Bills Digest no. 106 2014–15
PDF version [653KB]
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.
Kai Swoboda
Economics Section
13 May 2015
Contents
Purpose
of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Concluding comments
Date introduced: 19
March 2015
House: House of
Representatives
Portfolio: Finance
Commencement: To be
fixed by Proclamation, but will commence no later than the day after six months
after Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The Governance of Australian Government Superannuation
Schemes Legislation Amendment Bill 2015 (the Bill) amends the Governance of Australian
Government Superannuation Schemes Act 2011 (Governance Act) and
other legislation, and repeals the ComSuper Act 2011 to merge ComSuper
(the provider of administration services for Australian Government civilian and
military employee superannuation schemes) with the Commonwealth Superannuation
Corporation (CSC) (the trustee for the same superannuation schemes).
The Bill also amends the Governance Act and the Superannuation
Act 2005 to enable the deduction of administration fees from members of the
Public Sector Superannuation accumulation plan (PSSap) scheme, rather than
having these paid by the Commonwealth on behalf of scheme members.
The Government’s ‘smaller
government’ agenda and proposed governance and administration arrangements
The merger of ComSuper with the CSC is part of the
Government’s broader agenda to ‘to reduce duplication, improve coordination and
increase efficiency in how public funds are used to deliver services to the
community’.[1]
As noted in the Explanatory Memorandum, the merger is expected to deliver
savings of $0.5 million per annum.[2]
The proposed merger was included as a measure in the 2014–15 Budget as part of
a ‘mass consolidation and abolition of government bodies’.[3]
There was already some streamlining, with changes made under the Labor
Government in 2011 when the then three trustees of the Australian Government's
civilian and military superannuation schemes were merged to form CSC.[4]
The Government’s ‘smaller government’ policy was influenced
by the National Commission of Audit, which was commissioned following the 2013
election to examine options for greater efficiencies in the Australian
Government including the consolidation of agencies and boards and rationalising
the service delivery footprint.[5]
In the Commission of Audit’s first report, it recommended that ‘consideration
should be given to consolidating ComSuper into the Commonwealth Superannuation
Corporation’.[6]
Apart from its specific mention of ComSuper, the Commission of Audit’s
recommendations included abolishing seven bodies, merging 35 bodies,
consolidating 22 bodies into departments and agencies; potentially privatising
nine bodies and reassessing the operations and continuing need for 26 other
bodies.[7]
The basis of the Commission of Audit’s recommendations was
an assessment that:
There are too many government bodies in Australia. This leads
to duplication and overlap, unnecessary complexity, a lack of accountability,
the potential for uncoordinated advice and avoidable costs.[8]
Changes made to date under the Government’s ‘smaller
government’ policy, have included a number of mergers, abolitions and
privatisations. These changes have been announced in three stages:
- post
2013 election — announced changes included the commencement of the Medibank Private
sale process, the merger of AusAID into the Department of Foreign Affairs and
Trade, the abolition of 23 non‑statutory advisory bodies including: the
Social Inclusion Board, the Australian Animals Welfare Advisory Committee, the
Commonwealth Firearms Advisory Council and the National Intercountry Adoption
Advisory Group, and the merger of the Grape and Wine Research and Development
Corporation and Wine Australia to create the Australian Grape and Wine
Authority[9]
- 2014–15
Budget — announced changes included the abolition of the Abalone Aquaculture
Health Accreditation Workshop and the Albury-Wodonga Development Corporation,
the merger of the Australian Customs and Border Protection Service into the
Department of Immigration and Border Protection and scoping studies into the
possible privatisation of several government bodies: Defence Housing Australia,
the Royal Australian Mint, Australian Hearing and the Registry function of the
Australian Securities and Investments Commission and[10]
- 2014–15
Mid-year Economic and Fiscal Outlook —announced changes included the
consolidation of the Australian Government Solicitor within the
Attorney-General's Department and the introduction of shared services
arrangements for some current standalone bodies such as the Australian Sports
Anti-Doping Authority and the National Health and Medical Research Council.[11]
The Government has indicated that a fourth stage of smaller
government reforms will be announced in the 2015–16 Budget.[12]
This will include decisions after consideration of scoping studies initiated in
the 2014–15 Budget.[13]
Current governance and
administration arrangements for Australian Government superannuation schemes
Commonwealth superannuation schemes
There are a number of superannuation schemes covering current
and former Commonwealth public servants. Most of these are ‘defined benefit’[14]
schemes that are closed to new entrants. These schemes include:
- the
Public Sector Superannuation accumulation plan (PSSap) scheme — the PSSap was
established in 1 July 2005 by the Superannuation Act 2005. As at
30 June 2014, there were around 130,000 members in the PSSap
- Military
Superannuation and Benefits Scheme (MSBS) — the MSBS was established on
1 October 1991 under the Military Superannuation and Benefits Act 1991 (MSBS
Act). The MSBS will close to new members on 30 June 2016. As at
30 June 2014, there were around 164,000 members in the MSBS
- Public
Sector Superannuation (PSS) scheme —the PSS was established under the Superannuation
Act 1990. The PSS was closed to new members on 30 June 2005. As at
30 June 2014, there were around 235,000 members in the PSS
- Commonwealth
Superannuation Scheme (CSS) — the CSS was established under the Superannuation
Act 1976. The CSS was closed to new members on 1 July 1990. As at
30 June 2014, there were around 127,000 members in the CSS
- Defence
Force Retirement and Death Benefits (DFRDB) scheme — the DFRDB scheme was
established by the Defence Force Retirement and Death Benefits Act 1973
(DFRDB Act). The DFRDB scheme was closed to new entrants on
1 October 1991. As at 30 June 2014, there were around 56,000 members
in the DFRDB scheme
- Defence
Forces Retirement Benefits (DFRB) scheme — the DFRB scheme is established under
the Defence Forces Retirement Benefits Act 1948 (DFRB Act) and
was closed to new contributors from 30 September 1972. Members who were
contributors to DFRB on 30 September 1972 were compulsorily transferred to
DFRDB on 1 October 1972. As at 30 June 2014, there were around
3,100 pensions paid under the DFRB scheme
- Papua
New Guinea (PNG) superannuation scheme — the PNG scheme is a closed scheme and
provides retirement benefits for employees of the administration of the
Territory of Papua and New Guinea under the Papua New Guinea (Staffing
Assistance) Act 1973 (PNG Act). As at 30 June 2014, there were
175 pensions paid under the PNG scheme and
- 1922
scheme — the 1922 scheme is a closed scheme and is governed by the Superannuation
Act 1922. Contributors under this Act were compulsorily transferred to the
CSS on 1 July 1976. However, the 1922 scheme still provides for the payment of
pensions that were in force at 1 July 1976, deferred benefit entitlements and
any reversionary pensions that became payable. As at 30 June 2014, there were
around 3,600 pensions paid under the 1922 scheme.[15]
The legislation covering each scheme includes references
to the roles and functions of the Commonwealth Superannuation Corporation (CSC)
and ComSuper.
Commonwealth Superannuation
Corporation
The CSC, established by the Governance of Australian
Government Superannuation Schemes Act 2011, is the trustee for nine
Australian Government superannuation schemes. These include the CSS, DFRDB scheme,
the MSBS, the PSS and the PSSap.[16]
While the CSC is the trustee for these schemes, the
administration and investment functions for these schemes are formally separate
and are undertaken by ComSuper.
As at 30 June 2014, the CSC employed around 80 staff.[17]
CSC staff are not public servants employed under the Public Service Act 1999.
Rather, employees are engaged under terms and conditions determined by the CSC
board.[18]
ComSuper
ComSuper is a Commonwealth entity established under the ComSuper Act 2011.[19]
ComSuper provides superannuation administration services under authority from
the CSC for the various Commonwealth schemes.[20]
The services ComSuper provides or is responsible for include:
- collection
of member contributions and maintenance of member accounts
- payment
of lump sum and pension benefits
- member
communications
- accounting
services
- dispute
resolution and
- secretariat
support functions.[21]
As at 30 June 2014, ComSuper employed 482 staff.[22]
While Comsuper directly provides administration services for most of the
superannuation schemes, services relating to the PSSap scheme were outsourced
in February 2012 to Pillar Administration (an entity owned by the NSW Government).[23]
PSSap scheme arrangements
The PSSap is an accumulation superannuation scheme and is
the default superannuation scheme in which Commonwealth public servants who
commenced employment after 1 July 2005 are able to join. It is not mandatory to
join PSSap, new employees are able to choose a fund in a similar way to most private
sector employees. The CSC is responsible for the administration of the fund in
accordance with the PSSap
Trust Deed.[24]
The value of employer contributions in 2013–14 to the PSSap was
around $1 billion and member contributions in the same year was around
$20 million.[25]
PSSap members have some choice of investment options within the fund and are
able to switch investment strategies at any time by changing the share
allocated to the categories of ‘cash’, ‘income focused’, ‘MySuper balanced’,
‘Balanced (Ancillary members only)’ and ‘aggressive’. Members are able to
switch strategies up to two times per year for zero cost, after which a switch
costs $20.[26]
Returns for individual fund members will depend on the
investment options they have chosen. For those choosing the default option (or
those not choosing any option and therefore remaining in the default option),
returns over recent years have varied significantly (Table 1).
Table 1 PSSap default investment option returns, 2009–10
to 2013–14 (per cent)
Financial year
|
Return (%)
|
2009–10
|
9.0
|
2010–11
|
7.3
|
2011–12
|
2.4
|
2012–13
|
13.7
|
2013–14
|
11.5
|
Source: Commonwealth Superannuation Corporation, Public sector
superannuation accumulation plan: annual report 2013–14, p. 3,
accessed 24 March 2015.
It is important to note that these investment results for
members of the PSSap do not have any fees deducted for the administration of
the scheme.
Introduction of administration fees
for PSSap members
Under existing arrangements, PSSap members do not pay any
administration fees relating to the administration or operation of the scheme.
However, fees are incurred in relation to investment management and switching
investment options.[27]
The PSSap scheme was established to cater for superannuation
arrangements for Commonwealth public servants employed from 1 July 2005
following the closing of the Public Sector Superannuation scheme to new members
at the same time. Parliamentary debate in 2005 for the legislation establishing
the scheme did not include many references to the absence of administration
fees. However, one member of the then opposition—Senator Sherry—noted that the
absence of such fees provided an advantage to members:
One other aspect of this is that the government has agreed to
pay the administration costs. The new employees in the public sector
accumulation fund will receive not only the 15.4 per cent contribution from the
employer but also, effectively, those investments of the management and
administration fees being paid by the appropriate government department. In
that sense it is a very generous arrangement for new employees going forward,
albeit in the form of an accumulation rather than a defined benefit.[28]
In the 2014–15 Mid‑Year Economic and Fiscal Outlook,
the Government announced that it would require PSSap members to pay
administration fees from 2015–16, with the level of fees to be determined by
the CSC.[29]
The Government noted that this policy ‘will bring [PSSap] into line with
private sector superannuation funds where members pay for the administration of
their accounts’.[30]
Impact of the introduction of
administration fees on PSSap members
The financial impact of imposing administration fees is
estimated to save the budget $26.8 million over the four years from 2015–16.[31]
Assuming these savings are even across all of these years, the administration
fee per PSSap member in 2015–16 is in the order of $51.50.[32]
This amount would be at the lower end of administrative fees imposed on default
superannuation products by other superannuation funds, which were found for
December 2013 to range from between $52.10 per member per year to
$83.07 per member per year.[33]
Information provided by ComSuper in response to questions on
notice at the recent 2014–15 additional estimates hearings put the value of
PSSap administration fees for 2014–15 paid by the employer agencies at
$118 per contributing member and $86 for a preserved member.[34]
The Bill was referred to the Senate Finance and Public
Administration Committee for inquiry and report by 7 May 2015.[35]
Details of the inquiry are at the Committee’s
inquiry homepage.[36]
In its report, the Committee recommended that the Senate
pass the Bill.[37]
In their additional comments, Labor Senators raised their concern about
mobility rights for ComSuper staff, considering that there was ‘value’ in an
amendment to the Bill to ensure mobility rights for ComSuper staff to move back
into the Australian Public Service (APS).[38]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills made
three comments on the Bill relating to:
- a
‘Henry VIII clause’ that potentially allows the Minister to modify the
operation of certain Acts by making rules—the Committee left the question open
about whether the proposed approach is appropriate to the Senate as a whole and
- the
delegation of legislative power in relation to provisions about the first
instrument amending the trust deed being not subject to disallowance and that
the first instrument amending the Trust Deed may take effect before the date
the instrument is registered—the Committee made no further comment on these two matters in light of the explanations
made in the Explanatory Memorandum.[39]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights had no
comment on the Bill.[40]
None identified in relation to this Bill.
The Community and Public Sector Union (CPSU) has raised
some concerns about both the proposed merger of the CSC and ComSuper as well as
the imposition of administration fees on PSSap members. The CPSU is opposed to
the imposition of administration fees on PSSap members, which it considers will
have a detrimental impact on the retirement income of members of the scheme.[41]
The CPSU is also concerned about the compulsory transfer of staff from the
public service in ComSuper to the CSC and the maintenance of existing workplace
terms and conditions.[42]
The Explanatory Memorandum notes that the merger of ComSuper
with the Commonwealth Superannuation Corporation is expected to deliver savings
of $0.5 million per year.[43]
The imposition of administration fees on PSSap members is estimated to save
$26.8 million over the four years from 2015–16.[44]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[45]
The Bill includes a commencement provision for Schedule 1
for a day or days to be fixed by proclamation. The planned date for the CSC and
ComSuper merger is 1 July 2015.[46]
ComSuper’s portfolio budget statements include a number of
performance indicators that relate to service standards in administering the
superannuation schemes.[47]
There are no separate indicators for the PSSap. The levels for each of these
quality indicators is set at a constant level for the period to 2017–18. An
indication about quality of service for the merged CSC may be available from
the CSC’s portfolio budget statements in the
2015–16 Budget. These may serve as a qualified proxy for the level of service
of the merged CSC. The level of service is of course distinct from the quality
of service.
Schedule 1—Merger of the
Commonwealth Superannuation Corporation and ComSuper
Part 3 of Schedule 1 provides for the repeal
of the ComSuper Act 2011 (item 65). The repeal of this Act
effectively dissolves the entity ComSuper.
Part 1 of Schedule 1 provides necessary
amendments to the Governance Act for the merger of ComSuper into the
CSC.
CSC special account and making and
receiving payments
Item 1 inserts the definition of ‘Account’ into the Governance
Act to be the ‘CSC Special Account’ to be established by new section 29E.[48]
Item 2 inserts new sections 29A to 29G that
relate to the establishment of the CSC Special Account, the purposes of the
account and provisions for the CSC to make and receive payments or other
amounts on behalf of the Commonwealth and recover debts owing to the
Commonwealth. The provisions relating to the special account essentially
replicate similar arrangements that were included in the ComSuper Act.
Item 3 repeals existing section 32, which exempts the
CSC from taxation except for specific Commonwealth laws, and inserts proposed
section 32. This proposed section largely reflects the arrangements in the
repealed section and facilitates the tax exempt status of payments that the
Commonwealth provides to CSC for administration services.[49]
Items 4 to 7 amend section 34 which deals with
the source of funds for the payment of remuneration and allowances to the CSC
chair and other directors. The intent of the amendments is to simplify the
arrangements by removing a special appropriation and having these payments come
from the CSC special account. The amendments do not affect the allowances and
remuneration of directors.[50]
Delegations
Items 8 to 12 amend section 36 of the Governance
Act which deals with delegation by the CSC. The revised delegations:
- remove
references to the CEO of ComSuper or a member of the staff of ComSuper (these
are redundant on the merger) and
- provide
that the specified limitations on the delegation of power to review CSC
decisions do not apply in relation to decisions involving the recovery of debts
owing to the Commonwealth.
Consequential amendments to
legislation governing individual superannuation schemes
Part 2 of Schedule 1 makes consequential
amendments to the legislation covering the various superannuation schemes
previously administered by ComSuper to reflect that this function will be
carried out by the CSC. These provisions relate to references to ComSuper (or
the chief executive of ComSuper) and reporting arrangements for recoverable
payments and recoverable death payments. The Acts to be amended are:
- the
DFRDB Act
- the
MSBS Act
- the
PNG Act
- the
Superannuation Act 1976
- the
Superannuation Act 1990
- the
Superannuation Act 2005 and
- the
Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation)
Act 2008.[51]
Schedule 2—Transitional provisions
relating to the CSC and ComSuper merger
Schedule 2 contains various transitional and savings
provisions to facilitate the merger of ComSuper into CSC.
Assets, liabilities, legal
proceedings and replacing ComSuper with CSC in other laws
These cover the vesting of assets and liabilities from ComSuper
to the CSC and the substitution of the CSC for ComSuper as a party to pending
legal proceedings (Schedule 2 Part 2). The Schedule also ensures that
any action taken in the merger, such as the vesting of assets in the CSC, is exempt
from stamp duty and other Commonwealth and state or territory taxes and for
references, or operation of laws in relation to ComSuper (or the CEO of ComSuper)
to be regarded as if they were references to the CSC.
Arrangements for ComSuper staff
Part 4 of Schedule 2 deals with arrangements
relating to the transfer of ComSuper staff to the CSC. As noted previously,
this essentially involves ComSuper staff moving out of the public service and
into an environment more like the private sector, where the terms and
conditions are generally determined by the individual employer.
Item 10 provides that the CEO of ComSuper ceases to
hold this office at the commencement of the merger.
Items 11 puts into place arrangements so that ComSuper
staff transferring to CSC will carry with them their accrued benefits (such as
annual leave) and continuity of service to the CSC. Item 12 provides
that ComSuper staff (and former ComSuper staff) who suffered an injury prior to
the merger will be treated as employees of the CSC for the purposes of the Safety,
Rehabilitation and Compensation Act 1988. Item 14 also provides for
the terms and conditions relating to staff under the ComSuper enterprise agreement
to continue to apply on transfer to the CSC.
While the CPSU welcomed these arrangements, the CPSU noted
in its submission to the Senate Finance and Public Administration Committee
that ComSuper employees would lose entitlements under the APS mobility
arrangements and paid maternity leave entitlements.[52]
The CPSU suggested that entitlements to these arrangements should be reinstated
for the ComSuper employees.[53]
A provision to enable re-entry into the APS was raised by
ComSuper in its submission to the Committee, noting that:
In relation to future employment opportunities within the APS
for ComSuper staff affected by the provisions of the Bill, there are some
ComSuper staff for whom opportunities to re-enter the APS are important.
Amendment to enable APS re-entry would be likely to be viewed beneficially by
these staff.[54]
However, the Public Service Commissioner did not support the
retention of mobility arrangements, noting that this ‘would set an unwelcome
precedent for any future transfer of employees out of the APS’.[55]
In relation to the loss of maternity benefits, the CSC noted
in its submission to the Committee that the CSC Board would make a
determination so that transferring ComSuper staff would have the equivalent
terms and conditions, including for maternity leave, as they had immediately
prior to the merger.[56]
Other provisions
Item 15 of Schedule 2 provides that reports
that were required of the CEO of ComSuper will be required to be provided by
the CSC following the merger. These provisions would apply to the period prior
to the merger. For example, assuming a merger occurred prior to July 2015, then
the CSC would provide reports required from the CEO of ComSuper for the
relevant period relating to the operations of ComSuper, such as the financial
year 2014–15.
Parts 6 and 7 include a number of
miscellaneous provisions that facilitate the merger, covering issues such as
saving existing delegations, a constitutional safety net for the acquisition of
property, transfer of custody of records and the transfer of funds from the ComSuper
Special Account to the CSC Special Account.
These provisions include item 22, which provides a
rule-making power for the Minister, by legislative instrument, to provide
detailed rules about transitional and other matters. This provision was
examined by the Senate Scrutiny of Bills Committee, which noted that page 33 of
the Explanatory Memorandum included a description about these arrangements:
This may be considered a ‘Henry VIII clause’ in that it may
potentially allow the Minister to modify the operation of the [Acts listed in item
22] by making rules. That is, it may result in the operation of primary
legislation being expressly or impliedly amended by subordinate legislation.
This provision is included to allow the Minister to deal with any unintended or
unforeseen consequences for CSC employees or transferring ComSuper staff
arising out of the transfer of employment arrangements. The intention is that,
to the extent possible and practical, there is no enhancement or reduction in
the accrued entitlements of CSC employees and transferring ComSuper staff.
Where a rule under subitem 22(3) could potentially modify the application of an
Act, which another Minister is responsible for, it is intended for such rules
to be made only after that other Minister has been consulted.[57]
As previously noted, the Senate Scrutiny of Bills
Committee did not make any conclusions about this provision and left open the
question of whether the proposed approach is appropriate to the Senate as a
whole.[58]
Schedule 3—Imposition of
administration fees on accounts of PSSap members
Item 1 of Schedule 3 repeals existing
subsection 34(3) from the Governance Act to remove a provision that
provides for PSSap funds to be used as a source as prescribed by regulations
for the payment of remuneration and allowances for the chair and other
directors of the CSC.
Item 2 inserts a note at the end of existing
subsection 32(2) of the Superannuation Act 2005 pointing out that the
making of certain legislative instruments is subject to section 34 of that Act.[59]
Under existing arrangements, section 34 of the Superannuation
Act 2005 provides for a Ministerial determination to be made to prescribe
the allocation of costs for the administration of the Act between PSSap members
and the Commonwealth. These arrangements are prescribed in the Superannuation (PSSAP)
(Division of Costs) Determination 2005, which specifies that the Commonwealth
is responsible for all administrative costs other than those specified in
Schedule 1 to the Determination (which sets out the costs to be paid by the CSC
from the PSSap fund).[60]
Item 3 repeals existing section 34 to 36 of the Superannuation
Act 2005 and inserts new section 34 (costs of administration of Act
et cetera). This new section specifically provides that the costs of the
administration of the Act and the trust deed (including costs of and incidental
to) the management of the PSSap are to be paid by the CSC in accordance with the
trust deed. The inclusion of a constitutional safety net by proposed
subsections 34(3), 34(4) and 34(5) are part of a standard clause that
protects legislation from invalidity if the operation of any of its provisions
is held to result in the acquisition of property within the meaning of
paragraph 51(xxxi) of the Constitution.[61]
Item 4 provides that an amendment to the trust
deed, if it relates to solely to the costs of the administration of the Superannuation
Act as amended by this Schedule of the Bill and if it is the first
amendment to the trust deed made on or after the day this item commences, is
not a disallowable instrument under the Legislative Instruments Act 2003.
This effectively provides that neither the House of Representatives nor the
Senate are able to prevent an instrument that implements the payment of
administration fees by PSSap members from coming into effect, assuming the Bill
passes the Parliament.
The merger of ComSuper into the CSC is part of the
Government’s broader agenda to reduce the number of government agencies as a
way of simplifying governance arrangements, improving administrative efficiency
and reducing administration costs. The merger is not intended to affect the
superannuation benefit design of members of Commonwealth superannuation schemes
and may be viewed largely as a machinery of government change.[62]
For ComSuper employees however, the merger may affect the APS mobility
entitlements they currently have as Commonwealth public servants.
The imposition of administration fees on members of the
PSSap scheme will adversely impact on the retirement savings of members of the
scheme. However, it is difficult to argue against the change, as it brings the
PSSap scheme more in line with private sector arrangements.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Australian
Government, Budget
measures: budget paper no. 2: 2014–15, p. 70, accessed 4 May
2015.
[2]. Explanatory
Memorandum, Governance
of Australian Government Superannuation Schemes Legislation Amendment Bill 2015,
p. 6, accessed 6 May 2015.
[3]. Australian
Government, Budget
measures: budget paper no. 2: 2014–15, op. cit., p. 70; P Thomson,
‘Budget
2014: mergers squeeze bodies together’, The Canberra Times, 14 May
2014, p. 3, accessed 11 May 2015.
[4]. These
changes were implemented by the Governance of Australian
Government Superannuation Schemes Act 2011, the ComSuper Act 2011
and the Superannuation
Legislation (Consequential Amendments and Transitional Provisions) Act 2011,
accessed 12 May 2015.
[5]. National
Commission of Audit (NCOA), ‘Terms of
reference’, NCOA website, accessed 6 May
2015.
[6]. National
Commission of Audit, Towards
responsible government: report of the National Commission of Audit: phase 1 report, NCOA, February 2014,
p. 215, accessed 4 May 2015.
[7]. Ibid.,
p. 206
[8]. Ibid.,
p. 204.
[9]. M
Cormann (Minister for Finance), Delivering
a smaller, more rational government, media release, 13 May 2014,
accessed 4 May 2015.
[10]. Ibid.
[11]. Australian
Government, Smaller
government: towards a sustainable future, Ministerial paper, December
2014, p. 2, accessed 4 May 2015.
[12]. Ibid.,
p. 3.
[13]. Ibid.
[14]. In
simple terms, a defined benefit-style super scheme means that person’s super
benefit will generally be determined by a formula. That formula is usually
based on a combination of factors including: an employee’s average salary,
years of work leading up to retirement and a person’s age. In comparison,
accumulation-style superannuation involves the contributions made to a person’s
account being invested so as to generate earnings which may be positive or
negative. Many superannuation schemes have both a defined benefit component and
an accumulation component.
[15]. ComSuper,
Annual
report 2013–14, 2014, pp. 134 to 137, accessed 12 May 2015;
Commonwealth Superannuation Corporation, Annual
report 2013–14, pp. 46–65, accessed 12 May 2015.
[16]. Commonwealth
Superannuation Corporation (CSC), ‘Who we are’, CSC website, accessed 5 May
2015.
[17]. Commonwealth
Superannuation Corporation, Annual report 2013–14, op. cit., p. 34.
[18]. Governance of Australian
Government Superannuation Schemes Act 2011, section 26, accessed
5 May 2015.
[19]. ComSuper Act 2011,
section 4, accessed 6 May 2015. The entity ComSuper has its origins in the
Superannuation Fund Management Board, which was formed in 1922 to administer the
first superannuation scheme for Commonwealth employees (ComSuper, ‘A history of
Commonwealth superannuation’, ComSuper website, accessed 4 May 2015).
[20]. ComSuper,
‘The schemes’, ComSuper
website, accessed 4 May 2015.
[21]. ComSuper,
‘What we do’,
ComSuper website, accessed 4 May 2015.
[22]. ComSuper,
Annual
report 2013–14, op. cit., p. 62.
[23]. Ibid.,
p. 14.
[24]. PSSap Trust Deed,
accessed 6 May 2015.
[25]. Commonwealth
Superannuation Corporation, Annual report 2013–14, op. cit., pp. 58–59.
[26]. Commonwealth
Superannuation Corporation (CSC), ‘PSSap: your
choice’, CSC website, accessed 24 March 2015.
[27]. Commonwealth
Superannuation Corporation (CSC),’How PSSap works: costs’,
CSC website, accessed 24 March 2015.
[28]. N
Sherry, ‘Second
reading speech: Superannuation Bill 2005 and Superannuation (Consequential
Amendments) Bill 2005’, Senate, Debates, 23 June 2005, p. 174,
accessed 24 March 2015.
[29]. Australian
Government, Mid‑year
economic and fiscal outlook 2014–15, December 2014, p. 145. This
measure was included as a ‘decision taken but not announced in the 2014–15
budget and therefore appears as having a zero benefit over the forward
estimates in the Mid-year economic and fiscal outlook.
[30]. Ibid.
[31]. Explanatory
Memorandum, op. cit., p. 6.
[32]. This
is calculated by dividing the estimated annual savings ($26.8 million over
four years equals $6.7 million per year) by the number of PSSap members as
at 30 June 2014 (130,112) (CSC 2013–14 annual report, p. 58).
[33]. W
Chant M Mohankumar and G Warren, MySuper:
a new landscape for default superannuation funds, Centre for
International Finance and Regulation (CIFR), Research report, April 2014,
p. 17, accessed 4 May 2015.
[34]. Senate
Finance and Public Administration Committee, Answers to Questions on Notice,
Finance Portfolio, Additional Estimates 2014–15, 24 February 2015, Question
F10, accessed 11 May 2015.
[35]. Senate
Selection of Bills Committee, Report
No. 4 of 2015, 26 March 2015, p. 2, accessed 4 May 2015.
[36]. Senate
Finance and Public Administration Committee, ‘Governance
of Australian Government Superannuation Schemes Legislation Amendment Bill 2015’,
Committee website, accessed 4 May 2015.
[37]. Senate
Finance and Public Administration Committee, Governance
of Australian Government Superannuation Schemes Legislation Amendment Bill 2015
[Provisions], The Senate, Canberra, May 2015, p. 10, accessed
11 May 2015.
[38]. Ibid.,
p. 11.
[39]. Senate
Standing Committee for the Scrutiny of Bills, Alert
Digest No. 4 of 2015, The Senate, 25 March 2015, pp. 32–34,
accessed 5 May 2015.
[40]. Parliamentary
Joint Committee on Human Rights, Twenty-first
Report of the 44th Parliament, The Senate, 24 March 2015, p. 1,
accessed 13 May 2015.
[41]. Community
and Public Sector Union (CPSU), Submission
to the Finance and Public Administration Committee, Inquiry into the
Governance of Australian Superannuation Schemes Legislation Amendment Bill 2015,
14 April 2015, p. 1, accessed 5 May 2015.
[42]. Ibid.
[43]. Explanatory
Memorandum, op. cit., p. 6.
[44]. Ibid.
[45]. The
Statement of Compatibility with Human Rights can be found at page 6 of the
Explanatory Memorandum to the Bill.
[46]. Senate
Finance and Public Administration Committee, Answers to Questions on Notice,
Finance Portfolio, Additional Estimates 2014–15, 24 February 2015, Question
F8, accessed 11 May 2015.
[47]. Australian
Government, Portfolio
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p. 140, accessed 11 May 2015.
[48]. Governance of Australian
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[49]. Explanatory
Memorandum, op. cit., p. 11.
[50]. Ibid.
[51]. This
Act provided the same-sex partner of a beneficiary in a Commonwealth (defined
benefit) superannuation scheme direct access to reversionary death benefits on
the death of the beneficiary. The Act provides the power for the CEO of
ComSuper to recover payments if required.
[52]. Community
and Public Sector Union, op. cit., p. 2.
[53]. Ibid.
[54]. ComSuper,
Submission
to the Finance and Public Administration Committee, Inquiry into the
Governance of Australian Superannuation Schemes Legislation Amendment Bill 2015,
April 2015, accessed 6 May 2015.
[55]. Australian
Public Service Commissioner, Submission
to the Finance and Public Administration Committee, Inquiry into the
Governance of Australian Superannuation Schemes Legislation Amendment Bill 2015,
17 April 2015, p. 1, accessed 5 May 2015.
[56]. Commonwealth
Superannuation Corporation, Submission
to the Finance and Public Administration Committee, Inquiry into the
Governance of Australian Superannuation Schemes Legislation Amendment Bill 2015,
16 April 2015, p. 2, accessed 6 May 2015.
[57]. Explanatory
Memorandum, op. cit., p. 33.
[58]. Senate
Scrutiny of Bills Committee, op. cit., p. 33.
[59]. Superannuation Act 2005,
accessed 13 May 2015.
[60]. Superannuation (PSSAP)
(Division of Costs) Determination 2005, Schedule 2, accessed 4 May
2015.
[61]. Office
of Parliamentary Counsel, Drafting
Direction No. 3.1: constitutional law issues, Document release 4.0,
reissued October 2012, p. 2, accessed 6 May 2015.
[62]. Explanatory
Memorandum, op. cit., p. 4.
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