Bills Digest no. 106 2009–10
ComSuper Bill 2010
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
ComSuper Bill 2010
Date introduced: 4 February 2010
House: House
of Representatives
Portfolio: Finance and Deregulation
Commencement: Clauses 1 and 2
commence on Royal Assent.
Clauses 3–27 commence at the same time
as the proposed Governance of Australian Government
Superannuation Schemes Act 2010 (which is, according to
proposed section 2 of that Act, 1 July 2010)
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
This Bill will establish a
statutory agency, to be known as ‘ComSuper’, for the
purposes of the Public Service Act 1999.
ComSuper will provide administrative services to the
Commonwealth Superannuation Corporation (CSC). The
Commonwealth superannuation schemes that will be administered by
the proposed new body are:
- the scheme established under the Superannuation Act
1922 (the 1922 scheme)
- the Commonwealth Superannuation Scheme (CSS)
- the Public Sector Superannuation Scheme (PSS)
- the scheme provided for under the Papua New Guinea
(Staffing Assistance) Act 1973 (PNG Scheme)
- the Defence Forces Retirement Benefits Scheme (DFRB)
- the Defence Forces Retirement and Death Benefits Scheme
(DFRDB), and
- the Military Superannuation and Benefits Scheme (MSBS).
These are defined benefit schemes, where the final benefit
payable to a member is generally determined by the member’s
years of service and final salary on retirement. The schemes
are more complex to administer than accumulation schemes, and the
private sector may not find their administration profitable.
Only the MSBS is open to new members.
The administration of the Public Sector Superannuation
Scheme—Accumulation Plan (PSSAP) will eventually be
outsourced to the private sector, saving the Government about $5
million annually.[1]
Initially the PSSAP administration will also be undertaken by the
new ComSuper entity.[2]
The PSSAP is an accumulation scheme, where the member’s
benefits are determined by his or her contributions and the
scheme’s investment returns. They are comparatively simple to
administer, compared to the defined benefit schemes noted
above.
These initiatives are being taken following a review of
government superannuation administration arrangements by
PriceWaterhouse Coopers and the Department of Finance and
Deregulation.[3]
Currently, the administrative services for all these schemes are
provided by ‘ComSuper’, a government business unit
within the Finance and Deregulation portfolio. This organisation is
headed by the Commissioner for Superannuation, a statutory
office-holder under subsection 18(2) of the Superannuation Act
1976.[4]
The Commissioner for Superannuation administers these schemes
under the direction of their trustees,[5] who are:
- the Australian Reward Investment Alliance (ARIA) for the PSS,
PSSAP and CSS
- the Military Superannuation and Benefits Board for the MSBS,
and
- the Defence Force Retirement and Death Benefits Authority for
the DFRB and DFRDB.
The proposed changes were announced by the Minister for Finance
and Deregulation on 26 November 2009.[6]
These changes complement the proposed merger of the various
trustee bodies mentioned above into a single entity on 1 July
2010.[7] The new
trustee body will be known as the ‘Commonwealth
Superannuation Corporation’ (CSC).
At the time of writing, the Bill has not been referred to a
committee for inquiry and report.
Little interest has been shown in the proposed changes.
The proposed changes are intended to bring about administrative
efficiency and savings. The outsourcing of the PSSAP’s
administration will leave the new entity free to concentrate on the
administration of the more complex defined benefit schemes.
Currently, ComSuper is subject to direction from several
different trustee boards, which may not have the same priorities.
The proposed changes will allow the new ComSuper entity to be
directed by a single trustee entity.
The Explanatory Memorandum notes that this Bill has no financial
impact.[8]
Clause 3 contains definitions of terms used
throughout the Bill, including ‘CEO’,
‘ComSuper’ and ‘governing
deed’. It also contains definitions for the
following terms:
- ‘CSC’ (which is short for
‘Commonwealth Superannuation Corporation’), which is
defined by reference to the proposed Governance of Australian
Government Superannuation Schemes Act 2010. There, the
term is defined in proposed section 3 to mean the board established
under section 20 of the Superannuation Act 1990 as the
‘Australian Reward Investment Alliance’. That
board has been continued in existence by proposed section 4 of the
Governance of Australian Government Superannuation Schemes Act
2010 as a body corporate. The new body corporate will be
called CSC, and
- ‘PSSAP’ (which is short for the Public Sector
Superannuation Accumulation Plan), which is defined by reference to
the Superannuation Act 2005. There, the term is
defined in section 4 to mean ‘the superannuation scheme
established by the Trust Deed’ (being the deed referred to in
section 10 of that Act establishing a superannuation scheme to be
known as the ‘Public Sector Superannuation Accumulation
Plan’ (or PSSAP), including amendments to the deed).
Clause 4 establishes Comsuper. It
consists of the CEO and the staff of ComSuper.[9] Its function is ‘to
assist the CEO in the performance of the CEO’s
function’.[10]
Clause 8 sets out the function and powers of
the CEO. The CEO’s function is to provide
administrative services to CSC in the performance of its functions
‘in relation to a superannuation scheme administered by
CSC’.[11] The CEO has wide-ranging power to do ‘all
things necessary or convenient to be done for or in connection with
the performance of his or her function’.[12]
As a general rule, the CEO is subject to directions of CSC and
must try to act ‘in accordance with policies, guidelines and
standards’ determined by CSC.[13] However, the CEO does not need
to comply with a CSC’s direction if it would be inconsistent
with:
- the CEO’s function or powers under the Financial
Management and Accountability Act 1997 (FMA Act) or the
Public Service Act 1999 in relation to ComSuper,[14] or
- another Commonwealth law or Commonwealth policies ‘in
relation to the administration of an Australian government
superannuation scheme’.[15]
The CEO is to be appointed by the Minister by written instrument
on a full-time basis.[16] The CEO holds office for the period specified in
the instrument. The period must not exceed five
years.[17]
Where the office of CEO is vacant, or the CEO is absent from duty,
the Minister may appoint a person to act as CEO.[18]
Subject to the Remuneration Tribunal Act 1973, the
CEO’s remuneration is to be determined by the Remuneration
Tribunal. If there is no determination in operation, the CEO
is to be paid the remuneration that is prescribed by the
regulations.[19] The CEO is also to be paid the allowances that
are prescribed by the regulations.[20]
While the CEO has the recreational leave entitlements determined
by the Remuneration Tribunal, the Minister may also grant the CEO
leave of absence (other than recreation leave) on the terms and
conditions (as to remuneration or otherwise) determined by the
Minister in writing.[21]
The CEO must not engage in paid work outside the duties of his
or her office without the Minister’s approval.[22] The CEO must
give written notice to the Minister of all interests, pecuniary or
otherwise, that the CEO has (or acquires) and that conflict (or
could conflict) with the proper performance of the CEO’s
function.[23]
The CEO holds office on such terms and conditions (if any) in
relation to matters not covered by the proposed Act that are
determined by the Minister in writing.[24] The CEO may resign by giving
the Minister a signed notice of resignation, which takes effect on
the date it is received by the Minister or the date specified in
the resignation, whichever occurs last.[25] The Minister may terminate the
appointment of the CEO for a variety of reasons, including
misbehaviour, mental incapacity, bankruptcy, or failing without
reasonable excuse to disclose interests under proposed section
15.[26]
The staff of ComSuper are to be public servants.[27] The CEO and
staff of ComSuper together constitute a statutory agency, with the
CEO as the head of the agency.[28] The CEO may engage consultants to assist in
the performance of the CEO’s function.[29]
Clause 21 establishes the ‘ComSuper
Special Account’, which is a ‘Special Account’
for the purposed of the FMA Act.[30] Amounts equal to all money received from
any purpose for the purposes of the Account must be credited to the
Account.[31]
The purposes of the Account are set out in clause
23, including:
- to pay or discharge costs, expenses or other obligations
incurred by ComSuper
- to pay remuneration or allowances to any person under the
proposed Act, and
- to reduce the balance of the Special Account by making a
notional payment.
Clause 24 requires the CEO to prepare and give
to the Minister, as soon as practicable after 30 June in each
financial year, an annual report relating to the performance of the
CEO’s function during the financial year. The report
must include:
- particulars of any directions given to the CEO by CSC during
the year and the impact of the directions on the performance of the
CEO’s function
- financial statements required by section 49 of the FMA
Act,[32] and
- an audit report on those statements under section 57 of the FMA
Act.[33]
The CEO may delegate, in writing, the CEO’s function
and/or powers under the proposed Act to an SES employee or acting
SES employee in ComSuper.[34] In performing the function or exercising the
powers of the CEO, the delegate must comply with any written
directions of the CEO.
In performing his or her function under the proposed Act, the
CEO (or a member of the staff of ComSuper performing the function)
is not liable for anything done, or omitted to be done, in good
faith. However, CSC remains liable for any ‘action,
liability, claim or demand’ that may arise.[35]
Les Neilson and Morag Donaldson
22 February 2010
Bills Digest Service
Parliamentary Library
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2495 (Les
Nielson) or 6277 2795 (Morag Donaldson).
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