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
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