THIS DEED is made on 20 August 2001 by THE COMMONWEALTH OF AUSTRALIA (in this Deed called “the Commonwealth”).
WHEREAS the Commonwealth Minister of State for Finance, for and on behalf of the Commonwealth, pursuant to section 4 of the Superannuation Act 1990, established by Deed dated 21 June 1990 (which Deed, as previously amended, is in this Deed called “the Trust Deed”) an occupational superannuation scheme (in the Trust Deed called the “Public Sector Superannuation Scheme”) in order to provide benefits for certain of its employees and for certain other persons;
AND WHEREAS section 5 of the Superannuation Act 1990 provides that the Minister for Finance and Administration may, by signed instrument, amend the Trust Deed but that the Minister may not amend the Trust Deed unless the Board has consented to the amendment or the amendment falls within any of sub-paragraphs (b)(i), (ii) or (iii) of sub-section 5(1A);
AND WHEREAS by Deeds dated 21 June 1990, 1 July 1991, 30 June 1992, 21 December 1992, 16 June 1993, 24 January 1994, 7 March 1994, 28 June 1994, 22 June 1995, 29 January 1996, 10 December 1996, 25 March 1998 and 5 December 1999 (the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth and Thirteenth Amending Deeds, respectively) the Minister amended the Trust Deed and the Rules for the administration of the Public Sector Superannuation Scheme set out in the Schedule to the Trust Deed;
NOW THIS DEED WITNESSES that the Rules for the administration of the Public Sector Superannuation Scheme set out in the Schedule to the Trust Deed are amended as follows and that the amendments do not require the consent of the Board:
(a) the date of gazettal [see the Acts Interpretation Act 1901, sections 46A and 48]; and
(b) the time when the Superannuation Legislation Amendment (Post-retirement Commutations) Act 2001 commences.
2. The Rules are amended as follows:
2.1 Rule 1.2.1 is amended by inserting the following definition after the definition of APS employee:
“assessment has the same meaning as in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.”
2.2 Rule 1.2.1 is amended by inserting the following definition after the definition of statutory office:
“surcharge has the same meaning as in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.
surchargeable means surchargeable contributions (within the meaning of
contributions the Superannuation Contributions Tax (Assessment and Collection) Act 1997) that are attributable to the operation of these Rules.”
2.3 The following Rule is inserted after Rule 9.4.2:
“9.4.3 When apportioning a reversionary pension under Rule 9.4.1, or re-apportioning a reversionary pension under Rule 9.4.2, the Board must:
(a) disregard any reduction in pension that results from an election under Rules 15.2.1 or 15.3.1; and
(b) not apportion, or re-apportion, among other beneficiaries so much of any pension that is commuted under Part 15 of the Rules.”
2.4 The following Rule is inserted after Rule 12.1.5:
“
Cancelling a commutation election
12.1.6 If:
(a) a person makes an election under Rules 15.1.1, 15.2.1 or 15.3.1; and
(b) no payment has been made in accordance with the election; and
(c) the Board is satisfied that the election should be cancelled;
the Board may direct that the election is to be cancelled and, if it so directs, these Rules have effect as if the election had not been made.”
2.5 The following Part is inserted after Part 14:
“
PART 15 – commutation of pension:
payment of surcharge liability
Division 1
Election
15.1.1 If:
(a) a person is a pensioner; and:
(b) an assessment is made of the surcharge on the person’s surchargeable contributions for a financial year; and
(c) the person becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(c) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;
the person may, within:
(d) three months after the assessment was made; or
(e) such longer period as the Board allows;
give the Board a written notice electing to commute the whole or a part of the person’s pension to a lump sum benefit equal to the amount specified in the election.
15.1.2 An election must be accompanied by:
(a) a written notice requesting that the amount of the lump sum benefit be:
(i) paid to the Commissioner of Taxation; and
(ii) wholly applied in payment of surcharge under the assessment; and
(b) a copy of the notice of assessment.
Surcharge Commutation Amount
15.1.3 The amount specified in the election:
(a) must be equal to or less than the amount of the surcharge under the assessment; and
(b) must not have the effect of reducing the pension below zero; and
(c) is to be known as the Surcharge Commutation Amount for the purposes of this Division.
Entitlement to lump sum benefit
15.1.4 If a person makes an election under Rule 15.1.1 in relation to a pension, the person is entitled to a lump sum benefit equal to the Surcharge Commutation Amount.
15.1.5 If a person is entitled to a lump sum benefit under Rule 15.1.4, the liability to pay that benefit must be discharged by:
(a) paying the amount of that benefit to the Commissioner of Taxation in accordance with the person’s request; and
(b) informing the Commissioner of Taxation of the person’s request that the amount be wholly applied in payment of surcharge under the assessment concerned.
Reduction of pension
15.1.6 If a person makes an election under Rule 15.1.1 in relation to a pension, the annual rate of the pension is to be reduced, with effect from the beginning of the day of the election, so that it equals the amount worked out using the following formula:
Pre – commutation Surcharge Commutation Amount
Election Pension Rate Conversion Factor
where:
Conversion Factor means the factor that is applicable to the person under the determination made by the Board under Rule 15.1.9.
Pre-commutation means the annual rate at which the pension was payable to
Election Pension Rate the person immediately before the election was made.
One election per assessment
15.1.7 A person is not entitled to make more than one election under Rule 15.1.1 in relation to a particular assessment.
Elections made before the first pension payday in a financial year
15.1.8 If an election under Rule 15.1.1 is made during the period:
(a) beginning at the start of a financial year; and
(b) ending at the end of the first pension payday in that year;
this Division has effect as if the election had been made on the first day after that pension payday.
Conversion factor in relation to Surcharge Commutation Amount
15.1.9 The Board must, in accordance with advice received from an actuary, determine in writing, in relation to persons who are pensioners, the conversion factor that, having regard to:
(a) a person’s age when he or she makes an election under Rule 15.1.1; and
(b) other relevant factors (if any);
is applicable for the purpose of working out, in relation to the person, the yearly amount that would have to be paid to discharge a liability equal to the person’s Surcharge Commutation Amount.
Division 2
Election
15.2.1 If:
(a) a person (the Deceased Person) dies and:
(i) the Deceased Person was a member; or
(ii) the Deceased Person was a pensioner; and
(b) the Deceased Person is survived by a spouse; and
(c) the spouse is entitled to a pension; and
(d) an assessment is made of the surcharge on the Deceased Person’s surchargeable contributions for a financial year; and
(e) the spouse becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(ca) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;
the spouse may, within:
(f) three months after the assessment was made; or
(g) such longer period as the Board allows;
give the Board a written notice electing to commute the whole or a part of that pension to a lump sum benefit equal to the amount specified in the election.
15.2.2 An election must be accompanied by:
(a) a written notice requesting that the amount of the lump sum benefit be:
(i) paid to the Commissioner of Taxation; and
(ii) wholly applied in payment of surcharge under the assessment; and
(b) a copy of the notice of assessment.
Surcharge Commutation Amount
15.2.3 The amount specified in an election in relation to a particular pension:
(a) must be equal to or less than the amount of the surcharge under the assessment; and
(b) must not have the effect of reducing the pension below zero; and
(c) is to be known as the Surcharge Commutation Amount for the purposes of this Division.
Entitlement to lump sum benefit
15.2.4 If a spouse makes an election under Rule 15.2.1 in relation to a pension, the spouse is entitled to a lump sum benefit equal to the Surcharge Commutation Amount.
15.2.5 If a spouse is entitled to a lump sum benefit under Rule 15.2.4, the liability to pay that benefit must be discharged by:
(a) paying the amount of that benefit to the Commissioner of Taxation in accordance with the spouse’s request; and
(b) informing the Commissioner of Taxation of the spouse’s request that the amount be wholly applied in payment of surcharge under the assessment concerned.
Reduction of pension
15.2.6 If a spouse makes an election under Rule 15.2.1 in relation to a pension, the annual rate of the pension is to be reduced in accordance with the method determined by the Board under Rule 15.2.10. The reduction takes effect from the beginning of the day of the election.
One election per assessment
15.2.7 A spouse is not entitled to make more than one election under Rule 15.2.1 in relation to a particular assessment.
Elections made before the first pension payday in a financial year
15.2.8 If an election under Rule 15.2.1 is made during the period:
(a) beginning at the start of a financial year; and
(b) ending at the end of the first pension payday in that year;
this Division has effect as if the election had been made on the first day after that pension payday.
Part of pension
15.2.9 To avoid doubt, if a pension is apportioned under Division 4 of Part 9, this Division has effect, in relation to the portion applicable to a particular spouse, as if a reference to the pension were a reference to that portion.
Method for reduction of spouse’s pension in relation to Surcharge Commutation Amount
15.2.10 The Board must, following consultation with an actuary, determine in writing, in relation to persons who are receiving a spouse’s pension, the method that, having regard to:
(a) a person’s age when he or she makes an election under Rule 15.2.1; and
(b) other relevant factors (if any);
is applicable for the purpose of working out, in relation to the person, the yearly amount that would have to be paid to discharge a liability equal to the person’s Surcharge Commutation Amount.
Division 3
Election
15.3.1 If:
(a) a person (the Deceased Person) dies; and
(b) either:
(i) the Deceased Person is not survived by a spouse but is survived by a child or children of the Deceased Person; or
(ii) the Deceased Person is survived by a spouse, the spouse dies, and the spouse is survived by a child or children of the deceased person; and
(c) a pension is payable in respect of the child or children; and
(d) an assessment is made of the surcharge on the Deceased Person’s surchargeable contributions for a financial year; and
(e) the person to whom the pension is payable (the Eligible Person) (who may be the child or one of the children) becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(ca) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;
the Eligible Person may, within:
(f) three months after the assessment was made; or
(g) such longer period as the Board allows;
give the Board a written notice electing to commute the whole or a part of that pension to a lump sum benefit equal to the amount specified in the election.
15.3.2 The election must be accompanied by:
(a) a written notice requesting that the amount of the lump sum benefit be:
(i) paid to the Commissioner of Taxation; and
(ii) wholly applied in payment of surcharge under the assessment; and
(b) a copy of the notice of assessment.
Surcharge Commutation Amount
15.3.3 The amount specified in the election:
(a) must be equal to or less than the amount of the surcharge under the assessment; and
(b) must not have the effect of reducing the pension below zero; and
(c) is to be known as the Surcharge Commutation Amount for the purposes of this Division.
Entitlement to lump sum benefit
15.3.4 If an Eligible Person makes an election under Rule 15.3.1 in relation to a pension, the Eligible Person is entitled to a lump sum benefit equal to the Surcharge Commutation Amount.
15.3.5 If an Eligible Person is entitled to a lump sum benefit under Rule 15.3.4, the liability to pay that benefit must be discharged by:
(a) paying the amount of that benefit to the Commissioner of Taxation in accordance with the Eligible Person’s request; and
(b) informing the Commissioner of Taxation of the Eligible Person’s request that the amount be wholly applied in payment of surcharge under the assessment concerned.
Reduction of pension
15.3.6 If an Eligible Person makes an election under Rule 15.3.1 in relation to a pension, the annual rate of the pension is to be reduced in accordance with the method determined by the Board under Rule 15.3.10. The reduction takes effect from the beginning of the day of the election.
One election per assessment
15.3.7 An Eligible Person is not entitled to make more than one election under Rule 15.3.1 in relation to a particular assessment.
Elections made before the first pension payday in a financial year
15.3.8 If an election under Rule 15.3.1 is made during the period:
(a) beginning at the start of a financial year; and
(b) ending at the end of the first pension payday in that year;
this Division has effect as if the election had been made on the first day after that pension payday.
Part of pension
15.3.9 To avoid doubt, if a pension is apportioned under Division 4 of Part 9, this Division has effect, in relation to the portion applicable to a particular child or to particular children, as if a reference to the pension were a reference to that portion.
Method for reducing pension in relation to Surcharge Commutation Amount
15.3.10 The Board must, following consultation with an actuary, determine in writing, in relation to persons to whom a pension is payable in respect of a child or children, the method that, having regard to:
(a) the age of the child, or the ages of the children, when the person makes an election under Rule 15.3.1; and
(b) other relevant factors (if any);
is applicable for the purpose of working out, in relation to the person, the yearly amount that would have to be paid to discharge a liability equal to the person’s Surcharge Commutation Amount.”
3. Rules 15.1.1 to 15.1.8, Rules 15.2.1 to 15.2.9 and Rules 15.3.1 to 15.3.9 of the Rules as amended by this Deed apply in relation to an assessment, whether made before, at or after the commencement of this clause.
4. Rules 15.2.1 and 15.3.1 of the Rules as amended by this Deed apply to a death, whether the death occurred before, at or after the commencement of this clause.
5. The first set of determinations made under Rule 15.1.9, 15.2.10 or 15.3.10 of the Rules as amended by this Deed may be expressed to have taken effect at the commencement of the Rule concerned.
IN WITNESS WHEREOF this Deed has been executed the day and year first hereinbefore written.
SIGNED, SEALED AND DELIVERED )
)
by the Honourable JOHN JOSEPH FAHEY ) SIGNED
)
Minister for Finance and Administration )
)
for and on behalf of )
)
THE COMMONWEALTH OF )
)
AUSTRALIA, in the presence of: )
)
)
(name) ) Matthew Brine
)
)
(address) ) 6 Bilby Place, Nicholls
) ACT 2913
)
(description) ) Public Servant
)