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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-04-04 Daily Xml
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LOCAL GOVERNMENT (SUPERANNUATION SCHEME) (MERGER) AMENDMENT BILL

Introduction and First Reading

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for the Public Sector) (12:00): Obtained leave and introduced a bill for an act to amend the Local Government (Superannuation Scheme) Amendment Act 2008. Read a first time.

Second Reading

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for the Public Sector) (12:00): I move:

That this bill be now read a second time.

I seek leave to have the detailed explanation of the bill and clauses inserted in Hansard without my reading it.

Leave granted.

This Bill seeks to make amendments to the Local Government (Superannuation Scheme) Amendment Act 2008.

The Local Government Superannuation Scheme is a Commonwealth regulated superannuation scheme conducting business as the Local Super Scheme. The scheme essentially ceased to be subject to State legislation following the enactment of the Local Government (Superannuation Scheme) Amendment Act 2008 and the expiry of Part 2 of Schedule 1 of the Local Government Act 1999 in January 2012.

The Local Government (Superannuation Scheme) Amendment Act 2008 required the scheme to be continued in existence under a trust deed prepared by the Local Government Superannuation Board. Since 1 January 2009, Local Super has been governed by a trust deed and its trustee has been the private company, Local Super Pty Ltd. Local Super also now operates as a public offer fund, and any employer can make contributions to the scheme for his or her employee.

The recent release of the Federal Government's Cooper Review into the operation of Australia's superannuation system has encouraged superannuation funds to consider merger and acquisition opportunities. Against that background, Local Super and Statewide Super have publicly announced that they are interested in a possible merger. This Bill therefore seeks to make a minor amendment to a transitional provision of the Local Government (Superannuation Scheme) Amendment Act 2008 that would, unless amended, prevent the possible merger of Local Super with another superannuation fund, and the possible winding up of Local Super.

The central provision of this Bill is therefore the proposal that Clause 2 of Schedule 1 of the Local Government (Superannuation Scheme) Amendment Act 2008, which currently provides that the Local Government Superannuation Scheme is to continue in existence under a trustee deed, be amended to allow for the possible future merger of the Local Government Superannuation Scheme with some other scheme that may result in the discontinuance of the scheme in its own right and under its current name. The Bill also contains a number of consequential amendments to other transitional provisions of the Local Government (Superannuation Scheme) Amendment Act 2008.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Amendment provisions

These clauses are formal.

Part 2—Amendment of Local Government (Superannuation Scheme) Amendment Act 2008

3—Amendment of Schedule 1—Transitional provisions

This clause amends the transitional provisions of the Local Government (Superannuation Scheme) Amendment Act 2008 so as to allow for a merger of the Local Government Superannuation Scheme with another superannuation scheme.

Clause 2 of the transitional provisions currently provides that the Scheme is to continue in existence under a trust deed prepared by the Board. As amended, the clause will allow for the Scheme to continue in existence under another trust deed following a merger (or subsequent merger) of the Scheme with another superannuation scheme pursuant to a transfer of the benefits of the members of the scheme to a successor fund. A successor fund is a superannuation fund that confers on members equivalent rights to the rights that they had under the original fund in respect of members' benefits. Before the transfer, the trustee of the fund must have agreed with the trustee of the original fund that the fund will confer on the member equivalent rights to the rights that the member had under the original fund in respect of the benefits.

If a merger occurs, a council or other authority or body that is a participating employer for the purposes of the new scheme immediately before the merger will be taken to be a signatory to the trust deed under which the Local Government Superannuation Scheme continues in existence following the merger. A reference to 'the new scheme' in Schedule 1 as amended will not apply in relation to the Local Government Superannuation Scheme as continued in existence following a merger.

The Schedule includes a number of provisions that apply in relation to the Local Government Superannuation Scheme as continued in existence under the trust deed prepared by the Board but will not apply if a merger occurs. For example, clause 5(4) provides that a company established by the Board is to continue to hold office as trustee. This requirement will not apply if there is a merger of the scheme with another superannuation scheme as contemplated by the Schedule as amended.

Debate adjourned on motion of Mr Pederick.

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