No. 135 of 1991

TABLE OF PROVISIONS

PART 1—PRELIMINARY

TABLE OF PROVISIONS—continued

TABLE OF PROVISIONS—continued

No. 135 of 1991

An Act to make provision for and in relation to an occupational superannuation scheme for, and the payment of other benefits to, members of the Defence Force, and for related purposes

[Assented to 7 September 1991]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title

1. This Act may be cited as the Military Superannuation and Benefits Act 1991.

Commencement

2. (1) Parts 1, 2, 6 and 7, sections 42 and 47, paragraph 49 (1) (a) and sections 50 to 52 commence on the day on which this Act receives the Royal Assent.

(2)    Section 61 commences on 1 September 1991.

(3)    The remaining provisions of this Act commence on 1 October 1991.

Interpretation

3. (1) In this Act, unless the contrary intention appears:

“Board” means the Military Superannuation and Benefits Board of Trustees No. 1 established by section 18;

“Chairperson” means the Chairperson of the Board;

“Commissioner” means the person who for the time being:

(a)     holds the office of; or

(b)     is acting as;

Commissioner for Superannuation under Part II of the Superannuation Act 1976;

“DFRDB Act” means the Defence Force Retirement and Death Benefits Act 1973;

“Fund” means the fund established, and vested in the Board, by the Trust Deed;

“Rules” means the Rules for the administration of the Scheme set out in the Schedule to the Trust Deed;

“Scheme” means the superannuation scheme established by the Trust Deed;

“Trust Deed” means the deed referred to in section 4 and includes that deed as subsequently amended under section 5;

“trustee” means a person who holds office as a trustee of the Board and includes the Chairperson.

(2) Unless the contrary intention appears, a word or expression:

(b) used in a provision of this Act other than the Deed; has in that provision the same meaning as it has in the Rules.

PART 2—THE TRUST DEED

Deed to establish Superannuation Scheme etc.

4. (1) Not later than 30 days after the commencement of this Act, the Minister must, for and on behalf of the Commonwealth, by deed:

(a) establish an occupational superannuation scheme for the benefit

of persons who, on and after the commencement of Part 3, will be, under that Part, members of the scheme; and

(c)     set out the functions and powers of the Board.

(2) The deed must be in the form set out in the Schedule.

Amendment of Trust Deed

5. (1) The Minister may, by signed instrument, amend the Trust Deed.

(2) Where compliance with a provision of the Trust Deed as amended under subsection (1) would have the effect that the Fund would cease:

that provision is invalid.

PART 3—MEMBERS OF SUPERANNUATION SCHEME

Membership of Superannuation Scheme

6. (1) Subject to subsection (2), each of the following persons is, by force of this section, a member of the Scheme:

(a)     a member of the Permanent Forces;

(2) In spite of subsection (1), a person is not a member of the Scheme if the person is an eligible member of the Defence Force for the purposes of the DFRDB Act.

Election by member of the Emergency Forces or Reserve Forces to be a member

7. (1) A person who intends to render continuous full-time service as a member of the Emergency Forces or the Reserve Forces under an undertaking to serve for a period of not less than 3 months but less than 12 months may, before becoming such a member, elect in writing to become a member of the Scheme.

(2) A person who intends to render continuous full-time service as a member of the Emergency Forces or the Reserve Forces under an undertaking to serve for a period of less than 3 months with a unit of the Defence Force that was allotted for duty in an operational area (within the meaning of the Veterans’ Entitlements Act 1986) may, before becoming such a member, elect in writing to become a member of the Scheme.

Cases where person taken not to have ceased to be a member

8. Where a person ceases to be a member and, immediately after so ceasing, again becomes a member, the person is taken, for the purposes of this Act, not to have ceased to be a member.

PART 4—CONTRIBUTIONS

Contributions of members to Superannuation Scheme etc. to be deducted from salary

9. Any contribution payable by a member under the Rules may be deducted from the member’s salary and paid to the Board.

Contributions to Superannuation Scheme etc. by Department

10. (1) The Department must pay to the Board, in accordance with the Rules, all contributions that under the Rules are payable by the Department in respect of a member.

(2) Where any amount payable by the Department under subsection (1) remains unpaid after the day on which payment was due, the Department is liable to pay to the Board interest on that amount at such rate as the Board determines from time to time.

PART 5—PAYMENT OF BENEFITS

Interpretation

11. In this Part, a reference, in relation to a person who has ceased to be a member, to a member benefit, or to the part of a member benefit, that is totally funded is a reference to a member benefit, or to that part of a member benefit that consists only of:

(b)     the interest on those contributions.

Member benefits

12. Where a member benefit becomes payable under the Rules to a person who has ceased to be a member:

(b)     if paragraph (a) does not apply:

Employer benefits

13. Where an employer benefit becomes payable under the Rules to a person who has ceased to be a member:

Preserved benefits

14. (1) Where:

then:

(d)     if paragraph (c) does not apply:

(i) an amount equal to:

(a) if the total amount of preserved benefit is payable—the part of the member benefit that is totally funded; or

(b) if a part of a preserved benefit is payable—a corresponding part of the part of the member benefit that is totally funded;

is payable by the Board to the Commonwealth; and (ii) the preserved benefit, or the part of the preserved benefit, is payable to, or in respect of, the person by the Commonwealth.

(2) Where:

then:

(c) an amount equal to the sum of:

is payable by the Board to the Commonwealth; and

Payment by or to the Commonwealth on reclassification of invalidity pensioner

15. (1) Where a person who is an invalidity pensioner classified as Class A or Class B is reclassified as Class C, the Commonwealth must pay to the Board an amount equal to the amount of the funded employer benefit in relation to the person at the time when the person was retired on the ground of invalidity.

(2) Where:

(b) the person is subsequently reclassified as Class A or Class B; the Board must pay to the Commonwealth an amount equal to the funded employer benefit in relation to the person.

Payment by Commonwealth where an invalidity pensioner again becomes a member

16. Where a person who is an invalidity pensioner again becomes a member, the Commonwealth must pay to the Board an amount equal to the amount of the funded employer benefit in relation to the person at the time when the person was retired on the ground of invalidity.

Appropriation

17. Any payment by the Commonwealth under this Part is to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.

Establishment

18. There is established by this section a board called the Military Superannuation and Benefits Board of Trustees No. 1.

Incorporation etc.

19. (1) The Board:

(a)     is a body corporate with perpetual succession; and

(b)     has a common seal; and

(d)     may sue and be sued in its corporate name.

(2)    The common seal of the Board is to be kept in such custody as the Board directs and is to be used only as authorised by the Board.

(3)    All courts, judges and persons acting judicially must take judicial notice of the common seal of the Board and must presume that it was duly affixed.

Functions etc.

20. (1) The functions and powers of the Board are those set out in the Trust Deed.

(2) The Board is also responsible for the general administration of this Act other than Part 8.

Membership of Board

21. (1) The Board is to consist of:

(a)     a Chairperson; and

(b)     4 other trustees;

appointed on a part-time basis.

(2) The trustees are appointed, and hold office, as provided in the Trust Deed.

Defective appointment not invalid etc.

22. (1) The appointment of a person:

(a)     as Chairperson or trustee; or

(b)     to act as Chairperson or trustee;

is not invalid because of a defect or irregularity in connection with the appointment.

(2) Anything done by or in relation to a person purporting to act as Chairperson or trustee is not invalid on the ground that:

(a)     the occasion for the person’s appointment had not arisen; or

(c)     the person’s appointment had ceased to have effect.

Trustee Act of ACT to apply

23. Except in so far as it is inconsistent with a law of the Commonwealth, the Trustee Act 1957 of the Australian Capital Territory applies to and in relation to the trustees acting in the performance of their functions, or the exercise of their powers, under the Trust Deed.

Exemption from taxation

24. (1) Subject to this section, the Board and the Fund are not liable to taxation under:

(2)     Income derived from the investment of money standing to the credit of the Fund, or otherwise from the management of the Fund by the Board, is not liable to taxation under any law of a State or Territory.

(3)     The regulations may provide that subsection (1) does not apply in relation to taxation under a specified law.

Application of Division 2 of Part XI of Audit Act

25. In its application in relation to the Board by virtue of section 63ca of the Audit Act 1901, Division 2 of Part XI of that Act has effect as if sections 63e and 63h are omitted.

Annual report and financial statements

26. (1) The Board must, as soon as practicable after the end of each financial year commencing after the commencement of this Act, prepare and give to the Minister:

(2) Before giving the financial statements to the Minister, the Board must submit them to the Auditor-General, who must report to the Minister:

(3)     The Minister must cause a copy of the report, and of the financial statements, prepared by the Board, together with a copy of the report of the Auditor-General in respect of those financial statements, to be laid before each House of the Parliament within 15 sitting days of that House after the receipt of whichever of those documents was last received by the Minister.

(4)     Where the Board has not complied with subsection (1) within a period of 6 months after the end of a financial year, the Board must, within 14 days after the end of that period, give to the Minister an interim report on the performance of its functions during that year together with interim financial statements in respect of the management of the Fund during that year.

(5)     The financial statements given to the Minister under subsection (4) must be in the form approved by the Minister for the purposes of subsection (1) but need not be accompanied by a report of the Auditor-General.

(6)     Where the Board gives a report and financial statements to the Minister under subsection (4), the Minister must cause a copy of the report and a copy of the financial statements to be laid before each House of the Parliament within 15 sitting days of that House after their receipt by the Minister.

(7)     A report furnished by the Board under this section in relation to a financial year must include particulars of:

(b)     the consideration given by the Board to that policy; and

PART 7—COMMISSIONER FOR SUPERANNUATION

Functions of Commissioner

27. (1) Subject to this Part, the Commissioner is responsible for the provision of administrative services to the Board in the performance of its functions.

(2)    In the discharge of functions under this Act, the Commissioner must act in accordance with any policies determined, and any directions given, by the Board.

(3)    Anything done by the Commissioner in the name of, or on behalf of, the Board is to be taken to have been done by the Board.

Other functions of Commissioner not to be prejudiced

28. The Commissioner is not required under this Part to do anything that would prejudice the performance of:

PART 8—RETENTION BENEFIT

Object of this Part

29. The object of this Part is to provide for the payment of a benefit (in this Part called “retention benefit”) to certain members of the Scheme who have completed at least 15 years of continuous eligible service as an inducement for them to continue to serve in the Permanent Forces until they complete 20 years of continuous eligible service (or more in certain circumstances) or reach their retiring age (whichever occurs first).

Interpretation

30. (1) In this Part, unless the contrary intention appears:

“airman” means a member of the Air Force other than an officer;

“benefit computation day”, in relation to a member to whom retention benefit is payable or has been paid, means:

“eligible member” means a member who is a member of the Permanent Forces and is:

(a) an officer holding a rank not lower than:

(i) if the officer is in the Navy—Lieutenant Commander; or

(ii) if the officer is in the Army—Major; or

(iii) if the officer is in the Air Force—Squadron Leader; or

(d)     a sailor holding a rank not lower than Petty Officer; or

“officer” has the same meaning as in the Defence Act 1903;

“period of prospective service”, in relation to a member to whom retention benefit is payable or has been paid, means the period:

(a) commencing:

(b) ending at the end of:

(a) complete 20 years of continuous eligible service; or

(b) if, at the time when, or at any time after, the benefit becomes or became payable, the member

is, or was, subject to a return of service obligation—complete a period of continuous eligible service that, excluding the period of service that the member is required to serve because of that obligation, is equal to 20 years; or

whichever occurs first;

“return of service obligation”, in relation to a member, has the meaning given by subsection (3);

“salary”, in relation to a member of the Permanent Forces, includes any service allowance payable to the member but does not include any other allowance payable to the member;

“sailor” means a member of the Navy other than an officer;

“soldier” means a member of the Army other than an officer;

“transferred member” means a person who:

(c)     has continued to be such a member.

(2)     For the purposes of this Part, a person is not taken to be holding a rank in the Permanent Forces if he or she is holding that rank temporarily.

(3)     For the purposes of this Part, a member is subject to a return of service obligation if:

(a) the member:

Continuity of service

31. (1) This section applies where it is necessary to work out, for the purposes of this Part, how long a member of the Permanent Forces has been on continuous service.

(2) A member is taken to have continued to be on service during:

(a)     any period of paid leave; or

(3) Any other period of leave without pay, or of absence without leave, of a member is not taken to be a period of service but, where the special circumstances specified in subsection (4) apply in relation to a period of leave without pay of a member:

are taken to be one continuous period of service.

(4) For the purposes of subsection (3), the special circumstances in relation to a period of leave without pay of a member are:

(a) where:

(b) where:

he or she was an eligible member of the Defence Force for the purposes of the DFRDB Act.

(5) Where a person ceases to be a member of the Permanent Forces and, immediately after so ceasing again becomes a member of the Permanent Forces, the person is taken, for the purposes of this Part, not to have ceased, at that time, to be a member of the Permanent Forces.

Eligibility for retention benefit

32. (1) An eligible member (other than a transferred member to whom subsection (3) applies) is eligible to receive retention benefit on the member’s completing 15 years of continuous eligible service.

(2) A member (other than an eligible member or a transferred member to whom subsection (3) applies) is eligible to receive retention benefit if:

(3) Where a transferred member has, at the time when he or she becomes a member, completed a period of continuous eligible service that is not less than 15 years but is less than 20 years, then:

Election to receive retention benefit

33. (1) An eligible member to whom subsection 32 (1) applies may, within 90 days before becoming eligible to receive retention benefit under that subsection, elect to receive the benefit.

(2)    A person (other than an eligible member to whom subsection 32 (1) applies) who is eligible to receive retention benefit may, within 90 days after becoming eligible to receive the benefit, elect to receive the benefit.

(3)    A person making an election must, at the same time, give an undertaking that the person will serve in the Permanent Forces as an eligible member until the day specified in the undertaking, being the day on which the period of prospective service of the member will end.

(4)    The election and undertaking must be in writing in a form approved by the Minister.

Revocation of election

34. (1) A person who has made an election under subsection 33 (1) may, at any time before the end of a period during which the election may be made, in writing, revoke the election.

(2) An election made under subsection 33 (2) may not be revoked.

Payment of retention benefit

35. (1) Retention benefit is payable to a member who is eligible to receive it if:

(a)     the member has made an election under section 33; and

(2) To remove any doubt, it is stated that, if:

retention benefit is payable to the member.

(3) In subsection (1):

“recognised medical practitioner” means a medical practitioner who:

(a)     is a member of the Defence Force; or

Suspension of payment of retention benefit

36. (1) Where:

the Chief of Staff or authorised officer may, by notice in writing, order that payment of the benefit should not be made to the member.

(2) If:

(a)     a decision is made not to proceed with the charge; or

(b)    the charge is dismissed; or

the order is revoked by force of this subsection.

(3) Where:

the Chief of Staff or an officer (not below the rank of Captain, Colonel or Group Captain) authorised by the Chief of Staff may, by notice in writing, order that payment of the benefit should not be made to the member.

(4) If the service of the member is not terminated, the order is revoked by force of this subsection.

Amount of benefit

37. (1) Subject to subsection (2), the amount of retention benefit payable to a member is equal to the amount per annum of the salary payable to the member on benefit computation day in relation to the member.

(2) Where the period of prospective service of a member to whom retention benefit is payable is less than 5 years, the amount of benefit payable to the member is the amount worked out by using the formula:

where:

B is the amount of benefit that, apart from this subsection, would be payable to the member under subsection (1); and

PPS is the number of days in the period of prospective service of the member.

Payment of interest

38. (1) Where, because of the revocation of a retention order under subsection 36 (2) or (4), retention benefit becomes payable to a member on a later date than it would have been if the order had not been made, there is payable to the member an amount, calculated in the

manner determined by the Minister, representing interest accrued on the amount of the benefit in respect of the period:

(2) Where:

there is payable to the member an amount, calculated in the manner determined by the Minister, representing interest accrued on the amount of the benefit in respect of the period:

Appropriation

39. Any payment of retention benefit is to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.

Partial repayment of retention benefit

40. (1) If, before the end of the period of prospective service of a member to whom retention benefit has been paid:

(b)     the member:

(i) being an officer, resigns from office; or

(c) the service of the member is terminated for a prescribed reason; the member is liable to pay to the Commonwealth an amount worked out by using the formula:

where:

B is the amount of retention benefit paid to the member; and

PPS is the number of days in the period of prospective service of the member; and

QPS (qualifying period of service) is the number of days in the period:

(2) An amount for which the member is liable under subsection (1) may be deducted from any money payable to the member under a determination made under Part IIIa of the Defence Act 1903.

PART 9—MISCELLANEOUS

Commonwealth Funds Management Limited as investment manager of Fund

41. (1) Commonwealth Funds Management Limited is, by this section, appointed as the investment manager of any money standing from time to time to the credit of the Fund that is, under the Trust Deed, available for investment.

(2)    The appointment may be terminated at any time by the Board.

(3)    Nothing in subsection (1) prevents the Board from engaging any other investment manager while the appointment subsists.

Cost of administration of Act etc.

42. The costs of the administration of this Act and of the Trust Deed, excluding the costs of and incidental to the management of the Fund by the Board and the investment of its money, are to be paid out of money appropriated from time to time by Parliament for the purpose.

Recovery of unpaid contributions etc.

43. (1) Any amount (including an amount of contributions) that is payable to the Board under this Act or the Rules may be recovered by the Board in a court of competent jurisdiction as a debt.

(2)    Any contribution payable by a person to the Board under the Rules that remains unpaid when the person ceases to be a member may be deducted from any payment or payments of benefit payable under the Rules to, or in respect of, the person.

(3)    Where for any reason (including the making of, or cancellation of, an election under the Rules), the Board had paid an amount of benefit that is, or has become, not payable:

Payment of fees

44. (1) Such fees as are prescribed are payable to the Commonwealth by a person who, under the Rules, requests the Board to reconsider one of its decisions.

(2) The regulations may make provision for and in relation to the refund of any fees paid under subsection (1).

Assignment of  benefits

45. No pension or other benefit payable under the Rules is capable of being assigned.

Member etc. bound by Rules

46. (1) A person who is, or has ceased to be, a member is subject to the Rules to the extent that they are applicable in relation to the person.

(2) The Commonwealth is subject to the Rules to the extent that they are applicable in relation to the Commonwealth.

Indemnification of trustees etc.

47. (1) Any matter or thing done, or omitted to be done, in good faith by:

does not subject him or her personally to any action, liability, claim or demand.

(2) Subsection (1) does not preclude the Board from being subject to any action, liability, claim or demand.

Financial institution not liable in respect of certain payments out of account of deceased pensioner

48. (1) In this section:

“primary pension” means a pension payable to a pensioner.

(2) Where:

then, in spite of any other law, the financial institution is not liable to the Commonwealth, the personal representative of the deceased pensioner or anyone else for any loss incurred because of the payment of that amount to the spouse of the pensioner.

Disallowable instrument

49. (1) Subject to subsection (2), each of the following instruments is a disallowable instrument for the purposes of section 46a of the Acts Interpretation Act 1901:

(a)     an instrument under subsection 5 (1);

(2) A declaration referred to in paragraph (1) (b) is a Statutory Rule for the purposes of the Statutory Rules Publication Act 1903.

Tabling of statement of Government policy

50. Where, in accordance with the Trust Deed, the Minister gives to the Chairperson a statement of the policy of the Commonwealth government on any matter that is relevant to the performance of the functions of the Board, together with a request that the Board consider that policy in the performance of its functions, the Minister must cause a copy of the statement to be laid before each House of the Parliament within 15 sitting days of that House after the Minister has given the statement to the Chairperson.

Delegation by Minister

51. The Minister may, by signed instrument, delegate all or any of his or her powers under this Act or the regulations to:

(a)     the Board; or

(b)     an officer of the Department; or

(d)     an officer of the Defence Force.

Regulations

52. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters that:

(a)     are required or permitted to be prescribed by this Act; or

Principal Act

53. In this Part, “Principal Act” means the Defence Force Retirement and Death Benefits Act 19731.

Interpretation

54. Section 3 of the Principal Act is amended:

“include:

“includes:

(c) by inserting in subsection (1) the following definition:

“ ‘MSB scheme’ means the superannuation scheme established under the Military Superannuation and Benefits Act 1991”.

55. After section 5 of the Principal Act the following section is inserted:

Persons excluded from definition of “eligible member of the Defence Force”

“5a. (1) Subject to subsection (2), a person who:

is excluded from the definition of ‘eligible member of the Defence Force’ in subsection 3 (1).

“(2) Subsection (1) does not apply to:

(a) a person who:

(c)     a person to whom section 63 applies.”.

Commutation of retirement pay

56. Section 24 of the Principal Act is amended:

(b)    by inserting after subsection (1a) the following subsection:

“(1b) A person who, after the commencement of this subsection, becomes, or is about to become, entitled to retirement pay is excluded from the operation of subsection (1a) if:

Classification in respect of incapacity

57. Section 30 of the Principal Act is amended by adding at the end the following subsection:

“(3) Where the invalidity pay of a person is cancelled under subsection 62 (1), any classification of the person under subsection (1) ceases to have effect.”.

58. After section 61a of the Principal Act the following sections are inserted:

Election by recipient member intending to resume full-time service

“61b. (1) Where a person:

(a)     who is a recipient member; or

intends to resume full-time service:

(c)     as a member of the Permanent Forces; or

the person must, before resuming service, in writing addressed to the Authority, elect:

(e)     to become a contributing member; or

(f)      to become a member of the MSB scheme.

“(2) Subsection (1) does not apply if the person has previously:

(a)     made an election under that subsection; or

“(3) A recipient member who:

(a) intends:

must, before resuming service, in writing addressed to the Authority, elect whether or not to become a member of that scheme.

Recipient member in receipt of retirement pay who becomes member of MSB scheme

“61c. (1) Where a recipient member in receipt of retirement pay becomes a member of the MSB scheme, payment of the member’s retirement pay is, subject to subsection (2), suspended.

“(2) A suspension under subsection (1) ceases to have effect when the recipient member whose retirement pay has been suspended ceases to be a member of the MSB scheme.

“(3) Where a recipient member whose retirement pay is suspended under subsection (1) dies, then, for the purposes of section 39 and subsections 42 (3) and 43 (3):

Recipient member on invalidity pay who becomes member of MSB scheme

“61d. (1) Subject to subsection (2), where:

(a)     a person becomes a member of the MSB scheme; and

the person’s invalidity pay is cancelled.

“(2) Where:

(a)     a person becomes a member of the MSB scheme; and

the person’s invalidity pay is not cancelled but is, subject to subsection (3), suspended.

“(3) A suspension under subsection (2) ceases to have effect when the recipient member whose invalidity pay has been suspended ceases to be a member of the MSB scheme.

“(4) Where a recipient member whose invalidity pay is suspended under subsection (2) dies:

(b)     for the purposes of sections 39, 42 and 43, the invalidity pay is

taken to have been then payable to the member at the rate at which it would have been payable to him or her if it had not been suspended.”.

Person entitled to deferred benefits again becoming a member etc. before benefits payable

59. Section 83 of the Principal Act is amended by inserting “, or becomes a member of the MSB scheme,” after “Force”.

Application of increase to suspended pension benefits

60.     Section 98c of the Principal Act is amended by omitting “section 35” and substituting “subsection 35 (3), 61c (1), 61d (2) or 135 (2)”.

61.     After Part XII of the Principal Act the following Part is inserted:

“PART XIII—TRANSFER TO MSB SCHEME

Election to remain member of scheme or to join MSB scheme

“132. (1) Subject to this section, an eligible member of the Defence Force must, on or before election day in relation to the member, in writing addressed to the Authority, elect:

(a)     to continue to be a contributing member; or

(b)     to become a member of the MSB scheme.

“(2) Election day in relation to an eligible member of the Defence Force is:

(b)     if paragraph (a) does not apply—30 September 1992.

“(3) An eligible member of the Defence Force, being a person:

may not make an election under subsection (1).

“(4) Subsection (1) does not apply to a member whose service terminates, or is due to terminate, before 1 October 1991.

Election where member dies

“133. (1) This section applies if an eligible member of the Defence Force:

(b) dies before making such an election.

“(2) If the member is unable to make the election, the election may be made by a person acting on behalf of the member.

“(3) If the member dies and is survived by a widow or widower, the widow or widower may, subject to subsection (6), elect that this Act apply in relation to the member as if the member had, on the day immediately preceding his or her death, elected to become a member of the MSB scheme.

“(4) If the member dies and is not survived by a widow or widower but is survived by an eligible child or eligible children, a person acting on behalf of the child or children may, subject to subsection (6), elect that this Act apply in relation to the member as if the member had, on the day immediately preceding his or her death, elected to become a member of the MSB scheme.

“(5) An election under subsection (3) or (4) must be made on or before the day that would have been election day in relation to the member if he or she had not died.

“(6) If:

(a) a member who has died:

(b) at the time of his or her death, the member had not repaid:

64 (2) or 89 (4) (as the case may be); or

an election may not be made:

unless the balance of the amount referred to in subparagraph (b) (i) or (ii) (as the case may be) that remains unpaid is paid to the Commonwealth.

“(7) If:

the member is taken to have, on the day immediately preceding his or her death, elected under section 132 to become a member of the MSB scheme.

Effect of election

“134. Subject to section 138, a person who elects, or is taken to have elected, under section 132 to become a member of the MSB scheme ceases, or is taken to have ceased, to be an eligible member of the Defence Force:

Loss of entitlement to benefits etc.

“135. (1) Subject to this section, a person who ceases, or is taken to have ceased, to be an eligible member of the Defence Force under section 134 or 138 is not entitled to be paid any benefits, or to receive any refund of contributions, under this Act.

“(2) Where:

the following provisions have effect:

Failure to make election

“136. (1) If an election is not made by, or on behalf of, an eligible member of the Defence Force who is required to make an election under subsection 132(1), the member is taken to have elected, on election day in relation to him or her, to continue to be a contributing member.

“(2) If:

this Act has effect as if the member had elected, on the day immediately preceding his or her death, to continue to be a contributing member.

Certain persons liable to make repayments to Commonwealth on making of election

“137. (1) In this section:

‘enactment’ means:

(a)     an Act; or

(b)     an instrument made under an Act;

‘prescribed provision’ means:

(a)     subsection 42a (1) or (2) of the previous Act; or

“(2) Where an eligible member of the Defence Force who has received payment of an amount under a prescribed provision elects under section 132 to become a member of the MSB scheme, then, in spite of any provision of an enactment regarding the repayment of that amount, that amount, or any part of that amount that remains unpaid at the time of the election, becomes payable to the Commonwealth and may be recovered as a debt.

Persons precluded from transferring to MSB scheme

“138. (1) This section applies to:

(a) an eligible member of the Defence Force who:

“(2) Subject to subsections (3) and (4), a person to whom this section applies ceases to be an eligible member of the Defence Force:

(a) in the case of a person referred to in paragraph (1) (a)—at the

end of the day on which the total amount that the person is required to pay to the Commonwealth under subsection 21 (3), 63 (2), 64 (2) or 89 (4) (as the case may be) is fully paid; or

“(3) Where, apart from this subsection, a person would cease under subsection (2) to be an eligible member of the Defence Force before 30 September 1991, the person ceases to be an eligible member of the Defence Force at the end of 30 September 1991.

“(4) If a person to whom this section applies has not, on or before 30 September 1992, paid to the Commonwealth:

the person is taken:

SCHEDULE Section 4

FORM OF TRUST DEED

THIS DEED is made on 1991

BY THE COMMONWEALTH OF AUSTRALIA (in this Deed called “the Commonwealth”)

WHEREAS section 4 of the Military Superannuation and Benefits Act 1991 (in this Deed called “the Act”) provides that the Minister, for and on behalf of the Commonwealth, must, within 30 days after the commencement of the Act, by Deed establish an occupational superannuation scheme in order to provide benefits for members of the Defence Force.

NOW THIS DEED WITNESSES as follows:

SCHEDULE—continued

Interpretation

1. (1) In this Deed, where the context requires or admits, a reference to the Deed shall include a reference to the Rules, as set out in the Schedule (in this Deed called “the Rules”), and the Rules shall form part of the Deed. In the case of an inconsistency between the provisions of the Deed and the Rules, the provisions of the Deed shall prevail.

(2)     In this Deed, where the context requires or admits, words and expressions defined in the Act or the Rules have the same meanings when used in the Deed. The headings in this Deed and in the Rules are for the convenience of reference only and shall not affect their interpretation.

(3)     In this Deed “Minister” means:

(a)     the Commonwealth Minister of State for Defence;

Establishment of the Superannuation Scheme and the Fund

2. (1) There is hereby established an occupational superannuation scheme to be known as the Military Superannuation and Benefits Scheme (in this Deed called “the Superannuation Scheme”) to come into force on 1 October 1991 for the benefit of:

(i) members of the Permanent Forces; and

(ii) members of the Emergency Forces and the Reserve Forces,

to be administered in accordance with the Deed by the Military Superannuation and Benefits Board of Trustees No. 1 established by the Act (in this Deed called “the Board”).

(2) For the purposes of the Superannuation Scheme there is hereby established and vested in the Board a fund to be known as the Military Superannuation and Benefits Fund No. 1 (in this Deed called “the Fund”).

Functions and powers of the Board

3. (1) The functions of the Board are to administer the Superannuation Scheme and to manage and invest the Fund in accordance with the provisions of the Act and this Deed including, without limiting the generality of the foregoing, the following functions:

SCHEDULE—continued

(2) The Board has power in Australia and elsewhere to do all things necessary or convenient to be done for, or in connection with, the performance of its functions and, in particular, may:

(a)     give guarantees;

(d)     appoint agents and attorneys;

(e)     act as agent for other persons;

(f)      engage consultants and investment managers;

(3) In exercising its functions and powers the Board shall have regard to:

(a)    the interests of members and the Commonwealth;

but notwithstanding anything contained in any statement of Commonwealth Government policy or the Deed, the Board shall, in exercising its functions and powers, comply with the requirements of the Occupational Superannuation Standards Act 1987 and Regulations applicable to the Fund and the Superannuation Scheme.

Appointment of Trustees

4. (1) Four of the 5 Trustees constituting the Board shall be appointed by the Minister having regard to the following:

SCHEDULE—continued

(2)    The 5th Trustee, who will also be the Chairperson of the Board, shall be appointed by the Minister after consultation with the Minister for Finance in relation to the appointment.

(3)    The Chairperson and the Trustees nominated by the Chief of the Defence Force shall be appointed for such period, not exceeding 3 years, as the Minister specifies in the instrument of appointment. The Trustees referred to in subclause 4 (1) (a) shall hold office at the Minister’s pleasure.

(4)    A Trustee shall be eligible for re-appointment.

(5)    A Trustee shall hold office on such terms and conditions as are determined by the Minister.

(6)    The performance of the functions, or the exercise of the powers, of the Board shall not be affected by reason of there being a vacancy in the membership of the Board.

(7)    The Trustees shall be paid such remuneration and allowances as are determined by the Remuneration Tribunal but, if no determination of that remuneration or allowances by the Tribunal is in operation, they shall be paid such remuneration and allowances as are determined by the Minister.

(8)    The Minister may grant leave of absence to a Trustee on such terms and conditions as to remuneration or otherwise as the Minister determines.

(9)    A Trustee may resign office by writing signed by the Trustee and delivered to the Minister.

Termination of Appointment

5. (1) The Minister may terminate the appointment of a Trustee for:

(a)     misbehaviour or physical or mental incapacity; or

(b)     inefficiency or incompetence.

(2) If a Trustee:

(c)     is absent, except on leave granted by the Minister, from 3

SCHEDULE—continued

consecutive meetings of the Board of which the Trustee has had notice;

the Minister may terminate the appointment of the Trustee.

Acting Appointments

6. (1) The Minister may appoint a person to act as Chairperson after consultation with the Minister for Finance in relation to the appointment:

(a)     during a vacancy in the office of Chairperson; or

(2) The Minister may appoint a person to act as a Trustee:

(a)     during a vacancy in the office of a Trustee; or

(3)     The Minister shall only appoint a person to act as a Trustee who meets the same criteria, as set out in subclauses 4 (1) (a) or (b), as the Trustee in whose place the Trustee is to act.

(4)     An appointment under subclause (1) or (2) may be expressed to have effect only in such circumstances as are specified in the instrument of appointment.

(5)     While a person is acting as Chairperson or as a Trustee, the person has and may exercise all the powers, and shall perform all the duties, of the Chairperson or the Trustee as the case may be.

(6)     The Minister may:

(b)     terminate such an appointment at any time.

(7) A person appointed to act in an office under subclause (1) or (2) may resign the appointment by writing signed by the person and delivered to the Minister.

Disclosure of Interests

7. (1) Each Trustee shall:

SCHEDULE—continued

present to a meeting of the Board a statement in writing setting out particulars of those interests, whether pecuniary or otherwise and whether direct or indirect, of the Trustee as at the day of appointment or as at that anniversary, as the case requires, that could reasonably be expected to conflict with the proper performance by the Trustee of the Trustee’s duties as a Trustee.

(2)    A statement presented by a Trustee to a meeting of the Board in pursuance of subclause (1) shall be incorporated into the minutes of the meeting.

(3)    Where a Trustee acquires an interest, whether pecuniary or otherwise and whether direct or indirect, that could reasonably be expected to conflict with the proper performance by the Trustee of the Trustee’s duties as a Trustee and a statement containing particulars of the interest has not been given to a meeting of the Board in accordance with subclause (1), the Trustee shall, as soon as possible after acquiring that interest, present to a meeting of the Board a statement in writing setting out particulars of the interest and the statement shall be incorporated in the minutes of the meeting.

(4)    A Trustee who has a direct or indirect pecuniary interest in a matter being considered by the Board shall, as soon as possible after the relevant facts have come to the Trustee’s knowledge, disclose the nature of the Trustee’s interest at a meeting of the Board.

(5)    A disclosure under subclause (4) shall be recorded in the minutes of the meeting of the Board and the Trustee shall not, unless the Board or the Minister otherwise determines:

(6) For the purpose of the making of a determination by the Board under subclause (5) in relation to a Trustee who has made a disclosure under subclause (4), a Trustee who has a direct or indirect pecuniary interest in the matter to which the disclosure relates shall not:

(b)     take part in the making by the Board of the determination.

(7) Where a Trustee is obliged by subclause (4) to disclose the nature of an interest at a meeting of the Board, the fact that the Trustee has presented to a meeting of the Board a statement under subclause (1) or (3) that includes particulars of that interest does not relieve the Trustee of the Trustee’s obligation under subclause (4).

SCHEDULE—continued

Meetings of the Board of Trustees

8. (1) The Board shall hold such meetings as are necessary for the conduct of its affairs.

(2)     The Chairperson may at any time convene a meeting of the Board and shall, when so requested in writing by another Trustee, convene a meeting of the Board within 30 days of receiving such notice.

(3)     The Chairperson shall preside at all meetings of the Board at which the Chairperson is present. If the Chairperson is not present at a meeting of the Board, the Chairperson may nominate one of the Trustees to be Chairperson for the meeting. In the absence of such nomination, the Trustees shall elect one of the Trustees present at the meeting as a Chairperson for the meeting.

(4)     At a meeting of the Board 4 Trustees, or acting Trustees, shall constitute a quorum and all decisions of the Board shall require a majority of 4 votes of the Trustees, or acting Trustees, present in person and voting.

(5)     The Board shall keep accurate records of all meetings held by the Board.

Operation of the Fund

9. (1) All contributions and other moneys paid to the Board, or as directed by the Board, shall be held in trust by the Board in the Fund. The Fund shall be managed and invested by the Board in accordance with the Act and the Deed.

(2) The Fund shall comprise:

(a)     contributions made by members;

(d)     the income arising from investments; and

(e)     any accretions to or profits on realisation of investments.

(3) The Fund shall be used by the Board to pay benefits to or in respect of members, to make payments to the Commonwealth in respect of members’ benefits as provided for in the Act and to pay the costs and expenses of the management and investment of the Fund.

Investment of the Fund

10. (1) For the purposes of this clause:

SCHEDULE—continued

(b) “profit” includes capital profit.

(2)     Moneys standing to the credit of the Fund which the Board, after consultation with its investment manager, is of the opinion are moneys that are not for the time being required for the purpose of making payments out of the Fund under the Act and the Deed shall, so far as is practicable, be invested by the Board in accordance with the Act and the Deed, but the Board shall so manage the Fund that moneys that are from time to time required to pay benefits that are payable out of the Fund are available for that purpose.

(3)     Moneys that, by virtue of subclause (2), are required to be invested by the Board may be invested in any manner and, without limiting the generality of the foregoing, may be invested by the Board jointly with another person or other persons.

(4)     The Board must determine an investment strategy and policy as soon as possible after 1 October 1991 and thereafter regularly review such a strategy and policy, and, where it considers necessary or desirable, change its existing investment strategy or policy. In determining and reviewing its investment strategy and policy, the Board shall consult with such persons or bodies as it thinks fit.

(5)     The Board shall invest moneys standing to the credit of the Fund that are available for investment only through an investment manager or managers who undertake to invest, and manage the investment of, those funds on behalf of the Board.

(6)     The Board shall ensure that any investment manager:

Requests by Minister for Information

11. The Board shall furnish to the Minister such information relating to the general administration and operation of the Superannuation Scheme and the Fund as the Minister may from time to time require.

Delegation by the Board

12. The Board may by an instrument under its seal delegate all or any of its powers under the Deed to any person, including the Commissioner for Superannuation or a Trustee, other than its powers under Part 9 of the Rules and this power of delegation.

SCHEDULE—continued

MILITARY SUPERANNUATION AND BENEFITS RULES

TABLE OF PROVISIONS

PART 1—PRELIMINARY

SCHEDULE—continued

TABLE OF PROVISIONS—continued

SCHEDULE—continued

TABLE OF PROVISIONS—continued

SCHEDULE—continued

TABLE OF PROVISIONS—continued

SCHEDULE—continued

MILITARY SUPERANNUATION AND BENEFITS RULES

PART 1—PRELIMINARY

Citation

1. These Rules may be cited as the Military Superannuation and Benefits Rules.

Definitions and interpretation

2. (1) The following expressions are defined or interpreted, for the purposes of these Rules, in the Glossary in Schedule 1. Unless otherwise stated, the expressions are in Part 1 of the Schedule.

Actuary

Board

calendar month

child

classification

Committee

contribution

Department

eligible child

eligible service

Emergency Forces

employer benefit

final average salary

financial year

foreign service member

Fund

funded employer benefit

higher duties allowance

invalidity

invalidity pension

invalidity pensioner

invalidity retiree

MBL member

member

member benefit

membership

month

Parliamentary Candidates Act

pension

Permanent Forces

prescribed fee

prescribed year

previous contributions

previous legislation

relevant percentage

relevant period

relevant provision

Reserve Forces

retirement (see Part 3)

retirement pensioner

retiring age (see Part 4)

salary

Scheme

service

service allowance

service offence

spouse (see Part 5)

spouse’s pension

Statistician

total benefit

transferred person

transfer value

unfunded preserved benefit

1948 Act

1973 Act

1973 Scheme

1973 Scheme recipient member

1973 Scheme re-entrant

1973 Scheme retirement pensioner

1991 Scheme

1991 Scheme re-entrant

SCHEDULE—continued

(2) Interpretations of the following matters, for the purposes of these Rules, are provided in Parts 6 to 9 of Schedule 1:

Part 6 Parts of speech and grammatical forms

Part 7 Number

Part 8 Reckoning of time

Part 9 Attainment of particular age.

PART 2—CONTRIBUTIONS

Contributions by members

3. (1) A member is required to pay a contribution each fortnight in accordance with this Division.

(2) Where contributions by a member fall due during a period when he or she is on leave without pay, the member, or a person acting on his or her behalf, is to pay those contributions:

(a)     each fortnight; or

(c)     with the approval of the Board, in a lump sum.

Amount of contributions

4. (1) Subject to subrule (2), the amount of the contribution payable by a member in a fortnight is an amount equal to the relevant percentage of the amount of the salary paid to the member in that fortnight.

(2)     Where a member elects under subrule (10) to vary the amount of the contribution payable by him or her, that election has effect in relation to the first salary fortnight in relation to which it can be applied in the ordinary course of business.

(3)     Where a member makes an election under subrule (10), the member is not entitled to make a further election until the expiration of a period of three months after the day on which the earlier election was made.

(4)     For the purposes of subrule (1), salary is taken not to be paid to a member in respect of a day included in a period that, in accordance with Schedule 2, is a prescribed period.

(5)     Where:

(b)     the period does not exceed 21 consecutive days;

SCHEDULE—continued

the amounts of the contributions payable by the member in respect of that period are to be calculated as if the member were on full pay.

(6) Subject to subrule (7), where a member who is granted:

(a)     long service leave on half pay; or

(b)     leave without pay for a period not exceeding 21 days;

the amounts of the contributions payable by the member in respect of that period are to be calculated as if the member were on full pay.

(7) In a case to which paragraph (6) (b) applies, the member’s salary for the purpose of calculating the contribution payable by the member is taken not to include higher duties allowance unless:

(8)     In calculating the amount of a contribution payable by a member, the calculation is to be made as if no deductions were made from the member’s salary.

(9)     Where the amount of a contribution payable by a member includes a fraction of a cent:

(10) In this rule:

“relevant percentage”, in relation to a member, means:

(b)     if the member has not made an election—5 per centum.

Cessation of contributions on reaching maximum benefit limit

5. (1) A member is not entitled to pay contributions after he or she has been notified that his or her total benefit equals or exceeds his or her pension maximum benefit limit.

(2)     At any time after a member is notified that his or her total benefit equals or exceeds his or her lump sum maximum benefit limit, he or she may elect to cease paying contributions.

(3)     This rule applies in spite of anything in this Part.

SCHEDULE—continued

Contributions while on leave without pay in connection with birth of child etc.

6. A member who is on leave without pay for a period exceeding 21 days which was granted to him or her in connection with:

(a)     the birth of a child of the member; or

(b)     other termination of the pregnancy of the member; or

(c)     the adoption of a child by the member;

may elect to pay contributions, calculated as if the member were on full pay, in respect of so much of that period, not exceeding 9 months, as is specified in the election.

Contributions while on other leave without pay

7. (1) This rule does not apply to a period of leave without pay to which rule 6 applies.

(2) Where a member who is on leave without pay for a period exceeding 21 days which was granted to him or her:

(a) for the purpose of the member:

(ii) undertaking further education; or

(iii) undergoing training; or

(iv) engaging in some other activity;

and, in the case of subparagraph (ii), (iii) or (iv), an appropriate authority of the Defence Force has notified the Board that the education, training or other activity is relevant to the requirements of the Defence Force; or

the member may, with the approval of the Board, elect to pay contributions, calculated as if the member were on full pay, in respect of so much of the period as is specified in the election.

(3) Where:

(i) is also a member; or

SCHEDULE—continued

the inactive member may elect to pay contributions, calculated as if the member were on full pay, in respect of so much of that period, not exceeding 2 years, as is specified in the election.

(4) In this rule:

“spouse”, in relation to a member, means a person who is legally married to the member and includes a person who, although not legally married to the member, ordinarily lives with the member as his or her husband or wife, as the case may be, on a permanent and bona fide domestic basis and is not of the same sex as the member.

General conditions applicable to contributions under rules 6 and 7

8. (1) The provisions of rule 4 apply to an election made under rule 6 or 7 as if:

(2) A member who has made an election under rule 6 or 7 may revoke the election at any time after the expiration of a period of 3 months after the election was made.

Member contributions to be paid to Board

9. Contributions payable by a member are to be paid to the Board by or on behalf of the member.

Liability of Department to pay employer contributions

10. (1) The Department must, on each salary pay-day on which a member pays contributions, pay to the Board an employer contribution in relation to the member.

(2) In spite of a member paying contributions during a period of leave without pay to which rule 7 applies, subrule (1) does not apply:

SCHEDULE—continued

excess period in respect of which no amount is paid under a prescribed arrangement; or

(3)     The amount of an employer contribution payable by the Department in relation to a member is an amount that is 3 per centum of the amount of the salary payable to the member in respect of the relevant fortnight.

(4)     In this rule:

“member’s employer”, in relation to a member who is engaged in employment referred to in subparagraph 7 (2) (a) (i), means the person who is the employer of the member in respect of that employment; “prescribed arrangement”, in relation to a member who is engaged in employment referred to in subparagraph 7 (2) (a) (i), means an arrangement between the Commonwealth and the member’s employer under which the employer agrees to pay to the Commonwealth an employer contribution, in relation to the member:

as the case may be, in respect of which the member pays a contribution under this Part.

Payment of contributions into Fund

11. The Board must pay all member and employer contributions received by it into the Fund.

PART 3—MEMBERS’ BENEFITS

Division 1—Benefits other than Invalidity Benefits

Benefits on retirement before reaching 55 years of age or earlier retiring age, otherwise than for redundancy or retrenchment etc.

12. (1) This rule applies to a member who retires:

(b)     in any other case—before reaching the age of 55 years; not being a member who is:

(c)     retired on the ground of redundancy or retrenchment; or

(d)     entitled to an invalidity pension.

(2) Subject to rule 15, in the case of a person to whom this rule applies:

SCHEDULE—continued

(3) Subject to rule 15, a person who is entitled to be paid a member benefit under paragraph (2) (a) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the member benefit and if he or she so elects:

Benefits on retirement for redundancy or retrenchment or on attaining retiring age of less than 55 years

13. (1) Where a member is retired on the ground of redundancy or retrenchment and he or she is not entitled to an invalidity pension:

(2) Where a member retires and, on that retirement:

(a)     he or she has reached his or her retiring age;

(b)     that retiring age is less than 55 years; and

(c)     he or she is not entitled to an invalidity pension; then:

(3) A person who is entitled to be paid a member benefit under paragraph (1) (a) or (2) (d) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the member benefit and if he or she so elects:

(4) A person to whom a preserved benefit is applicable under paragraph (1) (b) or (2) (e) may elect that, instead of that benefit being so preserved, it be converted into a pension payable to him or her and if he or she so elects:

SCHEDULE—continued

(b)     the benefit is converted into a pension payable to him or her.

(5) Where:

(b)    he or she again became a member and again retires; and

then, for the purposes of these Rules, the person is taken to be a person to whom subrule (2) applies.

Benefits on retirement on or after attaining age of 55 years

14. Where a member retires:

(a)     on or after attaining the age of 55 years; and

(b)    he or she is not entitled to an invalidity pension;

there is applicable to him or her a preserved benefit of the amount of his or her member benefit and employer benefit.

Payment of benefits where rule 12 applies and person has less than 12 months’ eligible service

15. (1) This rule applies to a person to whom rule 12 applies who has less than 12 months’ eligible service and whose employer benefit consists wholly of funded employer benefit.

(2) Where the person’s employer benefit is an amount to which the preservation standards set out in the Occupational Superannuation Standards Regulations apply, he or she may elect that, instead of his or her employer benefit being preserved in the Fund, it is paid to a preservation fund, or used to purchase a deferred annuity, of his or her choice, and if he or she does so:

(3) Where the person’s employer benefit is an amount to which the preservation standards set out in the Occupational Superannuation Standards Regulations do not apply, he or she may elect that his or her employer benefit is paid to him or her as a lump sum, and if he or she so elects:

(b)     he or she is not entitled to elect under subrule 12 (3) to have

SCHEDULE—continued

applicable to him or her a preserved benefit of his or her member benefit.

(4) In spite of anything in this rule or in rule 12, where a person to whom this rule applies does not elect that there be applicable to him or her a preserved benefit of the amount of his or her member benefit, there is not applicable to him or her a preserved benefit of his or her employer benefit, but instead:

(b)    in any other case, it is payable to him or her as a lump sum.

(5) In this rule:

“preservation fund” means a fund that is required, in accordance with the standards set out in the Occupational Superannuation Standards Regulations, to preserve benefits transferred to the fund from a superannuation fund in accordance with those regulations.

Limitation on certain benefits in case of certain transferees who retire before completing 731 days’ service after 30 September 1991

16. (1) Where a person who transferred from the 1973 Scheme before 1 October 1992 retires before completing 731 days of contributory service after 30 September 1991 otherwise than:

(a)    on reaching his or her retiring age; or

(b)    on the ground of invalidity, redundancy or retrenchment;

the amount of member benefit which he or she would, but for this rule, be entitled to be paid is reduced by substituting for the amount of interest applicable in relation to him or her under the relevant provisions an amount calculated in accordance with the formula:

where:

“Notional interest” means the amount of interest applicable in relation to the person under the relevant provisions; and

“Number of days of contributory service” means the number of days of contributory service by the person after 30 September 1991.

(2)     A reference in this rule to a person who retires on the ground of invalidity is taken not to include a reference to a person who, by reason of rule 31, 32 or 33, is not entitled to invalidity benefits.

(3)     In this rule:

“contributory service”, in relation to a person, means service by the person in respect of which the person paid contributions under part 2 or contributions under section 17 of the 1973 Act.

SCHEDULE—continued

“relevant provisions” means subparagraph (e) (ii) of Schedule 9 and paragraph 1 (b) of Schedule 10.

Division 2—Invalidity Benefits

Subdivision A—Incapacity Classification

Establishment of Incapacity Classification Committee

17. The Board must establish an Incapacity Classification Committee.

Membership of Committee

18. (1) The Committee comprises such number of persons as the Board determines.

(2) The qualifications of each member of the Committee are such as the Board determines.

Functions of Committee

19. (1) The functions of the Committee are to exercise, at the request of the Board and subject to any directions given by the Board, the powers and functions under rules 22 and 23.

(2) When determining the classification of, or reclassifying, an invalidity retiree, the Committee:

(3) The Board must make available to the Committee any medical or other evidence that it has concerning the invalidity retiree whose classification or reclassification is being considered and that is relevant to his or her classification.

Proceedings of Committee

20. Subject to any directions given by the Board, the Committee may regulate its proceedings as the Committee thinks fit.

Decisions by Committee

21. The Committee must notify the Board of its decision as to the classification or reclassification of an invalidity retiree, giving reasons for its decision.

Classification in respect of incapacity

22. (1) Where a member is retired on the ground of invalidity, the Board or the Committee must determine the percentage of incapacity in relation to civil employment of the invalidity retiree and must classify the retiree according to the percentage of incapacity as follows:

SCHEDULE—continued

(2) In determining, for the purposes of subrule (1), the percentage of incapacity in relation to civil employment of an invalidity retiree, the Board or the Committee must have regard to the following matters only:

(3)     The death of a person after he or she has been retired on the ground of invalidity does not prevent the classifying of the person under subrule (1).

(4)     This rule does not apply to a person who, by reason of rule 31, 32 or 33, is not entitled to invalidity benefits.

Reclassification in respect of incapacity

23. (1) Where the Board or the Committee, at any time, is satisfied that there has been such a change in the percentage of incapacity in relation to civil employment of an invalidity pensioner that his or her classification should be altered, the Board or the Committee may reclassify him or her in the appropriate classification set out in rule 22 according to the percentage of his or her incapacity in relation to civil employment.

(2) Where an invalidity pensioner has attained the age of 55 years and the invalidity pensioner is classified:

(a)     as Class A—subrule (1) does not apply to him or her; or

(3) In determining, for the purposes of subrule (1), the percentage of incapacity in relation to civil employment of an invalidity pensioner, the Board or the Committee must have regard to the following matters only:

SCHEDULE—continued

(4)     Where the Board or the Committee reclassifies a person under this rule, the Board or the Committee must specify the date from which the reclassification has effect and, on and after that date, the person is, for the purposes of these Rules, taken to be classified under rule 22 accordingly.

(5)     Where the Board or the Committee reclassifies a person under this rule, the date specified by the Board or the Committee as the date from which the reclassification has effect is not to be a date earlier than the date on which the Board or the Committee reclassifies the member unless:

(6)     Where a person who was retired otherwise than on the ground of invalidity is, by virtue of rule 30, treated as if he or she had been retired on the ground of invalidity, the Board or the Committee may, despite subrule (5), on the same day on which it classifies him or her under rule 22, reclassify him or her under this rule with effect from a date after the date of his or her retirement but before the date on which the Board or the Committee makes the reclassification.

(7)     The death of a person after he or she has been classified under rule 22 or reclassified under this rule does not prevent the reclassifying of the person under subrule (1).

(8)     For the purposes of this rule, a person who:

(a)     is classified as Class C; and

is taken to be an invalidity pensioner.

(9) This rule does not apply to a person who has attained the age of 65 years.

(10) In this rule:

SCHEDULE—continued

“prescribed physical or mental impairment”, in relation to an invalidity pensioner, means:

Decision as to classification or reclassification to be notified to invalidity retiree

24. The Board must notify an invalidity retiree in writing of any decision under rule 22 or 23 as to the classification or reclassification of the retiree and the reasons for that decision.

Power of Board to require persons to be medically examined etc.

25. (1) The Board may, by notice in writing given to a person in receipt of an invalidity pension, require him or her:

(2)     A notice under subrule (1) must set out the effect of subrule (3).

(3)     Where a person fails to comply with a notice given under subrule (1) and the Board is not satisfied that there was a reasonable excuse for the failure, the Board may, by notice in writing given to the person, suspend the person’s invalidity pension with effect from a day determined by the Board, being a day not earlier than:

(4) A notice to a person under subrule (3) must set out the effect of subrules (7), (9) and (10).

(5) An invalidity pension is not payable in respect of a period during which a suspension under subrule (3) is in force.

SCHEDULE—continued

(6) Where:

the Board may, by notice in writing given to the person, revoke the suspension with effect from a day determined by the Board, being a day not later than the day on which the notice is given.

(7) Without limiting subrule (6), where the invalidity pension of a person is suspended under subrule (3), the person may, by notice in writing given to the Board, request the Board to revoke the suspension and, where such a request is made, the Board must, by notice in writing given to the person:

(8)     A notice given by the Board under subrule (7) must set out the effect of subrules (9) and (10).

(9)     Where:

(b)     either:

(i) the person complies with the notice; or

the Board must, by notice in writing given to the person, revoke the suspension with effect from a day determined by the Board, being a day not later than:

(d)     in a case to which subparagraph (b) (ii) applies:

SCHEDULE—continued

(i) the day on which the Board became so satisfied; or

(10) Where:

the Board must, by notice in writing given to the person, refuse to revoke the suspension.

(11) A notice required or permitted to be given:

(12) Where the Board is required by this rule to give a person a notice, the notice is taken to have been given to the person if:

(a)     the notice is served on the person personally; or

(13) A reference in subrule (12) to a reliable address of a person is a reference to an address where, if a letter were sent to the person by pre-paid post to the address, the person would probably receive the letter.

Subdivision B—Invalidity Benefits

Entitlement to invalidity benefits

26. A person who is classified as Class A or Class B under rule 22 (whether on his or her retirement or by reason of his or her having been reclassified under rule 23) is entitled to invalidity benefits in accordance with this Division.

SCHEDULE—continued

Invalidity benefits for person classified as Class A

27. (1) Where a person who is entitled to invalidity benefits is classified as Class A:

(2) A person who is entitled to be paid a member benefit under subrule (1) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the benefit and if he or she so elects:

Invalidity benefits for person classified as Class B

28. (1) Where a person who is entitled to invalidity benefits is classified as Class B:

(b)    a pension is payable to him or her at an annual rate equal to:

(a) had been retired otherwise than on the ground of invalidity; and

(b) were entitled to elect to convert his or her employer benefit into a pension and had elected to do so;

whichever is the greater.

(2) A person who is entitled to be paid a member benefit under subrule (1) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the benefit and if he or she so elects:

SCHEDULE—continued

Effect of change of invalidity classification on pension and preserved benefit

29. (1) Where a person who is classified as Class A or Class B is reclassified as Class C:

(2) If a person referred to in subrule (1) is subsequently reclassified as Class A or Class B:

Person may be treated as having been retired on ground of invalidity

30. (1) Where a person has been retired otherwise than on the ground of invalidity but, after his or her retirement, the Board is satisfied that, at the time the person was retired, grounds existed on which he or she could have been retired on the ground of invalidity, the Board may, for the purposes of these Rules, treat the person as if he or she had been retired on the last-mentioned ground.

(2) Where, because of action taken under subrule (1), a person is classified as Class A or Class B under rule 22:

Subdivision C—Invalidity Benefits Not Payable

Person classified as Class C

31. A person who is classified as Class C is not entitled to invalidity benefits under this Division.

Pre-existing condition

32. (1) Where:

(b)     the Board is satisfied that:

SCHEDULE—continued

the person is not entitled to invalidity benefits under this Division.

(2) Where:

(c) he or she is subsequently retired on the ground of invalidity; the person is, for the purposes of subrule (1), treated as if he or she had first become a member at the time when he or she again became a member.

Invalidity due to intentional act

33. (1) Where:

(a)     a member is retired on the ground of invalidity; and

he or she is not entitled to invalidity benefits under this Division.

(2) Subrule (1) does not apply in a case where the Board is of the opinion:

Invalidity arising during absence without leave exceeding 21 days

34. (1) Where:

(a)     a member is retired on the ground of invalidity; and

SCHEDULE—continued

he or she is not entitled to invalidity benefits under this Division.

(2) This rule does not apply in a case where the Board is satisfied that the absence of the member was due to sufficiently mitigating circumstances.

Division 3—Person Rejoining the Scheme

Suspension of pension of retirement pensioner other than invalidity retiree

35. Where a person who is in receipt of a pension under Division 1 again becomes a member, the pension is suspended for the duration of his or her membership and is not payable while it is suspended.

Cancellation of pension etc. of invalidity retiree

36. Where a person, who was a member and was retired on the ground of invalidity, again becomes a member:

Continuation of previous election to cease paying contributions

37. Where:

(b)     the person again becomes a member;

that election is taken to be again in force in relation to the member as if it had been made after the member again became a member.

PART 5—SPOUSES’ AND CHILDREN’S BENEFITS

Division 1—Death of a Member

Applicability of benefits

38. Where a member dies and is survived by a spouse or spouses or an eligible child or children, benefits are payable in accordance with this Division.

SCHEDULE—continued

Payment of deceased member’s member benefit

39. A deceased member’s member benefit is payable as a lump sum as follows:

the benefit is payable to, or for the benefit of, the person or persons;

Payment of deceased member’s employer benefit

40. (1) A deceased member’s employer benefit or a pension is payable as follows:

the employer benefit is payable to, or for the benefit of, the person or persons as a lump sum;

SCHEDULE—continued

(2) A spouse who is entitled to be paid an employer benefit under paragraph (1) (a) may elect that:

(i) that part of the benefit is so converted; and

(ii) the balance of the benefit is payable to him or her as a lump sum.

(3)     An employer benefit payable under subrule (1) is calculated as if, on the date of the death of the deceased member, he or she had become entitled to invalidity benefits under Division 2 of Part 3 and had been classified as Class A under rule 22.

(4)     Subrules (2) and (3) do not apply where:

unless the Board is satisfied that the absence of the member was due to sufficiently mitigating circumstances.

(5) In this rule:

“notional invalidity pension”, in relation to a deceased member, means the invalidity pension that would have been payable to the deceased member if, on the date of his or her death, he or she had become entitled to invalidity benefits under Division 2 of Part 3 and had been classified as Class A under rule 22;

“reduced notional invalidity pension”, in relation to a deceased member, means the invalidity pension that would have been payable to the deceased member if, on the date of his or her death:

SCHEDULE—continued

(b)     he or she had been classified as Class A under rule 22; and

Division 2—Death of Retirement Pensioner

Applicability of benefits

41. Where a retirement pensioner dies and is survived by a spouse or spouses or an eligible child or children, benefits are payable in accordance with this Division.

Pensions payable

42. (1) Where a deceased retirement pensioner is survived by a spouse with or without eligible children, a pension is payable to the spouse at an annual rate equal to the relevant percentage in Table 1 in Schedule 4 of the deceased retirement pensioner’s pension.

(2)     In spite of subrule (1), on each of the 7 pension paydays immediately following the death of a retirement pensioner referred to in that subrule, the rate at which pension is payable to the spouse of the deceased retirement pensioner is the rate at which pension would have been payable to the deceased retirement pensioner on that day if he or she had not died.

(3)     Where a deceased retirement pensioner is not survived by a spouse but is survived by an eligible child or children, a pension is payable to, or for the benefit of, the child or children at an annual rate equal to the relevant percentage in Table 2 in Schedule 4 of the deceased retirement pensioner’s pension.

(4)     In this rule:

“deceased retirement pensioner’s pension”, in relation to a deceased retirement pensioner, means the pension that was payable to the deceased retirement pensioner immediately before his or her death.

Final benefit payable in relation to deceased retirement pensioner

43. (1) Where a retirement pensioner dies not later than 10 years after his or her pension became payable to him or her and he or she is not survived by a spouse or eligible child to whom, or for the benefit of whom, benefits are payable under this Division, there is payable to the deceased retirement pensioner’s personal representative as a lump sum an amount equal to:

SCHEDULE—continued

pension paid to the deceased invalidity pensioner since he or she last ceased to be a member; or

whichever is the less; or

(2) Where a retirement pensioner dies, and:

there is payable to the deceased spouse’s or eligible child’s personal representative as a lump sum an amount equal to:

Death in certain cases due to retirement disabilities

44. Where a person who:

(a)     is classified as Class B; or

dies, and the Board is satisfied that his or her death was due to:

SCHEDULE—continued

he or she is taken, for the purposes of this Division, to have been, immediately before his or her death, an invalidity pensioner classified as Class A and in receipt of pension at a rate calculated accordingly.

Effect of death of invalidity pensioner while pension suspended

45. Where a person whose invalidity pension has been suspended under rule 25 dies before the invalidity pension again becomes payable, he or she is taken, for the purposes of this Division, to have been an invalidity pensioner in receipt of pension immediately before his or her death.

Division 3—Death of Spouse

Child’s benefit upon death of spouse

46. (1) Where a spouse of a deceased member, being a spouse who:

(a)     is in receipt of a spouse’s pension; and

(b)     has an eligible child or children;

dies, a pension is payable to, or for the benefit of, the child or children at an annual rate equal to the relevant percentage in Table 2 of Schedule 4 of the deceased person’s notional pension.

(2) In this rule:

“deceased person” has the same meaning as in paragraph 8 of Schedule 1 ;

“deceased person’s notional pension” means:

as if the rate of that pension had been increased from time to time in accordance with Division 2 of Part 6;

“notional invalidity pension” and “reduced notional invalidity pension” have the same respective meanings as in rule 40.

Division 4—Miscellaneous

Entitlements where two spouses

47. (1) In spite of anything in this Part, where a deceased member or retirement pensioner is survived by 2 spouses, the amount of member benefit (if any) and the amount of employer benefit payable to each spouse is to be determined by the Board but so that not less than 37.5 per centum of the member benefit (if any) and 37.5 per centum of the employer benefit is payable to each spouse.

SCHEDULE—continued

(2)     The total amount of member benefit (if any) and the total amount of employer benefit determined under subrule (1) is not to exceed the amount of the deceased person’s member benefit (if any) or employer benefit, respectively.

(3)     Where, under a provision of this Part, a spouse is entitled to make an election in relation to a benefit, then, in a case where a deceased person is survived by 2 spouses, each of those spouses is entitled to make such an election in relation to so much of the benefit as is applicable to him or her.

Payment of balance of benefit where pension becomes payable to child in certain cases

48. (1) Where a pension becomes payable to, or for the benefit of, an eligible child or children of a deceased member under paragraph 40 (1) (b), an amount equal to the amount (if any) by which the employer benefit of the deceased member exceeds the amount that the Board determines to be the capital value of the pension payable to, or for the benefit of, the child or children is payable in accordance with subrule (4).

(2) Where a pension becomes payable to, or for the benefit of, an eligible child or children of a deceased retirement pensioner (other than an invalidity pensioner) under subrule 42 (3), an amount equal to the amount (if any) by which the funded employer benefit of the deceased retirement pensioner exceeds an amount equal to the sum of:

is payable in accordance with subrule (4).

(3) Where a pension becomes payable to, or for the benefit of, an eligible child or children of a deceased invalidity pensioner under subrule 42 (3), an amount equal to the amount (if any) by which the employer benefit of the deceased pensioner exceeds an amount equal to the sum of:

SCHEDULE—continued

is payable in accordance with subrule (4).

(4) Where an amount is payable under subrule (1), (2) or (3):

(a) if the deceased person had notified the Board in writing that:

the amount is payable to, or for the benefit of the person or persons as a lump sum; or

(5) In determining the capital value of a pension under this rule, the Board must obtain, and have regard to, the advice of an actuary.

PART 5—PAYMENT OF PRESERVED BENEFITS

Drawing on member benefit included in preserved benefit

49. (1) Subject to subrule (2), where a preserved benefit is applicable to a person and the preserved benefit includes an amount of member benefit, he or she may, at any time, elect to have the whole or a part of that member benefit paid to him or her as a lump sum and:

and the amount of the preserved benefit applicable to the person is reduced by a corresponding amount.

(2) Where a person elects under this rule to have part of the member benefit paid: