Bills Digest No. 52  1998-99 Commonwealth Superannuation Board Bill 1998

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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.


Passage History
Main Provisions
Contact Officer and Copyright Details

Passage History

Commonwealth Superannuation Board Bill 1998

Date Introduced: 12 November 1998

House: House of Representatives

Portfolio: Finance and Administration

Commencement: Except as otherwise noted in the Main Provisions section, on Royal Assent


To create a new Commonwealth Superannuation Board that will replace the current boards responsible for the Commonwealth Superannuation Scheme (CSS), the scheme that replaced CSS, the Public Sector Superannuation (PSS) Board, and other, minor, Commonwealth superannuation schemes..


Current Commonwealth employees in both the general public service and in a number of Commonwealth authorities may be covered by either the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS). For new employees, entrance to the CSS was terminated on the introduction of the PSS in 1 July 1990, however as at 30 June 1997 there were 68 549 members of the CSS.(1) PSS has a larger membership which reflects not only the closure of the CSS but also the transfer of members from the CSS to the PSS. As at 30 June 1997, there were 114 123 members of the PSS.(2)

Both CSS and PSS are defined benefit schemes so that the benefits a member will receive, other than interest on their own contributions, is not dependent on the earnings of the fund but is defined in the legislation and trust deeds that created the funds. The CSS and PSS are also unfunded schemes, which means that the final, defined benefit from notional employer contributions is payable from the Consolidated Revenue Fund rather than from the earnings on employer contributions.

CSS and PSS are administered by the CSS Board and the PSS Board respectively which have responsibility for ensuring that the relevant legislative and trust deed requirements are complied with. However, both the CSS and PSS Boards have delegated the bulk of their administrative powers and responsibilities to Commonwealth Superannuation Administration (ComSuper). ComSuper performs tasks such as keeping records of members, receiving contributions and the payment of benefits. However, major roles such as investment decisions remain with the CSS and PSS Boards.

Currently, the membership of the CSS and PSS Boards are substantially the same. The CSS Board has 7 members while the PSS Board has 5 members. The 5 members of the PSS Board are also members of the CSS Board. As at 30 June 1997, the allocation of investments for CSS and PSS were identical, with both having 40% of its portfolio in international shares, 33% in Australian shares, 10% in Australian fixed interest, 15% in Australian property and 2% in cash. Similarly, as can be expected due to the same portfolio allocation, the performance of the CSS and PSS was identical in 1996-97 with a rate of return of 18% after tax and fees.(3)

When announcing the details of the choice of superannuation funds for Commonwealth employees, which will also involve the closure of PSS, the Minister's Media Release, dated 20 November 1997, stated: 'The CSS and PSS Boards will be amalgamated into a single Board.'

While no detailed explanation for the amalgamation has been given, the similarities between the membership of the CSS and PSS Boards and their identical overall portfolio allocations should mean that the amalgamation will have little, if any, practical affect on members of CSS and PSS. This is also reinforced by the nature of the schemes as defined benefit funds where investment performance is of less relevance to final member benefits than non-defined benefits schemes.

This Bill is essentially the same as one of the same name introduced in December 1997 but which failed to pass both House of Parliament before it was perouged for the 1998 General election. The major difference is in the commencement date, which has been postponed due to the delay in the passage of the 1997 Bill.

Main Provisions

The Commonwealth Superannuation Board (the Board) will be formally established by clause 5 and is to be a corporation (clause 6).

The functions and powers of the board are contained in Part 3 of the Bill. Clause 7 provides that the powers and functions of the Board will include:

  • the general administration of the superannuation legislation that established the various Commonwealth superannuation schemes;
  • such functions and powers in relation to non-statutory superannuation instruments, such as trust deeds, relating to Commonwealth employees or others in the service of the Commonwealth, as are conferred by the Minister; and
  • that in a case where the operation of a statutory or non-statutory superannuation instrument is such that, in the Board's opinion, its operation would produce a result that is not in the spirit of the statute or instrument, the Board may vary the components relating to a benefit or determine that a benefit is payable where it would otherwise not be.

Clause 8 will give the Minister and the Board power, subject to the Superannuation Industry (Supervision) Act 1993 (SIS), power to alter the operation of the provisions currently regulating superannuation for Commonwealth employees or others in the service of the Commonwealth who contribute to the various schemes. Subclause 8(1) authorises the Minister to make determinations that will vary the operation of the relevant legislation and non-statutory instruments that relate to Commonwealth employees and other covered by Commonwealth superannuation schemes. The Minister will also be given power to issue statements to the Board regarding the operation of the relevant legislation or non-statutory rules.

Subclauses 8(3) and 8(4) provide that if the Minister makes such a statement the Board may make an instrument giving effect to the Ministers statement. Specifically, the Board will be able to make a determination that will implement the Ministers statement, ensuring that the laws relating to superannuation are complied with or will simplify the operation of the various statutory or non-statutory rules relating to superannuation for Commonwealth employees or others eligible for Commonwealth superannuation. However, the above provisions relating to the power of the Board to make determinations will not apply to members of the CSS or PSS whose entitlements are determined under the appropriate legislation [subclause 8(6)]. In exercising its powers the Board is to have regard to the purpose and intent of the legislation or instrument, the interests of the people involved and the interests of the Commonwealth [subclause 8(8)]. Such a determination will be a disallowable instrument [subclause 8(10)].

Clause 9 provides that unless the legislation creating the Commonwealth superannuation schemes provides otherwise, the Board is to comply with SIS.

Commencement: Part 3 will commence on 1 July 1999.

Part 4 contains administrative provisions. Clause 10 provides that the Board is to have 7 members, 3 appointed by the Minister and 3 elected by members of the relevant superannuation schemes and those with preserved benefits in the schemes. The seventh member is to be the Chairperson and is to be appointed by the Minister after consultation with the 6 members referred to above. The Minister is to determine the method for the election of the 3 elected members. An appointed person may be appointed for a maximum of 3 years, while elected members are elected for 3 years.

Other provisions of Part 4 contain standard administrative provisions, relating to matters such as acting Chairperson and members (elected members must be replaced by an election); remuneration (to be determined by the Remuneration Tribunal); meetings; disclosure of interests; and delegations by the Board.

Clauses 23 and 24 provide that the cost of management relating to a particular fund are to be met by that fund and that the Board may make a determination of the estimated costs to the various funds during a year and that the Minister may direct the various funds to contribute to the proposed Board.

Commencement: Clauses 23 and 24 commence on 1 July 1999.

Other provisions of the Bill deal with routine matters, such as exemption from taxation for the amalgamation process; accounting; audits; and the presentation of an annual report.


  1. CSS Board, Annual Report 1996-97, 32.

  2. PSS Board, Annual Report 1996-97, 32.

  3. Ibid., 23-25.

Contact Officer and Copyright Details

Chris Field
2 December 1998
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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ISSN 1328-8091
© Commonwealth of Australia 1998

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Published by the Department of the Parliamentary Library, 1998.

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