House of Representatives

Explanatory Memorandum

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

SCHEDULE 2 - TRANSITIONAL PROVISIONS

Part 1 - Preliminary

Item 1 - Definitions

250. Item 1 of Schedule 2 provides definitions of certain terms that are used for the purposes of Schedule 2 to the Bill.

Part 2 - Assets, liabilities and legal proceedings

Items 2 to 5 - Vesting of assets and liabilities

251. Item 2 of Schedule 2 provides that the assets of the MSB Board and the Authority immediately before 1 July 2011 are to be vested in CSC from 1 July 2011, without any conveyance, transfer or assignment. CSC becomes the successor in law in relation to these assets. The reference to whether the assets are in Australia or elsewhere is intended to assist in demonstrating ownership of the assets for the purposes of relevant foreign laws.

252. Item 3 of Schedule 2 provides that the liabilities of the MSB Board and the Authority immediately before 1 July 2011 are to be vested in CSC from 1 July 2011, without any conveyance, transfer or assignment. CSC becomes the successor in law in relation to these liabilities. The reference to whether the liabilities are in Australia or elsewhere is intended to assist in demonstrating ownership of the liabilities for the purposes of relevant foreign laws.

253.The purpose of item 4 of Schedule 2 is to enable transfers of land that is vested in CSC under Part 2 of Schedule 2 to be registered and otherwise dealt with in the way that those matters would ordinarily be dealt with.

254. Subitem 4(1) of Schedule 2 provides for item 4 to apply where land vests in CSC under Part 2 of Schedule 2 and a certificate, signed by the Chair, has been lodged with a land registration official. The certificate is to identify the land and state that the land has become vested in CSC.

255. Subitem 4(2) of Schedule 2 allows a land registration official to deal with, and give effect to, the certificate and register the matter in a way that transfers are normally registered.

256.The purpose of item 5 of Schedule 2 is to enable transfers of assets (other than land) vested in CSC under Part 2 of Schedule 2 to be registered and otherwise dealt with in the way that transfers of assets of that sort would ordinarily be dealt with.

257. Subitem 5(1) of Schedule 2 provides for item 5 to apply where an asset (other than land) vests in CSC under Part 2 of Schedule 2 and a certificate, signed by the Chair, has been lodged with an official responsible for keeping an assets register (an assets official). The certificate is to identify the asset and state that the asset has become vested in CSC.

258. Subitem 5(2) of Schedule 2 allows an assets official to deal with, and give effect to, the certificate and make such entries as are necessary in the assets register relating to assets of that kind.

Item 6 - Legal proceedings

259. Subitems 6(1 ), ( 2) and (3) of Schedule 2 provide that if the MSB Board, the Authority or the Commissioner for Superannuation (in proceedings related to the 1922 scheme, the DFSPB or the PNG) respectively were a party to proceedings pending in any court or tribunal immediately before 1 July 2011, CSC is substituted as a party in their place from 1 July 2011. These subitems are intended to ensure that all pending proceedings to which the MSB Board, the Authority or the Commissioner for Superannuation (in relation to the 1922 scheme or the PNG) are a party continue, under the name CSC, on their abolition.

260. Subitem 6(4) of Schedule 2 provides that if the Commissioner for Superannuation were a party to proceedings pending in any court or tribunal immediately before 1 July 2011, other than in relation to the 1922 scheme or the PNG, the CEO of ComSuper is substituted as a party in his or her place from 1 July 2011. This subitem is intended to ensure that all pending proceedings to which the Commissioner for Superannuation is a party, other than in relation to the 1922 scheme or the PNG, continue, under the name of the CEO of ComSuper.

261. Paragraph 6(5 )( a) of Schedule 2 enables the Minister to determine, in writing, that subitem 6(3) applies as if the reference to CSC in that subitem is a reference to the CEO of ComSuper. In this event, the CEO of ComSuper, rather than CSC, would replace the Commissioner for Superannuation as a party to the legal proceedings.

262. Paragraph 6(5 )( b) of Schedule 2 enables the Minister to determine, in writing, that subitem 6(4) applies as if the reference to the CEO of ComSuper in that subitem is a reference to CSC. In this event, CSC, rather than the CEO of ComSuper, would replace the Commissioner for Superannuation as a party to the legal proceedings.

263. Subitem 6(6) of Schedule 2 clarifies that a determination made by the Minister under subitem 6(5) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Part 3 - References to, and things done by or in relation to, certain persons

Division 1 - Provisions relating to the MSB Board

Item 7 - References in Acts and instruments to the MSB Board

264. Subitem 7(1) of Schedule 2 provides for references to the MSB Board in Acts or instruments that are in force immediately before 1 July 2011 to have effect as if the references were to CSC. This item is intended to ensure that all relevant legislation and instruments continue to operate appropriately upon the transfer of responsibilities and functions of the MSB Board to CSC on 1 July 2011.

265. Subitem 7(2) of Schedule 2 enables the Minister to vary the application of subitem 7(1) so that:

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it does not apply to a specified reference to the MSB Board or

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a specified reference to the MSB Board is treated as if it were a reference to ComSuper or

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a specified reference to the MSB Board is treated as if it were a reference to the CEO of ComSuper.

266. Subitem 7(3) of Schedule 2 enables the regulations to provide that an instrument containing a reference specified in a determination made under paragraph 7(2)(a) applies from 1 July 2011 as though the reference were to a person or body other than CSC, ComSuper or the CEO of ComSuper.

267. Subitem 7(4) of Schedule 2 clarifies that a determination under subitem 7(2) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Item 8 - Operation of laws in relation to the MSB Board

268. Subitem 8(1) of Schedule 2 provides that, for the purposes of the operation of any law of the Commonwealth after 1 July 2011, anything done by, or in relation to, the MSB Board before that date is taken to have been done by, or in relation to, CSC. This item is intended to ensure that anything done by, or in relation to, the MSB Board does not lapse after the transfer of its responsibilities and functions to CSC on 1 July 2011.

269. Subitem 8(2) of Schedule 2 provides that things taken to be done by CSC under subitem 8(1), under a provision amended by the Bill, continue in effect from 1 July 2011 without changing the time when the thing was done.

270. Subitem 8(3) of Schedule 2 enables the Minister to make a determination, in writing, which varies the application of subitem 8(1) so that it:

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does not apply in relation to a thing done by, or in relation to, the MSB Board or

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applies as if the reference to CSC were a reference to ComSuper or

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applies as if the reference to CSC were a reference to the CEO of ComSuper.

271. Subitem 8(4) of Schedule 2 enables the regulations to provide for a thing specified in a determination under paragraph 8(3)(a) to be taken as having been done by, or in relation to, a person other than CSC, ComSuper or the CEO of ComSuper.

272. Subitem 8(5) of Schedule 2 clarifies that a determination under subitem 8(3) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Division 2 - Provisions relating to the Authority

Item 9 - References in Acts and instruments to the Authority

273. Item 9 of Schedule 2 sets out arrangements for the treatment of references to the Authority in Acts and instruments which are the same as those that apply to references to the MSB Board under item 7 of Schedule 2.

Item 10 - Operation of laws in relation to the Authority

274. Item 10 of Schedule 2 sets out arrangements for the operation of laws of the Commonwealth in relation to things done by the Authority prior to 1 July 2011, which are the same as those that apply to things done by the MSB Board prior to 1 July 2011 under item 8 of Schedule 2.

Division 3 - Provisions relating to the Commissioner for Superannuation

Item 11 - References in Acts and instruments to the Commissioner for Superannuation

275. Subitem 11(1) of Schedule 2 provides for references to the Commissioner for Superannuation in Acts (other than the Governor-General Act 1974 or the 1922 Act) or regulations that are in force immediately before 1 July 2011 to have effect as if the references were to CSC. This item is intended to ensure that all relevant legislation and instruments continue to operate appropriately upon the transfer of certain responsibilities and functions of the Commissioner for Superannuation to CSC on 1 July 2011.

276. Subitem 11(2) of Schedule 2 provides for references to the Commissioner for Superannuation in instruments (other than regulations or instruments of delegation) that are in force immediately before 1 July 2011 to have effect as if the references were to the CEO of ComSuper. This item is intended to ensure that all relevant instruments continue to operate appropriately upon the transfer of certain responsibilities and functions of the Commissioner for Superannuation to the CEO of ComSuper on 1 July 2011.

277. Subitem 11(3) of Schedule 2 provides for the Defence Force (Superannuation ) ( Productivity Benefit) Determination 1988 , as in force immediately before commencement, to have effect from commencement as if the reference to the Commissioner for Superannuation were a reference to CSC.

278. Subitem 11(4) of Schedule 2 enables the Minister to vary the application of subitem 11(1) so that:

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it does not apply to a specified reference to the Commissioner for Superannuation or

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a specified reference to CSC is treated as if it were a reference to ComSuper or

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a specified reference to CSC is treated as if it were a reference to the CEO of ComSuper.

279. Subitem 11(5) of Schedule 2 enables the Minister to vary the application of subitem 11(2) so that:

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it does not apply to a specified reference to the Commissioner for Superannuation or

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a specified reference to the CEO of ComSuper is treated as if it were a reference to ComSuper or

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a specified reference to the CEO of ComSuper is treated as if it were a reference to CSC.

280. Subitem 11(6) of Schedule 2 enables the regulations to provide that an Act or instrument containing a reference specified in a determination made under paragraph 11(4)(a) or (5)(a) applies from 1 July 2011 as though the reference were to a person or body other than CSC, ComSuper or the CEO of ComSuper.

281. Subitem 11(7) of Schedule 2 clarifies that a determination under subitem 11(4) or 11(5) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Item 12 - Operation of laws in relation to the Commissioner for Superannuation

282. Subitem 12(1) of Schedule 2 provides that, for the purposes of the operation of any law of the Commonwealth after 1 July 2011, anything done by, or in relation to, the Commissioner for Superannuation in relation to the 1922 scheme, the DFSPB or the PNG before that date is taken to have been done by, or in relation to, CSC. This subitem is intended to ensure that anything done by, or in relation to, the Commissioner for Superannuation does not lapse after the transfer of certain responsibilities and functions to CSC on 1 July 2011.

283. Subitem 12(2) of Schedule 2 provides that, for the purposes of the operation of any law of the Commonwealth after 1 July 2011, anything done by, or in relation to, the Commissioner for Superannuation in relation to the Governor-General Act 1974 before that date is taken to have been done by, or in relation to, the Finance Secretary. This subitem is intended to ensure that anything done by, or in relation to, the Commissioner for Superannuation does not lapse after the transfer of certain responsibilities and functions to the Finance Secretary on 1 July 2011.

284. Subitem 12(3) of Schedule 2 provides that, for the purposes of the operation of any law of the Commonwealth after 1 July 2011, anything done by, or in relation to, the Commissioner for Superannuation (other than in relation to the 1922 scheme, the PNG, the DFSPB or the Governor-General Act 1974 ) before that date is taken to have been done by, or in relation to, the CEO of ComSuper. This subitem is intended to ensure that anything done by, or in relation to, the Commissioner for Superannuation does not lapse after the transfer of certain responsibilities and functions to the CEO of ComSuper on 1 July 2011.

285. Subitem 12(4) of Schedule 2 provides that things taken to be done by CSC, the Finance Secretary, or the CEO of ComSuper under subitems 12(1) to (3), under a provision amended by the Bill, continue in effect from 1 July 2011 without changing the time when the thing was done.

286. Subitem 12(5) of Schedule 2 enables the Minister to make a determination, in writing, which varies the application of subitem 12(1) so that it:

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does not apply in relation to a thing done by, or in relation to, the Commissioner for Superannuation or

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applies as if the reference to CSC in the subitem were a reference to ComSuper or

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applies as if the reference to CSC in the subitem were a reference to the CEO of ComSuper.

287. Subitem 12(6) of Schedule 2 enables the Minister to make a determination, in writing, which varies the application of subitem 12(2) so that it:

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does not apply in relation to a thing done by, or in relation to, the Commissioner for Superannuation or

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applies as if the reference to the Finance Secretary in the subitem were a reference to ComSuper or

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applies as if the reference to the Finance Secretary in the subitem were a reference to the CEO of ComSuper or

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applies as if the reference to the Finance Secretary in the subitem were a reference to CSC.

288. Subitem 12(7) of Schedule 2 enables the Minister to make a determination, in writing, which varies the application of subitem 12(3) so that it:

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does not apply in relation to a thing done by, or in relation to, the Commissioner for Superannuation or

•

applies as if the reference to the CEO of ComSuper in the subitem were a reference to ComSuper or

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applies as if the reference to the CEO of ComSuper in the subitem were a reference to CSC.

289. Subitem 12(8) of Schedule 2 enables the regulations to provide for a thing specified in a determination under paragraph 12(5)(a), (6)(a) or (7)(a) to be taken as having been done by, or in relation to, a person other than CSC, ComSuper, the CEO of ComSuper or the Finance Secretary.

290. Subitem 12(9) of Schedule 2 clarifies that a determination under subitem 12(5), 12(6) or 12(7) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Part 4 - Office holders

Item 13- Trustees of ARIA

291. Item 13 of Schedule 2 provides that a person who is a trustee of ARIA immediately prior to 1 July 2011 ceases holding that office from that date.

292. Item 14 of Schedule 2 provides for the transfer of the current occupant of the role of Commissioner of Superannuation to the new office of CEO of ComSuper on 1 July 2011. It also recognises that the responsibilities of the two positions are fundamentally the same.

Part 5 - Review of decisions

Item 15 - Saving rights of review of decisions

293.The purpose of item 15 of Schedule 2 is to ensure that persons affected by decisions made prior to 1 July 2011 do not lose their right to a review of those decisions as a result of amendments to the relevant enabling legislation to reflect the governance arrangements that apply to their superannuation scheme from that date.

294. Subitem 15(1) of Schedule 2 enables a person affected by a decision made by the Authority or its delegate under certain Acts prior to 1 July 2011, to apply to CSC for a review of the decision. The relevant Acts are the DFRDB Act, the DFRB Act and any Act that relates to retirement benefits for members of the Defence Force and modifies or affects the provisions of the DFRB Act.

295. Subitem 15(2) of Schedule 2 provides for applications to the Administrative Appeals Tribunal for the review of decisions made by the Authority or its delegates under the Acts listed in subitem 15(1) before 1 July 2011. This is subject to the limitation that the period for making such an application must not have expired before 1 July 2011.

296. Subitems 15(3 ), ( 5) and (7) of Schedule 2 are similar to subitem 15(2) and apply, in turn, to decisions made under:

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the Governor-General Act 1974

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the PNG Act

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the 1976 Act, the 1922 Act or regulations made under either of these Acts.

297. Subitems 15(4) and (6) of Schedule 2 are similar to subitem 15(1) and apply, in turn, to decisions made under:

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the PNG Act

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the 1976 Act, the 1922 Act or regulations made under either of those Acts.

Part 6 - Reporting

Items 16 to 18 - Financial statements and other reporting requirements

298.The purpose of items 16 to 18 of Schedule 2 is to ensure that reports (financial or otherwise) which were required, by law, of the MSB Board, the Authority or the Commissioner for Superannuation prior to their abolition will be provided by CSC or the CEO of ComSuper.

299. Subitem 16(1) of Schedule 2 provides that if, immediately before 1 July 2011, a law required the MSB Board to provide a report for a period ending after that date, CSC must provide the report for so much of the period occurring before 1 July 2011.

300. Subitem 16(2) of Schedule 2 provides that if CSC is required to provide a report for part of a period under subitem 15(1), and is also required to provide a similar report for the remainder of the period, CSC may meet the requirements by providing a single report that covers the whole period.

301. Subitem 16(3) of Schedule 2 provides that if the MSB Board was required by law to provide a report for a period that ended before 1 July 2011, and the report has not been provided by that date, CSC must provide the report.

302. Item 17 of Schedule 2 sets out reporting arrangements in relation to the Authority that are similar to those set out in relation to the MSB Board under item 16.

303. Subitem 18(1) of Schedule 2 provides that if, immediately before 1 July 2011, a law required the Commissioner for Superannuation to provide a report related to the 1922 scheme or the PNG for a period ending after that date, CSC must provide the report for so much of the period occurring before 1 July 2011.

304. Subitem 18(2) of Schedule 2 provides that if CSC is required to provide a report for part of a period under subitem 17(1), and is also required to provide a similar report for the remainder of the period, CSC may meet the requirements by providing a single report that covers the whole period.

305. Subitem 18(3) of Schedule 2 provides that if, immediately before 1 July 2011, a law required the Commissioner for Superannuation to provide a report that is not covered by subitem 18(1) for a period ending after that date, the CEO of ComSuper must provide the report for so much of the period occurring before 1 July 2011.

306. Subitem 17(4) of Schedule 2 provides that if the CEO of ComSuper is required to provide a report for a part of a period under subitem 18(3), and is also required to provide a similar report for the remainder of the period, the CEO of ComSuper may meet the requirements by providing a single report that covers the whole period.

307. Subitem 18(5) of Schedule 2 provides that if the Commissioner for Superannuation was required by law to provide a report that relates to the 1922 scheme or the PNG for a period that ended before 1 July 2011, and the report has not been provided by that date, CSC must provide the report.

308. Subitem 18(6) of Schedule 2 provides that if the Commissioner for Superannuation was required by law to provide a report that is not covered by subitem 18(5) for a period that ended before 1 July 2011, and the report has not been provided by that date, the CEO of ComSuper must provide the report.

309. Subitem 18(7) of Schedule 2 enables the Minister to determine, in writing, that subitems 18(1), (2) and (5) apply as if references to CSC were references to the CEO of ComSuper.

310. Subitem 18(8) of Schedule 2 enables the Minister to determine, in writing, that subitems 18(3), (4) and (6) apply as if references to the CEO of ComSuper were references to CSC.

311. Subitem 18(9) of Schedule 2 clarifies that a determination under subitem 18(7) or (8) is not a legislative instrument for the purposes of the Legislative Instruments Act because it is administrative in character. It does not determine or alter the content of the law. This provision is included to assist readers and is merely declaratory.

Part 7 - Miscellaneous

Item 19 - Capital Gains Tax roll-over

312. Item 19 of Schedule 2 provides a capital gains tax (CGT) roll-over (i.e. effective deferral of any CGT liability) for the transfer of MSB Fund assets by CSC to the trustee of a pooled superannuation trust known as the ARIA Investments Trust. The roll-over applies automatically rather than by election.

313.The provision of CGT roll-over reflects the essentially involuntary nature of the transaction.

314.Item 19 modifies the application of the Income Tax Assessment Act 1997 (ITAA 1997) without changing the text of that Act.

315.Section 18 of the MSB Act together with the MSB Trust Deed provide for the functions and powers of CSC in relation to the MSB and includes the power to operate a pooled superannuation trust for the purposes of managing the assets of the MSB Fund.

316. Subitem 19(1) of Schedule 2 provides that the object of this item is that the CGT roll-over facilitates CSC operating a pooled superannuation trust, known as the ARIA Investments Trust, that is used for investing the assets of the MSB Fund.

317. Subitem 19(2) of Schedule 2 provides that the roll-over applies if all of the following conditions are met.

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After 30 June 2011 and on or before 1 July 2012 (or a later date specified by the regulations), one or more CGT events happens because CSC ceases to hold CGT assets of the MSB Fund

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Because of the cessation, the identical assets start to be held by the trustee of the ARIA Investments Trust during the same period

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The cessation is part of a scheme under which CGT assets of the MSB Fund are replaced with units in the ARIA Investments Trust.

318.The bracketed words in paragraph 19(2)(b)(i) ensure that identical assets need not have been assets of the MSB Fund just before the CGT event. An example of where the bracketed words would be relevant is where the transferor entity owns units in a unit trust as investments and has them cancelled at its request followed by the issue of identical units to the transferee entity.

319.A statutory note at the end of subitem 19(2) explains that the transferee trustee may be CSC and refers to subsection 960-100(3) of the ITAA 1997. Subsection 960-100(3) provides that a legal person can have a number of different capacities in which the person does things and that, in each of those capacities, the person is taken to be a different entity for the purposes of the ITAA 1997.

320. Subitem 19(3) of Schedule 2 provides that the effect of the CGT roll-over is that the capital gain or capital loss that would otherwise be recognised when the transfer of assets by CSC as trustee of the MSB Fund occurs is disregarded. The effect of this provision is that the recognition of the accrued capital gain or capital loss is deferred until later disposal (or other CGT event) of the assets by the trustee of the ARIA Investments Trust.

321. Subitem 19(4) of Schedule 2 provides that, for the transferee trustee, the first element (that is, the acquisition cost) of the CGT cost base of each of the identical assets the transferee trustee holds is the cost base of the corresponding asset for CSC as trustee of the MSB Fund at the time of the relevant CGT event. Cost base is relevant for calculating a capital gain.

322. Subitem 19(5) of Schedule 2 provides that, for the transferee trustee, the first element (that is, acquisition cost) of the CGT reduced cost base of each of the identical assets the transferee trustee holds is the reduced cost base of the corresponding asset for CSC as trustee of the MSB Fund at the time of the relevant CGT event. Reduced cost base is relevant for calculating a CGT loss.

323. Subitem 19(6) of Schedule 2 provides that, for the purposes of the ITAA 1997, a roll-over that is covered by item 19 is treated as a same-asset roll-over. The significance of this is that subsection 115-30(1), table item 1 of the ITAA 1997 ensures that, for the purpose of determining whether the transferee pooled superannuation trust has owned the CGT assets for at least 12 months to be eligible for the one-third CGT discount available to complying superannuation entities (including pooled superannuation trusts), the period the former MSB Board as trustee of the MSB Fund owned the assets counts towards the 12 months. Put more simply the CGT discount 12 months clock is not reset.

324.For other purposes, the transferee pooled superannuation trust is still treated as acquiring the assets on the date of transfer. This is consistent with the approach taken in other CGT roll-overs. For example, the transferee pooled superannuation trust is not eligible to claim CGT indexation to 30 September 1999 instead of the one-third CGT discount. This is because the transferee pooled superannuation trust did not acquire the assets at or before 11.45am, 21 September 1999.

325. Subitem 19(7) of Schedule 2 provides that an expression used both in item 19 and in the ITAA 1997 has the same meaning as in that Act. Examples of these expressions are CGT event, CGT asset, pooled superannuation trust, and same-asset roll-over.

326.The amendments do not provide a roll-over for exchange of members' interests because it is already provided for in existing CGT provisions. Section 118-305 of the ITAA 1997 provides an exemption for certain capital gains or capital losses in relation to members' interests in a superannuation fund.

Item 20 - Retrospective amendments

327. Item 20 of Schedule 2 allows provisions in instruments that amend a reference to the MSB Board, the Authority or the Commissioner for Superannuation in any other instrument to have effect from 1 July 2011, or a later date that is prior to the making of the instrument, if the amending instrument is made within 12 months from 1 July 2011. This item is intended to provide for the updating of provisions in instruments that refer to the abolished MSB Board, the Authority and the Commissioner for Superannuation. The retrospective application of instruments made in accordance with the authority included in this item will not disadvantage the rights of any person or impose any liabilities on any person. Rather it is intended to allow time for references in instruments to be updated.

Item 21 - Constitutional safety net in relation to acquisition of property

328.The purpose of item 21 of Schedule 2 is to ensure that there is no acquisition of property by the Commonwealth other than on just terms, as required by section 51(xxxi) of the Constitution.

329. Subitem 21(1) of Schedule 2 provides for reasonable compensation to be paid to a person if the operation of the Schedule would result in an acquisition of property from a person otherwise than on just terms.

330. Subitem 21(2) of Schedule 2 enables a person to institute proceedings in a court of competent jurisdiction where that person and the Commonwealth disagree on the amount of compensation for the purposes of subitem 21(1).

Item 22 - Saving existing delegations

331. Item 22 of Schedule 2 is intended to ensure that the changes to governance arrangements for Commonwealth superannuation from 1 July 2011 do not affect the operation of existing delegations in relation to the civilian and military superannuation schemes. It also provides for the delegations to continue as if they reflect the governance arrangements that apply from that date. This means, for example, that delegations to the Commissioner for Superannuation are treated as if they are delegations to the new position of CEO of ComSuper.

332. Subitem 22(1) of Schedule 2 continues in force delegations made by ARIA, the Authority, the MSB Board and the Commissioner for Superannuation under superannuation law that applies immediately before 1 July 2011. It also preserves sub-delegations in relation to superannuation law. This includes sub-delegations to, and by, the Commissioner for Superannuation and staff assisting the Commissioner.

333. Subitem 22(2) of Schedule 2 makes it clear that subitem 22(1) does not apply to delegations made by the Minister or under a governing deed.

334. Subitem 22(3) of Schedule 2 continues in force delegations made by the Minister under section 51 of the MSB Act that apply immediately before 1 July 2011. These delegations are to the MSB Board, the Commissioner for Superannuation, staff assisting the Commissioner, APS employees in the Department and officers of the Defence Force.

335. Subitem 22(4) of Schedule 2 continues in force delegations made by the Minister under section 165 of the 1976 Act, section 47 of the 1990 Act, and section 33 of the 2005 Act that apply immediately before 1 July 2011.

336. Subitem 22(5) of Schedule 2 continues in force delegations made under the MSB Trust Deed, the PSS Trust Deed, and the PSSAP Trust Deed.

Item 23 - Saving of existing declarations

Item 23 of Schedule 2 provides for the saving of declarations made under subsection 13(1) of the 2005 Act before commencement. The declarations will continue in force as if they were a declaration made under the new subparagraph 13(1)(a)(ii) of the 2005 Act, as inserted by item 229 of Schedule 1.

Item 23 - Transfer of records

337. Subitems 24(1) and (2) of Schedule 2 provide that the records and documents in the custody of the Commissioner for Superannuation prior to 1 July 2011 are to be transferred to the custody of the CEO of ComSuper on or after that date. This item is intended to ensure that the CEO of ComSuper has the records and documents necessary for the CEO of ComSuper to perform their functions in relation to ComSuper.

Item 25 - Authenticity of certificates

338. Item 25 of Schedule 2 provides for a document that appears to be made or issued under Schedule 2 to be taken to be such a certificate and to have been properly given, unless the contrary is established.

Item 26 - Special Accounts

339. Subitem 26(1) of Schedule 2 provides for the balance in the ARIA Special Account immediately before commencement to be paid to CSC and for the CRF to be appropriated accordingly. ARIA is a prescribed agency for the purposes of the FMA Act, however CSC will be subject to the Commonwealth Authorities and Companies Act 1997 . Therefore it is necessary to transfer any balance in the Special Account on commencement to CSC.

340. Subitems 26(2) and (3) of Schedule 2 will transfer the balance in the Commonwealth Superannuation Administration Special Account, immediately before commencement, in two ways: the majority to a new ComSuper Special Account being established in the ComSuper Bill; and the remaining amount, which relates to the MSB Board, will be paid to CSC, and for the CRF to be appropriated accordingly for this latter amount. The Commonwealth Superannuation Administration Special Account currently holds monies both in respect of ComSuper and the MSB Board.

Item 27 - Validation of audit fees paid

341. Item 27 of Schedule 2 validates the previous payment of audit fees to the Auditor-General in relation to the audit of Australian Government superannuation fund financial statements. This aims to address an anomaly in the AG Act, resulting from the repeal of the Audit Act 1901 , whereby even though the Auditor-General was still required to audit the financial statements of the Australian Government superannuation funds, there was no express provision included in the AG Act enabling the Auditor-General to charge fees for the audits undertaken. This is because the unique nature of the funds means they do not satisfy the requirements in section 12 and section 13 of the AG Act.

342. Item 5 of Schedule 1 addresses the issue from 1 July 2011.

Item 28 - Regulations

343. Item 28 of Schedule 2 allows the Governor-General to make regulations for the purposes of this Schedule where required, permitted, necessary or convenient to be prescribed for carrying out or giving effect to this Schedule. In particular, the purpose of this item is to allow regulations to deal with matters of a transitional nature resulting from the effects of this Bill.