentary scrutiny

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allow for Parliamentary scrutiny of Deeds made under the Military Superannuation and Benefits Act 1991 (MSB Act), which is consistent with the requirement applying to Deeds made under the Superannuation Act 1990 (1990 Act)

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validate the past payment of fees made by the trustee boards to the

Auditor-General for the audit of financial statements related to the respective superannuation funds.

Financial Impact Statement

The Bill has no financial impact.