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SUPERANNUATION ADMINISTRATION BILL 1991 *
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
The objects of this Bill are:
(a) to continue the State Authorities Superannuation Board and confer on it
responsibility for the administration of superannuation schemes established
under:
· the Police Regulation (Superannuation) Act 1906;
· the Superannuation Act 1916;
· the Local Government and Other Authorities (Superannuation) Act
1927;
· the Transport Employees Retirement Benefits Act 1967;
· the New South Wales Retirement Benefits Act 1972;
· the Public Authorities Superannuation Act 1985;
· the State Public Service Superannuation Act 1985;
· the State Authorities Superannuation Act 1987;
· the State Authorities Non-contributory Superannuation Act 1987; and
· any other Act declared by order of the Governor to be an associated Act
for the purposes of the proposed legislation; and
(b) to constitute the State Superannuation Investment and Management
Corporation for the purpose of enabling it to undertake, on behalf of the Board,
the day-to-day responsibility for the administration of those superannuation
schemes and to invest the various funds established under those schemes and to
enable it to undertake, with the concurrence of the Minister and the Treasurer
the administration or management of certain other business undertakings.
The main purpose of the Bill is to ensure that the arrangements for the administration of
those superannuation schemes comply with the requirements prescribed by the
Occupational Superannuation Standards Act 1987 of the Commonwealth and the
regulations under that Act.
* Amended in committee--see table at end of volume.
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides for the proposed Act to commence on a day or days to be
appointed by proclamation.
Clause 3 defines certain expressions for the purposes of the proposed Act. Among
the expressions defined arc "associated Acts", "associated superannuation fund",
"associated superannuation scheme", "benefit", "director", "superannuation scheme"
and "trustee". (An associated Act is one of the Acts specified in the preamble to this
Note.)
PART 2--THE STATE AUTHORITIES SUPERANNUATION BOARD
Division 1--Constitution and functions of the Board
Clause 4 continues the existence of the State Authorities Superannuation Board as a
statutory body.
Clause 5 provides that the Board is to consist of 9 trustees appointed by the
Governor-in-council, including 4 to represent the interests of employers and 4 to
represent the interests of employees. The other trustee, who is to be the chairperson of
the Board, is to be a person who has significant knowledge of, and experience in, the
conduct of superannuation schemes, financial management or some other field of
commerce. The clause also lays down a procedure for nominating the trustees who are
to represent the interests of employees and will give effect to Schedule 1 (provisions
relating to trustees of the Board) and Schedule 2 (Provisions relating to the calling and
holding of meetings of the Board). Provision is made so as to allow one of the trustees
appointed to represent the interests of employees to be engaged on a full-time basis. The
clause enables the trustee who is chairperson of the Board to be the chairperson of the
directors of the corporation. Two other trustees may also be directors, but only during
the first year of operation of the proposed An
Clause 6 specifies the general functions of the Board. The Board is to be
responsible for administering the various superannuation schemes established under the
associated Acts ("associated superannuation schemes") and for generally supervising
the investment and management of the funds established under those schemes
("associated superannuation funds"). The Board is to be a trustee for the purposes of the
Trustee Act 1925 and is to hold the assets of those schemes in trust for the persons
entitled to receive superannuation or retirement benefits under the associated Acts. The
clause will require the Board to have regard to the interests of those persons when
exercising its functions. The Board will also be required to comply with the
requirements of the Occupational Superannuation Standards Act 1987 of the
Commonwealth.
Clause 7 provides that, when the Board is exercising its functions, it is to have
regard to any statement setting out the Government's policy goals or objectives with
respect to the superannuation arrangements under the proposed Act and the associated
Acts.
Clause 8 will empower the Governor-in-Council, by regulation, to vest in the Board
the administration of any superannuation scheme established otherwise than under an
associated Act.
Superannuation Administration 1991
Clause 9 will enable the Board to appoint an investment manager or some other
competent person to carry out on behalf of the Board any one or more of the Board's
functions with respect to a superannuation scheme established under an associated Act.
However, the Board will only be able to exercise this power if it is satisfied that to Q so
would be in the interests of persons entitled to benefits under the scheme and then only
with the consent of the Minister.
Clause 10 will allow the Board to enter into a contract or arrangement with any
person to provide for the insurance of members of associated superannuation schemes
for the purpose of paying additional death or disability benefits to or in respect of them,
or for the management of a scheme providing for the payment of such additional
benefits.
Clause 11 will enable the Board to appoint staff.
Clause 12 will enable the Board to appoint agents to act for it.
Clause 13 will enable the Board to engage consultants (such as investment advisers)
to assist it.
Clause 14 will enable the Board to establish committees to assist it.
Clause 15 will empower the Board to delegate its functions (other than the power of
delegation) to
a
trustee, to a committee that comprises or includes trustees or to the
Corporation.
Clause 16 will allow the Board to compromise and settle claims made against it.
Division 2--Financial provisions relating to the Board
Clause 17 states that "contributor", "employee" and "employer" have in Division
2 of Part 2 of the proposed Act the same meanings as they have for the purposes of the
superannuation schemes administered by the Board.
Clause 18 provides for the financial year of the Board
Clause 19 makes provision for the financial accommodation of the Board and for
investment of funds administered by it.
Clause 20 will allow the Board to pool for investment purposes any of the funds
administered by it.
Clause 21 will require the Board to continue to maintain the State Authorities
Superannuation Administration Account (currently known as the State Authorities
Superannuation Management Account).
Clause 22 will require the Board to charge its administration costs in relation to the
various superannuation schemes that it administers against the Administration Account.
The clause also specifies how those costs are to be funded.
Clause 23 makes special provision for the recovery of administration costs in
respect of benefits that have been preserved under various superannuation schemes by
persons who ceased to be contributors to those schemes before reaching the early
retirement age.
Clause 25 provides for the maintenance of accounts and records of the Board.
PART 3--STATE SUPERANNUATION INVESTMENT AND MANAGEMENT
CORPORATION
Division 1--Constitution and functions of the Corporation
Clause 26 constitutes the State Superannuation Investment and Management
Corporation as a body corporate. The affairs of the corporation are to be administered
by a board of directors as provided by proposed section 27. The Corporation is to be
subject to the control and direction of the Minister. However, a direction of the Minister
is to be void to the extent that it is inconsistent with a direction of the Board, a contract
entered into by the Corporation or a duty, responsibility or obligation imposed by or
under the proposed Act or any of the associated Acts.
Clause 27 provides that the board of directors of the Corporation is to consist of 7
directors, including a full-time managing director, a full-time or part-time director (as
determined by the Minister) and 5 part-time directors. The directors are to be persons
who have experience in, and knowledge of, financial management or some other
relevant commercial activity. One of the part-time directors is to be the chairperson of
the Corporation.
Clause 28 sets out the functions of the Corporation's managing director.
Clause 29 specifies the functions of the Corporation with respect to the associated
superannuation schemes. Subject to the general direction of the Board and the terms of
any contract or arrangement entered into under proposed section 9 or 10, the
Corporation is to be responsible for the administration of those schemes on behalf of the
Board and the investment and management of the associated Superannuation funds.
Clause 30 will enable the corporation, with the concurrence of the Minister and the
Treasurer, to enter into agreements or arrangements under which it will undertake the
administration or management of certain business undertakings.
Clause 31 will amble the Corporation to appoint staff
Clause 32 will amble the Corporation to appoint agents.
Clause 33 will amble the Corporation to engage consultants to assist it.
Clause 34 will amble the Corporation to establish committees to assist it.
Clause 35 will enpower the Corporation to delegate its functions. However, the
Corporation will be allowed to delegate its functions with respect to the administration
of an association scheme only with the consent of the Board.
Superannuation Administration 1991
Division 2--Financial provisions relating to the Corporation
Clause 36 provides for the financial year of the Corporation.
Clause 37 will require the Corporation to present to the Minister an annual budget
showing estimates of its revenue and expenditure.
Clause 38 makes provision for the financial accommodation of the corporation and
for the investment of funds managed by it.
Clause 39 will allow the Corporation to pool for investment purposes any of the
funds that it manages.
Clause 40 will require the Corporation to exercise its functions in accordance with
prudent commercial principles and sets out other financial objectives for the
Corporation. The clause will empower the Treasurer, in relation to a financial year of the
Corporation, to assess an amount to be paid by the Corporation to the Board from any
profits for that year derived from the exercise of its functions under proposed section 30
or from accumulated reserves so derived. In addition, the Corporation will also be
required to pay to the Board an amount equivalent to the amount of tax that the
Corporation would have been required to pay to the Commonwealth Commissioner of
Taxation if the Corporation had been a company.
Clause 41 provides that the proceeds from any sale of the Corporation's business
undertaking are to be paid to the Board in its capacity as trustee.
Clause 42 provides for the maintenance of accounts and records of the Corporation.
PART 4--MISCELLANEOUS
Clause 43 will continue to empower the Board to resolve disputes arising under
enactments under which certain specified Superannuation schemes are established.
Clause 44 will continue to confer a right of appeal (to the Industrial Commission)
on a person aggrieved by a determination of the Board under proposed section 43.
Clause 45 will allow trustees of the Board or directors of the board of the
corporation and members of staff of the Corporation to hold office in companies.
Clause 46 will protect trustees of the Board, directors of the corporation, members
of the Corporation's staff and agents of, or consultants to, the Board and the Corporation
from liability in respect of any alleged conflict of interest, or alleged improper use of
information, m the exercise of their functions under or in connection with the proposed
Act. The clause further provides for the immunity of those persons from liability for acts
or omissions done or omitted m good faith in the performance of those functions, and
cures any invalidity that would otherwise affect decisions of the Board or the
corporation in certain circumstances.
Clause 47 provides for the method of service of documents on the Board or the
Corporation.
Clause 48 will permit the recovery as a debt of money due to the Board or the
corporation.
Clause 50 deals with coverage of the Corporation's staff by particular trade unions.
Clause 51 enables the Governor-in-Council to make regulations in aid of the
proposed Act.
Clause 52 provides for the proposed Act to bind the Crown.
Clause 53 repeals the Superannuation Administration Act 1987, together with 3
amending Acts. The clause also repeals the Superannuation Administration (Staff
Transitional Regulation 1988, which is now spent.
Clause 54 gives effect to Schedule 5, which contains savings and transitional
provisions and other provisions of a consequential nature.
Clause 55 gives effect to Schedule 6, which contains consequential amendments to
certain other enactments.
Schedule 1 contains provisions relating to the trustees of the Board The Schedule
includes special provisions designed to ensure compliance with the standards prescribed
by the Occupational Superannuation Standards Act 1987 of the Commonwealth and the
regulations under that Act.
Schedule 2 contains provisions relating to the calling and holding of meetings of the
Board This Schedule also includes special provisions designed to ensure compliance
with those standards.
Schedule 3 contains provisions relating to the directors of the board of directors of
the Corporation.
Schedule 4 contains provisions relating to the calling and holding of meetings of the
board of directors of the Coroporation.
Schedule 5 contains appropriate savings and transitional provisions and other
provisions consequential on the enactment of the proposed Act.
Schedule 6 sets out the amendments referred to in clause 55.