SOUTHERN STATE SUPERANNUATION BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (19:56): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill deals with the Triple S contributory superannuation scheme for persons employed in the public sector.

The Bill proposes the replacement of the existing statute that establishes the Triple S scheme with a new Act that will continue the scheme.

The principal purpose of this Bill is to remove from the Act establishing the scheme the detailed prescriptive scheme rules, and provide for those rules to be prescribed in subordinate legislation.

The Triple S scheme is not being changed under this legislation. What is effectively occurring is that the enabling legislation is being simplified with the detailed prescriptive scheme rules to be transferred to regulations.

With superannuation rules and standards constantly changing, often to meet Commonwealth requirements, this restructuring of the enabling legislation will enable much quicker responses to required changes to scheme rules. Often changes to scheme rules need to be implemented at relatively short notice in order to meet new industry standards or Commonwealth requirements. Being able to change scheme rules quickly is often necessary to prevent inconvenience to members and prevent them from being disadvantaged by necessary changes to rules being delayed.

This restructuring of the enabling legislation will have no impact on members of the scheme, nor to their accrued entitlements. The scheme rules that are currently in the Southern State Superannuation Act are to be removed under the legislation contained in this Bill and prescribed in regulations under the new Act.

The restructure reflected in this Bill is strongly supported by the South Australian Superannuation Board, which is the body responsible for administering the Triple S scheme.

Notwithstanding that the aim of this restructure is the transfer of the prescriptive rules to subordinate legislation, there are a number of basic features of the scheme that the Government believes should remain in the Act. Accordingly, this Bill provides for those matters, features or principles to remain in the Act. These matters, features, or principles include; the feature and principle that where a member of the scheme makes personal after tax contributions to the scheme of at least 4.5 per cent of salary, the contribution by the employer shall be 10 per cent of salary; a continuation of the 'putative spouse' concept in the current statute; the power of the Board to require an employer, a workers compensation authority, a member or a spouse member to supply the Board with any information that it requires for the purposes of the Act; the important privacy and confidentiality provisions; and the power of the Board to resolve any doubts and difficulties that arise in the application of the Act or regulations to particular circumstances, or where the provisions of the Act or the regulations do not address particular circumstances that have arisen.

Since the main aim of this legislation is to have most of the prescriptive scheme rules provided in regulations, the regulation making provisions in the Bill are much more extensive than in the existing Act. Whilst the regulation making powers are more extensive, they are simply wide enough to cover those matters that need to be dealt with by having the detailed prescriptive rules in regulations. The regulation making provisions in the legislation will also make it a condition that any regulation may not reduce the amount of a person's accrued benefits unless the regulation is necessary to ensure compliance with a Commonwealth law, to rectify a mistake or error, or to facilitate the division under the Commonwealth's Family Law Act, of superannuation interests between spouses who have separated. This provision will re-assure members about this restructure.

The post retirement investment product arrangements whilst not strictly part of the Triple S scheme, are to be continued under this legislation. However, under the restructure, the prescriptive rules and terms and conditions for the post retirement product arrangements are to be also dealt with by subordinate legislation.

The Bill contains a number of amendments to other Acts that are related to the amendments contained in this legislation. A number of transitional provisions are also proposed with the majority of the provisions relating to the transfer of members of the former Police Lump Sum Scheme to Triple S on 1 July 2008. These transitional provisions relating to police officers maintain some of the transitional provisions legislated under the Statutes Amendment (Police Superannuation) Act 2008. Only those transitional provisions that will continue to serve a purpose are to be continued in this new legislation.

Whilst the Bill will continue the Triple S scheme with no change to the benefit structure and with no impact on members, the opportunity has been taken in this legislation to make two amendments to the current administrative arrangements. The Triple S scheme currently has two separate and distinct funds holding the assets of the scheme. There is the Southern State Superannuation Fund that holds the money contributed by members, the co-contribution money paid to members by the Commonwealth, the members' money rolled over from other funds, and the investment earnings on those funds. The second fund is the Southern State Superannuation (Employers) Fund that holds the money contributed by employers and the investment earnings on those funds. So the first administrative change contained in this Bill proposes that in the future there be only one fund formed from the amalgamation of the existing two funds. The ongoing fund will be the Southern State Superannuation Fund. There will be administrative benefits in having the assets backing the scheme held in one fund. Furthermore, there is no reason to continue holding the assets of the Triple S scheme in two separate funds.

The other change to the administrative arrangements deals with employers. Under the existing scheme, only those employers who are entities of the Crown are eligible to be participating employers and accordingly have employees as members of the scheme. Under this Bill, it is proposed to introduce an arrangement under which an 'approved employer' can enter into an arrangement with the Superannuation Board for the purposes of providing eligibility for employees of that employer to be members of Triple S. The 'approved employer' will of course be required to make the employer contributions necessary under the terms of the scheme. The legislation defines an 'approved employer' to be an instrumentality or agency of the Crown in right of the Commonwealth or any State or Territory; or any other authority, body or person. The proposed provision is similar to Section 5 of the Superannuation Act 1988. It is envisaged that only statutory bodies, or entities that receive the majority of their funding from government would be considered for approval by the Minister under this proposed new provision.

In preparing this Bill, the Government has consulted extensively with the Superannuation Board, the Superannuation Federation, the Public Service Association, the Australian Education Union and the Police Association.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

The date for commencement of the measure will be fixed by proclamation.

3—Interpretation

This clause provides definitions of various terms used in the measure.

The Board is the South Australian Superannuation Board continued in existence by the Superannuation Act 1988. The Fund is the Southern State Superannuation Fund, which is continued in existence by the Act - see section 10. A member is a person who is a member of the Triple S scheme by virtue of section 19, which deals with membership. A police member is a police officer who is a police member of the Triple S scheme by virtue of regulations made under section 19. The term spouse includes a putative spouse, which is defined in section 7.

4—Continuation of Triple S scheme

The Southern State Superannuation Act 2009 will continue the scheme of superannuation established by the Southern State Superannuation Act 1995. The scheme will continue to be known as the 'Southern State Superannuation Scheme' or the 'Triple S scheme'.

5—Employer contribution percentage

The employer contribution percentage applicable in respect of a member (that is, the percentage of the member's salary that is to be paid to the Treasurer by the member's employer and credited to his or her contribution account) is to be fixed by regulation. However, subsection (3) specifies that where an employer contribution percentage is not fixed by the regulations for a particular member, the relevant employer contribution percentage will be 9 per cent. If the member is making personal contributions at a rate of at least 4.5 per cent, the relevant employer contribution will be 10 per cent.

6—Participating employers

This clause permits the South Australian Superannuation Board to enter into arrangements with employers for the purpose of allowing employees to become eligible to be accepted as members of the scheme. The Board cannot enter into an arrangement with an employer unless the employer is an instrumentality or agency of the Crown in right of the Commonwealth or a State or Territory, or any other authority, body or person, that has been approved by the Minister.

7—Putative spouses

This clause sets out the procedure for determining whether or not a person is the putative spouse of another person for the purposes of the Act. A person may apply to the District Court for a declaration that he or she and another person were putative spouses on a particular date.

8—Restriction on publication of court proceedings

This clause imposes restrictions on the publication of information relating to proceedings before the District Court under proposed section 7.

Part 2—Administration

Division 1—The Board

9—Function of Board

The Board is responsible to the Minister for all aspects of the administration of the Act (other than the management and investment of the Southern State Superannuation Fund) and is to provide advice to the Minister.

Division 2—The Southern State Superannuation Fund

10—The Fund

This clause continues the Southern State Superannuation Fund, which is subject to the management and control of the Superannuation Funds Management Corporation of South Australia. The Treasurer is required to pay the following into the Fund:

periodic contributions reflecting the contributions paid to the Treasurer by members and spouse members;

the amount of co-contributions paid or transferred to the Board on behalf of a member or spouse member;

an amount or amounts rolled over from another superannuation fund or scheme to the Triple S scheme;

payments to the Treasurer by employers as required by proposed section 21;

payments to the Treasurer by or on behalf of employers as required under the regulations.

The clause requires that all earnings arising from investment of the Fund be paid into the Fund.

11—Investment of Fund

The Fund is to be invested in a manner determined by the Superannuation Funds Management Corporation of South Australia.

Division 3—Accounts

12—Accounts

This clause requires the Board to maintain contribution accounts, rollover accounts and co-contribution accounts for members and spouse members. Accounts are to be maintained in accordance with requirements specified in the regulations. The clause operates subject to regulations that may make further provision in relation to the maintenance of accounts.

The Board is required to establish a scheme under which each member's or spouse member's beneficial interest in the Fund, as held in the accounts of the Board, is represented by 1 or more units, with each unit being an undivided beneficial interest in the Fund.

13—Accretions to accounts

Contribution accounts, rollover accounts and co-contribution accounts that have a credit balance are to be adjusted by the Board from time to time to reflect movements in the value of units allocated to accounts under the scheme established by the Board pursuant to proposed section 12. In determining movements in the value of each unit of beneficial interest held in the name of each member or spouse member, the Board must have regard to the earnings achieved on the class of investments in which the accounts of a member or spouse member are allocated.

If a member or spouse member has nominated a class of investments or combination of classes of investments under section 14, the Board is to have regard to the earnings achieved on the nominated class or combination of classes when determining movements in the value of each unit of beneficial interest held in the name of the member or spouse member.

14—Investment choice

This clause authorises the Board to permit members and spouse members, on such terms and conditions as the Board thinks fit, to nominate the class of investments, or the combination of classes of investments, for the purpose of determining adjustments to be made to accounts under proposed section 13. Where a member or spouse member has not made a nomination, the Board is to allocate the accounts of the member or spouse member to a class of investments according to a determination of the Board.

15—Other accounts to be kept by Board

The Board is required under this clause to maintain proper accounts of—

receipts of members' contributions, spouse members' contributions and employer contributions; and

payments to, on behalf of, or in respect of, members and spouse members; and

payments made from members' contribution accounts to spouse accounts; and

amounts transferred from spouse accounts to other accounts for the purpose of amalgamating accounts.

The Board is also required to prepare financial statements and to maintain other accounts as required by the regulations.

16—Reports

This clause requires the Board to submit an annual report to the Minister on the operation of the Act during the financial year ending on 30 June in each year. Copies of the report are to be laid before both Houses of Parliament.

17—Report as to cost and funding of insurance benefits

This clause requires the Minister to obtain an annual report on the cost and funding of insurance benefits (including disability pensions) provided through the scheme. Copies of the report are to be laid before both Houses of Parliament.

Division 4—Payment of benefits

18—Payment of benefits

Payments made under the Act are to be made by the Treasurer out of the Consolidated Account or out of a special deposit account (ie, a special deposit account established under section 8 of the Public Finance and Audit Act 1987) established by the Treasurer for the purpose.

If a payment includes an amount standing to the credit of a contribution account, a rollover account or a co-contribution account, an amount equal to the amount of the payment is to be charged against the appropriate account. The Treasurer is required to reimburse the Consolidated Account or special deposit account by charging the Fund with that amount.

Part 3—Membership and contributions

19—Membership of scheme

This clause deals with membership of the Triple S scheme.

The following are members of the scheme:

persons in relation to whom the Crown, or an agency or instrumentality of the Crown, is liable to pay a superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth;

persons who—

are employed by a participating employer; and

have been accepted as members of the scheme;

persons who were members of the Triple S scheme immediately before the repeal of the Southern State Superannuation Act 1994.

The clause provides for the regulations to make further provision in relation to membership and spouse membership of the Triple S scheme. The regulations can, for example, provide—

that particular persons, or particular classes of persons are, or are not, members of the scheme; or

that a police officer who is a member of the scheme is, or is not, a police member of the scheme; or

that a person who is or was the spouse of a member is, subject to conditions specified in the regulations, a spouse member of the scheme; or

that a specified provision of the Act does not apply, or applies subject to prescribed modifications, to a member or a class of members, or to a spouse member or a class of spouse members.

20—Contributions

Under this clause, members may elect to make contributions to the Triple S scheme as a deduction from salary. Most police members are required to make contributions to the Treasurer as a deduction from salary at a rate that equals or exceeds the prescribed percentage. Members who are making contributions to the scheme as a deduction from salary may make additional monetary contributions.

Regulations made under this clause may provide that particular members, or particular classes of member, are not entitled to make contributions under the clause or must contribute at a specified rate. The regulations may also require specified members, or members of a specified class, to make contributions to the Treasurer as a deduction from salary at a prescribed rate.

21—Payments by employers

This clause requires an employer, within a specified period following the payment of salary to a member, to pay an amount to the Treasurer. The amount is to be determined by reference to the employer contribution percentage applicable in respect of the member and in accordance with the formula set out in subclause (1).

Part 4—Miscellaneous

22—Insurance benefits

Invalidity insurance, death insurance and a disability pension are to be provided through the scheme for members. Death insurance is to be provided for spouse members. The terms and conditions of insurance are to be prescribed by regulation.

23—Rollover of money from other funds or schemes

This clause provides for money rolled over to the Triple S scheme from another superannuation fund or scheme to be paid to the Treasurer.

24—Employer benefits and contributions if member on leave without pay

This clause provides that where a member is on leave without pay, the Minister may, at the request of the employing authority, direct that section 21 (relating to employer contributions) and any relevant provision of the regulations will apply in relation to the member as though he or she were not on leave without pay. The member will be taken, for that purpose, to be receiving the salary that he or she would have received if he or she were not on leave without pay.

25—Review of Board's decision

A person who is dissatisfied with a decision of the Board under this Act may, under this clause, appeal to the Administrative and Disciplinary Division of the District Court or to the Board against the decision.

26—Power to obtain information

This clause authorises the Board to require an employing authority, a workers compensation authority, a member or a spouse member to supply the Board with any information that it reasonably requires for the purposes of the Act.

27—Delegation by Board

This clause authorises the Board to delegate its powers under the Act. A delegation—

must be by instrument in writing; and

may be conditional or unconditional; and

does not derogate from the power of the Board to act in any matter; and

is revocable at will by the Board.

28—Confidentiality

This clause makes it an offence for a member or former member of the Board or the board of directors of the Superannuation Funds Management Corporation of South Australia, or a person employed or formerly employed in the administration of the Act, to divulge information of a personal or private nature, or information as to the entitlements or benefits of a person under the Act, except—

as required by or under an Act of the State or the Commonwealth; or

to, or with the consent of, the person; or

to that person's employing authority; or

to another person for purposes related to the administration of the Act; or

as may be required by a court.

The clause also provides that a member or former member of the Board or the board of directors of the Superannuation Funds Management Corporation of South Australia, or a person employed or formerly employed in the administration of the Act, must not divulge information if to divulge the information is inconsistent with a requirement imposed on the trustee of an eligible superannuation plan under Part VIIIB of the Family Law Act 1975 of the Commonwealth.

These provisions do not prevent the disclosure of statistical or other information related to members or spouse members generally or to a class of members or spouse members rather than to an individual member or spouse member.

29—Resolution of difficulties

If, in the opinion of the Board, a doubt or difficulty has arisen in the application of the Act or the regulations to particular circumstances or the provisions of the Act or the regulations do not address particular circumstances that have arisen, the Board may give directions reasonably necessary to resolve the doubt or difficulty or to address the circumstances. A direction will have effect according to its terms.

The clause also authorises the Board to extend a time limit or waive compliance with a procedural step if of the opinion that the extension or waiver is necessary.

30—Regulations

This clause authorises the making of such regulations as are contemplated by, or necessary or expedient for the purposes of, the Act.

Subclause (2) lists a number of matters in relation to which regulations may be made:

administration of the scheme;

contributions to be made to the Fund;

charges to be made against the Fund;

accounts and other records to be kept by the Board;

benefits and how and when they are paid or dealt with;

the division under the Family Law Act 1975 of the Commonwealth of superannuation interests between spouses who have separated;

provision by the Board of investment services and other products and services.

This clause provides that regulations under the Act may, in limited circumstances, modify the operation of a provision of the Superannuation Act 1988 or the Police Superannuation Act 1990. It is necessary for the regulations to be able to modify the operation of the Superannuation Act 1988 and the Police Superannuation Act 1990 in their application to certain members because some members of the Triple S scheme will also be members of schemes of superannuation established by those other Acts and there may be the potential for such a member to be entitled to, for example, a disability pension under more than 1 superannuation scheme.

Regulations under the Act will ordinarily come into operation 4 months after the day on which they are made but may come into operation at an earlier time if—

they revoke a regulation without making provision in substitution for that regulation; or

they correct an error or inaccuracy in a regulation; or

they are required to ensure that the scheme is consistent with an Act that comes into operation on assent or less than 4 months after assent; or

they are required to ensure that the scheme complies with a provision of the Superannuation Industry (Supervision) Act 1993 of the Commonwealth; or

they confer a benefit or right on a person (other than the Board); or

the Minister certifies that the Minister is satisfied that it is necessary or appropriate that the regulations come into operation on the specified day.

The regulations cannot reduce the amount of a person's accrued benefits unless the regulations are necessary—

to ensure compliance with a law of the Commonwealth; or

to rectify a mistake; or

to facilitate the division under the Family Law Act 1975 of the Commonwealth of superannuation interests between spouses who have separated.

Schedule 1—Related amendments, repeal and transitional provisions

Part 1—Preliminary

1—Amendment provisions

This clause is formal.

Part 2—Amendment of Police Superannuation Act 1990

2—Amendment of section 4—Interpretation

3—Amendment of section 13A—Investment option

4—Amendment of section 34—Resignation and preservation of benefits

5—Amendment of section 38G—Interpretation

The amendments made to the Police Superannuation Act 1990 by these clauses are consequential on the enactment of the Southern State Superannuation Act 2009.

Part 3—Amendment of Subordinate Legislation Act 1978

6—Amendment of section 16A—Regulations to which this Part applies

Part 3A of the Subordinate Legislation Act 1978 provides for the expiry of regulations on 1 September of the year following the tenth anniversary of the day on which the regulations were made. As a consequence of the amendment made by this clause to section 16A of that Act, Part 3A will not apply to regulations made under the Southern State Superannuation Act 2009.

Part 4—Amendment of Superannuation Funds Management Corporation of South Australia Act 1995

7—Amendment of section 3—Interpretation

The amendment made to the Superannuation Funds Management Corporation of South Australia Act 1995 by this clause is consequential on the enactment of the Southern State Superannuation Act 2009.

Part 5—Repeal of Southern State Superannuation Act 1994

8—Repeal of Act

This clause repeals the Southern State Superannuation Act 1994.

Part 6—Transitional provisions

9—Interpretation

This clause provides definitions of a number of terms required for the purposes of the transitional provisions. The new scheme is the Southern State Superannuation Scheme continued in existence under the 2009 Act. The old scheme is the Southern State Superannuation Scheme under the 1994 Act.

The relevant day is the day on which the Southern State Superannuation Act 1994 is repealed.

10—Southern State Superannuation (Employers) Fund

This clause dissolves the Southern State Superannuation (Employers) Fund and incorporates the money constituting that Fund immediately before the relevant day into the Southern State Superannuation Fund. The balance of a member's employer contribution account immediately before the repeal of the Southern State Superannuation Act 1994 will be credited to the member's contribution account.

11—Balances of accounts

Under this clause, an account maintained by the Board for the purposes of the old scheme immediately before the relevant day (other than an employer contribution account) is to be continued under the new scheme. The balance on the relevant day of an account continued under the new scheme is to be equivalent to the balance of the account immediately before that day.

12—Former members of Police Superannuation Scheme

This clause preserves the rights and entitlements of former members of the Police Superannuation Scheme who were transferred to the Triple S scheme on the enactment of the Statutes Amendment (Police Superannuation) Act 2008.

13—Children in receipt of pension under Police Superannuation Act 1990

This clause also relates to the enactment of the Statutes Amendment (Police Superannuation) Act 2008, which repealed section 26 of the Police Superannuation Act 1990. A pension paid to a child under that section will continue to be paid to the child as if the section had not been repealed.

14—Amounts preserved for certain contributors to Police Superannuation Scheme

This clause preserves the application of relevant provisions to certain rollover accounts established under the Statutes Amendment (Police Superannuation) Act 2008 for members of the Police Superannuation Scheme.

15—Operation of nominations and elections under old scheme

The operation of nominations and election made by members and spouse members under the old scheme are preserved by this clause.

16—Insurance and disability pension

This clause ensures that insurance cover enjoyed by a person under the old scheme immediately before the relevant day will continue under the new scheme at the same level and, subject to the regulations, with the same terms and conditions.

17—Other provisions

This clause provides for the making by regulation of additional provisions of a saving or transitional nature consequent on the enactment of the Act or on the amendment of the Act by another Act.

Debate adjourned on motion of Hon. D.W. Ridgway.