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Superannuation Legislation
Amendment Bill 2008
Introduction Print
EXPLANATORY MEMORANDUM
General
The Bill will--
· allow all members (active members, deferred beneficiaries, and
pension recipients) of the former State Superannuation Fund (SSF),
and their spouses, to access the ESSPLAN accumulation and post-
retirement products;
· allow such persons to make contributions of a concessional and non-
concessional nature and permit the acceptance of rollovers and
transfers from other superannuation funds into ESSPLAN
accumulation and post-retirement products;
· provide benefits to returning members as provided for in the Victoria
Police Workplace Agreement 2007;
· permit the Emergency Services Superannuation Board (ESSB) to offer
ESSPLAN members access to binding death benefit nominations in
accordance with the Commonwealth's Superannuation Industry
Supervision Regulations 1993 (SIS);
· provide the ESSB with the power to contract a third party for the
express purpose of providing financial advice to members;
· clarify that in carrying out its duties the ESSB must have regard to the
interests of contributing employers (as well as the interests of Scheme
members); and
· make an unrelated amendment to the Victorian Managed Insurance
Authority Act 1996 to extend from one year to five year the
maximum period by which the Minister may direct the Victorian
Managed Insurance Authority to provide insurance or an indemnity.
561169 1 BILL LA INTRODUCTION 10/6/2008
Clause Notes
PART 1--PRELIMINARY
Clause 1 states the purpose of the Act is--
· to amend the Emergency Services Superannuation
Act 1986 (the ESSA) to enable greater access to
superannuation products and services;
· to consequentially amend the State Superannuation
Act 1988 and the Transport Superannuation Act
1988;
· to amend section 25A of the Victorian Managed
Authority Act 1986 to extend from 1 year to 5 years
the maximum period that may be specified in relation to
insurance or an indemnity provided by the Victorian
Managed Insurance Authority.
Clause 2 provides that the Act comes into operation on the day after the
day on which it receives Royal Assent.
PART 2--EMERGENCY SERVICES SUPERANNUATION
ACT 1986
Clause 3 inserts two new definitions in section 3(1) of the Emergency
Services Superannuation Act 1986: eligible beneficiary and
returning member.
The eligible beneficiary definition is the mechanism by which
member of the former SSF will be permitted to join ESSPLAN.
The returning member definition is the mechanism through
which persons who return to employment on a fixed term contact
basis, as provided for in the Victoria Police Workplace
Agreement 2007, will be provided with the same death and
disability cover as members of the emergency services defined
benefit scheme.
Clause 4 inserts new sections 4(8) and 4(9) into the Emergency Services
Superannuation Act 1986.
New section 4(8) is to prohibit returning members from joining
the defined benefits scheme under this Act. A returning member
would usually be a police officer who has resigned and at a latter
stage takes a position on a fixed term contract.
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New section 4(9) allows eligible beneficiaries to become
members of ESSPLAN in accordance with section 21B(1)(c)
(a new subsection inserted via clause 11). Therefore, a person
who is classified as an eligible beneficiary may join the Scheme
but is not permitted to be a defined benefit contributor under the
ESSA.
Clause 5 inserts new section 6(2)(fa) into the Emergency Services
Superannuation Act 1986 to require that in administering the
Scheme, the ESSB must consider the interests of contributing
employers. (Existing provisions already require the ESSB to
have regard to the interests of persons who are entitled to
benefits.)
Clause 6 inserts new section 6A(3)(a)(iv) into the Emergency Services
Superannuation Act 1986 to clarify the ESSB's powers to enter
into contractual arrangements with providers of financial
planning services and superannuation advice that is to be
provided to members, contributors and their spouses.
Clause 7 inserts new subsections (3A) and (3B) in section 20A of the
Emergency Services Superannuation Act 1986 to provide the
ESSB with the authority to review part-time contributors'
contributions to take account of circumstances where, due to
irregular hours, the contributions of the member may not
represent an appropriate proportion of full-time contributions.
Clause 8 inserts new section 20PA into the Emergency Services
Superannuation Act 1986 relating to returning members who
are operational staff members.
New section 20PA sets out the entitlements of returning
members, in the event of death or permanent disability.
The benefit for such members is based on length of contract
and accrual rates at section 20C(1)(a).
Clause 9 amends the definition of beneficiary in section 21 of the
Emergency Services Superannuation Act 1986 to include
eligible beneficiaries.
This clause also replaces the existing definition of eligible spouse
with a definition that is linked to the Commonwealth Supervision
Industry (Supervision) Act 1993.
This clause also inserts a new definition of member. The new
definition includes existing members and eligible beneficiaries
who become members (as provided by section 21B(1)(c).
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Clause 10 inserts new sections 21A(2)(ab) and 21A(2)(ac) into the
Emergency Services Superannuation Act 1986. These new
sections provide that, subject to any specified standards,
contributions made by, or in respect of, a member or eligible
spouse together with amounts rolled, transferred or allotted from
elsewhere in the superannuation system, form part of the Scheme.
These provisions ensure that contributions, rollovers and
transfers are made in accordance with legislative requirements
e.g. Commonwealth requirements concerning contributions over
certain ages.
Clause 11 amends section 21B(1)(b) of the Emergency Services
Superannuation Act 1986 and inserts new sections 21B(1)(c)
and 21B(1)(d).
The amendment of section 21B(1)(b) and insertion of new
sections 21B(1)(c) and 21B(1)(d) facilitate the membership of
eligible beneficiaries and returning members via a written
application to the ESSB for an eligible beneficiary, or at the
commencement of a fixed term contract for a returning member.
Subclause (3) repeals provisions that are no longer required.
Clause 12 amends section 21E of the Emergency Services
Superannuation Act 1986 relating to the amount and payment
of benefits under ESSPLAN. The amendments provide that a
benefit is payable in accordance with any specified standards
unless a member applies in writing to have the benefit retained in
an investment fund maintained by the ESSB and that application
is approved.
Clause 13 amends section 21F of the Emergency Services
Superannuation Act 1986 relating to disability and death cover
under ESSPLAN. The amendments provide the circumstances
under which a member ceases to be covered by the relevant
ESSPLAN insurance arrangements. Unless the ESSB determines
otherwise, insurance cover shall cease 30 days after the events
listed in section 21B(10): death, payment or termination of
benefits, or transfer of benefits into another complying scheme.
Cessation of coverage was previously related to employment
status with a participating employer.
Clause 14 inserts new section 21FA into the Emergency Services
Superannuation Act 1986 to enable the Emergency Services
Superannuation Board to offer optional additional disability and
death cover in recognition of new membership arrangements.
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The new section 21FA provides that the ESSB may determine the
extent of any additional cover provided and can seek relevant
information from an applicant including requiring the applicant
to undertake a medical examination.
Clause 15 amends section 21G of the Emergency Services
Superannuation Act 1986 to recognise the new section 21FA
introduced pursuant to clause 14.
Clause 16 amends of section 21H of the Emergency Services
Superannuation Act 1986 to recognises the new section 21FA
introduced pursuant to clause 14.
This amendment provides that the ESSB can choose to offer
binding death nominations in accordance with any relevant
specified standards.
Clause 17 amends section 21I of the Emergency Services Superannuation
Act 1986 to recognises the amounts payable must be in
accordance with any relevant specified standards.
Clause 18 amends section 21J of the Emergency Services Superannuation
Act 1986 and inserts new sections 21J(2B) and 21J(3A) to
provide that--
· any amount permitted to be paid or transferred within
the superannuation system can be paid into a beneficiary
account subject to any relevant specified standards;
· the ESSB can choose to offer binding death nominations
in accordance with any relevant specified standards; and
· that the ESSB may debit any amounts payable from a
beneficiary account.
Clause 19 amends section 21JA of the Emergency Services
Superannuation Act 1986 relating to spouse accounts.
The amendments--
· provide that eligible spouses may apply to open a
spouse account (including up to 3 months following the
death of a member);
· remove a redundant reference to section 159TC of the
Income Tax Assessment Act 1936 of the
Commonwealth;
· expand the type of contribution that may be paid into a
spouse account;
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· effectively allow a spouse to continue as an active
member of ESSPLAN even if the original member
leaves the Scheme;
· allow the ESSB to offer binding death nominations in
accordance with any relevant specified standards;
· provide that a spouse can elect to transfer a benefit
anywhere within the superannuation system or maintain
the account in an investment fund established by the
ESSB.
Clause 20 inserts new section 29A(1)(ba) into the Emergency Services
Superannuation Act 1986. The new section 29A(1)(ba)
provides that the Governor in Council may specify standards
(including conditions) in relation to contributions made to the
schemes by a member, spouse or beneficiary as well as to
amounts rolled over, transferred or allotted from within the
superannuation system.
PART 3--AMENDMENTS TO OTHER ACTS
Clause 21 amends section 4(1) of the State Superannuation Act 1988 to
provide that officers who are members of ESSPLAN are not
considered prescribed scheme members for whom the Act does
not apply.
Clause 22 amends section 4(5) of the Transport Superannuation Act
1988 to provide that employees who are members of ESSPLAN
are not considered prescribed scheme members for whom the Act
does not apply.
Clause 23 amends section 25A(3)(c) of the Victorian Managed Insurance
Authority Act 1996 to increases the length of time that insurance
can be provided, from one year to up to five years, pursuant to a
direction from the Minister.
PART 4--REPEAL OF AMENDING ACT
Clause 24 provides that the amending Act is repealed one year after the date
of its commencement. The repeal of this Act does not affect the
continuing operation of the amendments made by it (see section
15(1) of the Interpretation of Legislation Act 1984).
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