Northern Territory Explanatory Statements

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SUPERANNUATION LAW REFORM BILL 2007

Superannuation Law Reform Bill 2007 - Serial 118

EXPLANATORY STATEMENT


GENERAL OUTLINE
The purpose of the Superannuation Law Reform Bill 2007 is to:

· provide a death and invalidity scheme for Northern Territory public sector employees in choice of fund superannuation arrangements;
· provide for member investment choice and an allocated pension for Northern Territory Government and Public Authorities’ Superannuation Scheme (NTGPASS) members;
· comply with the Australian Government “Better Super” reforms; and
· clarify that interest applied to NTGPASS and Legislative Assembly Members’ Superannuation Scheme member accounts can be positive or negative.


PART 1 – PRELIMINARY


Clause 1 Short Title

This act is known as the Superannuation Law Reform Act 2007.

Clause 2 Commencement

Clause 2 provides that the commencement date will be notified in the Gazette. It is intended that all amendments will commence from 1 July 2007 with the exception of provisions allowing for an allocated pension which will commence on 1 January 2008.

PART 2 – AMENDMENT OF SUPERANNUATION ACT
Clause 3 Act amended

Part 2 amends the Superannuation Act.

Clause 4 Repeal and substitution of long title

The purpose of the Superannuation Act is broadened to include the establishment and administration of the Northern Territory Government Death and Invalidity Scheme (NTGDIS), and clarifies that while providing for the administration of the NTGPASS, it is closed.


Clause 5 Amendment of Part I heading

Part I numbering of the Superannuation Act is revised from Roman numerals to Arabic “1”.

Clause 6 Amendment of section 3 (Interpretation)

Section 3 heading “Interpretation” has been replaced with the heading “Definitions”.

Definitions are removed for the terms: Acting Chairperson; Chairperson; Commonwealth Act; Police Associations, Public Service; and Trades and Labor Council.

Definitions are substituted for:

accumulation account meaning a superannuation account in the name of a member or adherent of the NTGPAS Scheme where the value of the superannuation account in the Fund belongs to the member or adherent.

approved deposit means any moneys accepted by the Commissioner for deposit to the credit of a member’s or adherent’s accumulation account.

dependant of another person means a spouse, widow, widower or child of that person, or a person who was at the date of the other persons death, wholly or partially dependant on the other person, or had a legal right to look to the other person for support.

Eligible employee means a permanent employee who is a member of the NTGPAS Scheme.

Fund means the Northern Territory Government and Public Authorities Employees’ Superannuation Fund.

Police Association means The Northern Territory Police Association Incorporated.

public authority means an Agency or an authority or body classified by the regulations as a public authority.

Rules are the Northern Territory Government and Public Authorities’ Superannuation Scheme Rules.

Scheme may mean either the NTGPAS Scheme or the NTGDI Scheme, depending on the context.

spouse includes a de facto partner.

New definitions are inserted for:
Adherent of the NTGPAS Scheme is a person who is not an eligible employee, therefore not a member of the Scheme, but who has an account held in their name in the Fund. This could include former employees or a spouse of a member or former member.

allocated pension is a pension or income stream which pays superannuation benefits as periodic payments that complies with Commonwealth Government legislation regulating the payment of superannuation benefits.

Chair is the Chair of a Board, and includes an Acting Chair while acting in the place of the Chair.

exempt public sector superannuation scheme has the same meaning as in section 10 of the Commonwealth Government’s Superannuation Industry (Supervision) Act 1993.

NTGDI Scheme means the Northern Territory Government Death and Invalidity Scheme.

NTGPAS Scheme means the Northern Territory Government and Public Authorities’ Superannuation Scheme.

Unions NT means the Northern Territory Trades and Labor Council Incorporated, trading as Unions NT.


Clause 7 Repeal and substitution of section 3A

Section 3A has been amended to specify that the NTGPAS Scheme and the NTGDI Scheme are to be administered in accordance with an agreement (the Heads of Government Agreement) entered into with the Australian Government relating to exempt public sector superannuation schemes. Previous references to the superannuation contributions surcharge (the surcharge) have been removed as the surcharge has been abolished effective 1 July 2005.

Clause 8 Amendment of Part II heading

Part II numbering of the Superannuation Act is revised from Roman numerals to Arabic “2”.


Clause 9 Amendment of section 9 (Superannuation Review Board)

Clause 9(2) amends and substitutes simplified terminology for the composition of the Superannuation Review Board membership. The Board comprises a Chair and 3 other Territory residents who are all appointed by the Minister.

Clause 9(3) amends references to “Trades and Labor Council”, to “Unions NT” and provides that membership of the Board must include a representative of Unions NT and a representative of the Police Association.

Clause 9(4) provides that the Police Association representative only sits on the Board if it is conducting a review about a member of the Police Force or an amendment to the NTGPASS Rules which has implications for members of the Police Force otherwise the Unions NT representative sits as a member of the Board.

Clause 10 Amendment of section 10 (Functions and powers of Review Board)

Clause 10 amends section 10(1)(a) and changes references to Part IV of the Superannuation Act to Part 5. Section 10(1)(a) provides the Review Board with the power to review a decision or a course of action of the Commissioner of Superannuation relating to a member of the NTGPAS Scheme or the NTGDI Scheme.

Clause 11 Amendment of section 11 (Superannuation Investment Board)

Clause 11(2) amends and substitutes simplified terminology for the composition of the Superannuation Investment Board membership specifying that the Board must comprise a Chair and 2 Territory residents who are all appointed by the Minister.

Clause 11(3) amends references to “Trades and Labor Council”, to “Unions NT” and provides that the Board must include a representative of Unions NT.


Clause 12 Amendment of section 12 (Functions and powers of Investment Board)

Clause 12(1)(c) amends section 12(4)(c) and substitutes simplified terminology describing the functions and powers of the Superannuation Investment Board relating to the management of the Fund’s assets.

Clause 12(2)(e) amends section 12(4)(e), (f) and (g) and substitutes simplified terminology describing the functions and powers of the Superannuation Investment Board relating to the implementation of investment policies, programs and strategies for the purpose of providing member investment choice.

Clause 12(3) adds a conjunction to paragraphs 12(4)(a), (b) and (d).

Clause 13 Repeal and Substitution of sections 13 to 17

Clause 13 amends the definition of board member to include a Chair, Acting Chair and an alternate member.

Clause 13 also amends section 14 and substitutes simplified terminology for the nomination of Board members:

Section 14(1)(a) requires the Minister write to Unions NT to ask for their nomination of a person to a Board.

Section 14(1)(b) allows the Minister to appoint another Territory resident to a board if Unions NT does not provide a suitable nominee within 28 days of the Minister’s written request.

Section 14(2)(a) requires the Minister write to the Police Association to ask for their nomination of a person to a Board.

Section 14(2)(b) allows the Minister to appoint another Territory resident to a board if the Police Association does not provide a suitable nominee within 28 days of the Minister’s written request.

Section 14(3) provides that where the Minister does not receive a nomination from Unions NT or the Police Association for a representative on a Board, the Minister can appoint another Territory resident in the place of a nominee of Unions NT or the Police Association, and that person will be taken to be the representative of Unions NT or the Police Association.


Clause 13 also amends section 15 and substitutes simplified terminology for the nomination and appointment of alternate members of a Board:

Section 15(1) provides for the appointment of an alternate member of a Board (other than an Acting Chair) by the Minister.

Section 15(2) provides that alternate member can act in the place of the primary member if they are unable or unavailable to act.

Section 15(3) provides that the appointment of an alternate member for Unions NT or the Police Association representative is subject to the same process as the primary member.

Section 15(4) provides that an alternate member should be appointed at the same time as a primary member is appointed.

Clause 13 also amends section 16 and substitutes simplified terminology for the nomination and appointment of a Chair and Acting Chair of a Board:

Section 16(1) provides that the Minister cannot appoint a Chair to a Board unless consultation has occurred between the Minister and Unions NT.

Section 16(2) provides that the Minister may appoint an Acting Chair of a Board after consulting with Unions NT.

Section 16(3) provides that the Acting Chair can act in the place of the Chair if they are unable or unavailable to act.

Section 16(4) provides that an Acting Chair should be appointed when a Chair is appointed.

Clause 13 also amends section 17 and substitutes simplified terminology for the term of appointment for a Chair or other member of a Board:

Section 17(1) specifies that the term of appointment for the Chair and other Board members is 5 years.

Section 17(2)(a) provides that the term of appointment of an Acting Chair or alternate member ceases upon the reappointment of the Chair or primary member, unless the Acting Chair or alternate member is also reappointed at the same time.


Section 17(2)(b) provides that in the event that a Chair or primary member ceases as a member of a Board either because their term of appointment ceases or for any other reason (for example, as a result of illness), the term of appointment for the Acting Chair or alternate member ceases from the date of effect of the appointment of a new Chair or primary member, unless the Acting Chair or alternate member is also reappointed at the same time.

Clause 14 Amendment of section 21 (Disclosure of interest)

Clause 14 amends section 21 and substitutes simplified terminology requiring a primary member or alternate member of a Board to disclose to a Board at the earliest possible an interest in any matter being considered by a Board for which they have an interest. The exceptions to this rule are where a member or alternate member’s interest is as a result of them being a member or (other person entitled to be a member) of the NTGPAS Scheme or a member of the NTGDI Scheme or if the interest is shared in common with at least 25 other people.

Clause 15 Repeal and substitution of section 22

Clause 15 amends section 22 and substitutes simplified terminology relating to meetings of a Board.

Section 22(1) provides that a Chair can call a meeting of a Board at anytime and that any member of a Board can request a meeting. Upon a request being received, the Chair must assemble a meeting of a Board.

Section 22(2) sets the earliest date (7 days), that a meeting of a Board can be assembled following a request from a member.

Section 22(3) provides that the Chair of a Board must officiate at a meeting of Board if present.

Section 22(4) provides that the Acting Chair must preside at a meeting of a Board if the Chair is absent.

Section 22(5)(a) sets that 3 members are required to make a quorum. A Board meeting must comprise a Chair or Acting Chair and 2 other members.

Section 22(5)(b) provides that where a Board is required to make a decision that it will be decided on the basis of a vote.


Section 22(5)(c) allows a Board to determine its own process and structure for Board meetings.

Section 22(6) requires the Board to keep minutes of each meeting.

Clause 16 Amendment of Part III heading

Part III numbering of the Superannuation Act is revised from Roman numerals to Arabic “3”.

PART 3
Clause 17 New section 25A

Clause 17 clarifies the meaning of Scheme in Part 3 of the Superannuation Act (the Act). As the Act establishes two schemes, the NTGPAS Scheme and the NTGDI Scheme, references to the “Scheme” in Part 3 mean the NTGPAS scheme.

Clause 18 Repeal of section 27

Clause 18 repeals section 27 relating to requests for information. These provisions have been incorporated into new Part 5, sections 45T and 45U with general application to both the NTGPAS Scheme and the NTGDI Scheme.

Clause 19 Repeal and substitution of section 28

Clause 19 repeals section 28 relating to records of accumulation accounts. Section 28 is replaced with simplified terminology which requires the Commissioner of Superannuation to keep a record of contributions, approved deposits and the return on accumulation accounts for each member.

Clause 20 Amendment of section 29 (Payment of benefits)

Clause 20 amends and simplifies the wording in section 29(2)(b) providing that where funds for the payment of Territory-financed benefits for the NTGPAS Scheme are inadequate, appropriation is made from the Territory’s public account as required to meet the benefit payments.


Clause 21 Repeal and substitution of sections 31 to 35

Clause 21 repeals sections 31 to 35. These sections applied to the NTGPAS Scheme dealing with discretionary benefits, the assignment of benefits, payment of benefits on the death of a member where probate has not been arranged, payment to a person who is not capable of managing their financial affairs and unclaimed benefits.

These sections are now incorporated in new sections 45V to 45Z with general application to both the NTGPAS Scheme and the NTGDI Scheme.

Section 31 establishes an NTGPAS Scheme allocated pension and allows a person who has an accumulation account in the Fund to elect to receive a benefit in the form of an allocated pension.

Clause 22 Amendment of section 39 (Fund accounts)

Clause 22 amends section 39(2)(b)(iii) replacing outdated references to Consolidated Revenue Fund with the Territory’s public account.

Clause 23 Repeal and substitution of section 41

Clause 23 repeals section 41dealing with the fixing of interest rates. Section 41 establishes member investment choice for NTGPAS Scheme members and implements legal advice to clarify the definition of interest.

Section 41(1) provides that with the Superannuation Investment Board’s approval, the Commissioner of Superannuation can offer members and adherents (eg former members or spouses of a member or former member) with a choice of investment options.

Section 41(2) provides that one of the investment options offered will be a default option.

Section 41(3) provides that a member or an adherent can switch between investment options at any time subject to completing a switch form.

Section 41(4) provides that if a member or an adherent does not make a choice that their accumulation account will be invested in the default option.


Section 41(5) provides that a member’s or an adherent’s accumulation account will be invested in the investment option chosen by the member or adherent, or invested in the default option where an investment option is not chosen.

Section 41(6) allows the Commissioner of Superannuation to charge a fee for switching between investment options and that the fee will be deducted from a member’s or an adherent’s accumulation account. It is intended that the first switch in a financial year will be free, but that a fee will be charged for subsequent switches within a financial year.

Section 41A “Return on accumulation accounts” is a new section.

Section 41A(1)(a) provides that at the end of a financial year the Commissioner of Superannuation must publish a notice declaring the final rate of return for each investment option which may be positive, negative or neutral.

Section 41A(1)(b) allows the Commissioner of Superannuation to publish a notice advising of an interim rate of return for each investment option at any other time during a financial year which may be positive, negative or neutral.

Section 41A(2)(a) requires the gazettal of the notice declaring a final rate of return for each investment option by the Commissioner of Superannuation and provides that subject to this condition being met, the Commissioner can choose to publish the notice in any other way considered appropriate (for example, on a website).

Section 41A(2)(b) provides that the Commissioner of Superannuation can choose to publish an interim notice declaring an interim rate of return for each investment option in any way considered appropriate (for example, on a website).

Section 41A(3) provides that subject to the gazettal of a notice declaring the final rate of return for each investment option at the end of the financial year, that a member’s or adherent’s superannuation account will be credited or debited at the final rate of return applying to the particular investment option chosen by the member or adherent.


Section 41A(4) provides that if a member’s or adherent’s superannuation account is to be paid out or transferred to another superannuation fund, that the Commissioner of Superannuation can determine, after considering any interim notice and other investment information, an interim rate of return for the particular investment option chosen by the member or adherent for the purposes of calculating the benefit to be paid out or transferred.

Section 41(A)(5)(a) provides that a new notice may be published in the Gazette rectifying the rate of return for an investment option if after publishing an interim or final notice an error is identified in determining the rate of return for an investment option.

Section 41(A)(5)(b) provides that where a new notice is published rectifying the rate of return for an investment option, that if required, the Commissioner of Superannuation may make adjustments to correct a member’s or adherent’s superannuation account.

Clause 24 Amendment of section 42 (Recovery of money owing to fund or Territory)

Clause 24(1) amends the heading in section 42 to remove the word “Territory” which is no longer required.

Clause 24(2) removes section 42(4) dealing with the recovery of overpayments and incorporates it in new section 50B, with general application to the NTGPAS Scheme and the NTGDI Scheme.

Clause 25 Amendment of section 43 (Annual reports and audit)

Clause 25 separates section 43(2) relating to the audit of the Northern Territory Government and Public Authorities Employees’ Superannuation Fund’s (the NTGPAES Fund) financial statements into two sub sections and simplifies and modernises terminology in section 43(3) relating to tabling requirements for the NTGPAS Scheme annual reports.

Clause 25(2) requires the Superannuation Investment Board provide to the Auditor-General the financial statements for the NTGPAES Fund within three months of the end of a financial year.


Clause 25(3) requires the Auditor-General to audit the financial statements of the NTGPAES Fund within three months (or a longer period if approved by the Administrator) of receiving them and to provide a report on the audit, to the Minister and the Superannuation Investment Board.

Clause 25(4) requires the Minister table the NTGPAS Scheme annual report, the Auditor-General’s report on the audit and the NTGPAES Fund’s financial statement in the Legislative Assembly within 6 sitting days of receiving the last report.

Clause 26 Repeal of section 45

Clause 26 repeals section 45 dealing with the actuarial review of the NTGPAS Scheme and incorporates it in new section 45ZA. with general application to the NTGPAS Scheme and the NTGDI Scheme.

Clause 27 Amendment of section 45A (Accounts for spouses)

Clause 27(1) amends section 45A(2)(b) and simplifies terminology relating to types of payments that can be accepted into an account established for an adherent as an approved deposit.

Clause 27(2) repeals section 45A(4) dealing with record keeping requirements for accounts established for an adherent (spouse of a member or former member) and section 45A(5) dealing with interest payable to an account established for an adherent. Record keeping requirements for these accounts are now dealt with in section 28 and interest payable is now dealt with in section 41A relating to returns on accumulation accounts.

Clause 28 Amendment of section 45D (Superannuation accounts for non-member spouses)

Clause 28(1) amends section 45D(2)(c) and simplifies terminology relating to types of payments that can be accepted into an account established for a non-member spouse (as a result of a family law superannuation split) as an approved deposit.

Clause 28(2) repeals section 45D(4) dealing with record keeping requirements for non-member spouse accounts and section 45D(5) dealing with interest payable to a non-member spouse account. Record keeping requirements for these accounts are now dealt with in section 28 and interest payable is now dealt with in section 41A relating to returns on accumulation accounts.


Clause 29 New Parts 4 and 5

Clause 29 inserts new Part 4 ‘Northern Territory Government Death and Invalidity Scheme’ providing the legislative and administrative framework for the NTGDI Scheme and Part 5 ‘Provisions of General Application’ which apply to both the NTGPAS Scheme and the NTGDI Scheme after section 45D ‘Superannuation accounts for non-member spouses’.

Part 4 - Northern Territory Government Death and Invalidity Scheme.

Section 45E(1) provides definitions for:

approved allowances meaning allowances or entitlements of a particular type or applying to a particular class of employees. These are regular allowances which have been paid for 12 months or in the opinion of the Commissioner of Superannuation are likely to be paid for 12 months. Approved allowances must be certified by an employer and accepted by the Commissioner of Superannuation to be included in a member’s superannuation benefit salary.

benefit salary means the salary on a member’s exit date on which a member’s NTGDI Scheme benefit is calculated:

(a)(i) for an executive contract officer on full-time employment, the salary for superannuation purposes specified in their contract (that is, 65% of the total remuneration package) on their last day of employment.

(a)(ii) for an executive contract officer on part-time employment, the full-time equivalent salary for superannuation purposes specified in their contract (that is, 65% of the total remuneration package) on their last day of employment.

(b)(i) for a uniformed member of the Police Force (excluding police auxiliaries and executive contract officers) in full-time employment is 130% of the member’s salary (excluding allowances) plus any approved allowance (eg Northern Territory Allowance) on their last day of employment as certified by their employer and accepted by the Commissioner of Superannuation. The benefit salary is the same as that applying to police officers in the NTGPAS Scheme.

For example:

Assume an individual, Andrew Constable, who is a member in full-time employment in the Police Force (Uniform) whose salary at his exit date comprised:

· a salary of $100,000 per annum;
· approved allowances totalling $10,000 per annum; and
· a Northern Territory Allowance of $960 per annum.
Andrew’s benefit salary would be calculated as:
· (1.3 x $100,000) + $960 = $130,960.
Andrew’s benefit salary would not be calculated as:
· 1.3 x ($100,000 + $960); or
· 1.3 x ($100,000 + $10,000); or
· 1.3 x ($100,000 + $10,000 + $960).
(b)(ii) for a uniformed member of the Police Force (excluding police auxiliaries and executive contract officers) in part-time employment is 130% of the member’s full-time equivalent salary (excluding allowances) plus any approved allowance (eg a Northern Territory Allowance) on their last day of employment as certified by their employer and accepted by the Commissioner of Superannuation. The benefit salary is the same as that applying to police officers in the NTGPAS Scheme.
For example:

Assume an individual, Andrew Constable, who is a member in part-time employment (0.5) in the Police Force (Uniform) whose salary at his exit date comprised:

· a part-time salary of $50,000 per annum;
· approved allowances totalling $5,000 per annum; and
· a Northern Territory Allowance of $480 per annum.
Andrew’s benefit salary would be calculated as:
· (1.3 x ($50,000 / 0.5)) + ($480 / 0.5) = $130,960.
Andrew’s benefit salary would not be calculated as:
· 1.3 x (($50,000 / 0.5) + ($480 / 0.5)); or
· 1.3 x (($50,000 / 0.5) + ($5,000 / 0.5)); or
· 1.3 x ((($50,000 / 0.5) + ($5,000 / 0.5) + ($480 / 0.5))).


(c) for any other employee of the Northern Territory public sector, their actual salary, or if they are in part-time employment, their full-time equivalent salary on their last day of employment as certified by their employer and accepted by the Commissioner of Superannuation.

(d) for a Member of Parliament is their basic salary plus any additional salary (for example, for Ministerial Office) on their last day of employment as certified by the Clerk of the Legislative Assembly and accepted by the Commissioner of Superannuation.

death benefit is defined in section 45P ‘Benefit payable on death’.

employee member is aligned with the definition of permanent employee in section 3 of the Superannuation Act. The term employee member is only used in Part 4 to identify and describe specific classes of members and the benefit salary to be used for the purposes of determining amount of the NTGDI Scheme benefit payable to a member.

For example:

(a) an executive contract officer;

(b) a police officer (other than an executive contract officer);

(c) an employee of the Northern Territory public sector; and

(d) a member of the Legislative Assembly.

employment means service as an employee of the Northern Territory public sector or service of a person employed in a public office who exercises and performs function and powers of a public office as opposed to performing services as an employee (for example, a Member of Parliament).

entry date is defined in section 45H(3) to mean the date which a permanent employee or a Member of Parliament becomes a member of the NTGDI Scheme.

exit date is the date a member ceases membership of the NTGDI Scheme.

invalidity retirement means retirement from employment because of a physical or mental condition as defined in section 45F.

invalidity retirement benefit means a benefit as defined in section 45Q payable to a member because they are retired from employment because of a physical or mental condition.

medical condition means a physical or mental condition that is assessed as being a significant risk that would result in a member’s death or invalidity retirement.


member means a member of the NTGDI Scheme.

nominal retirement age means a member’s maximum retirement age of 65 years, or the age at which retirement becomes compulsory if it is younger than 65 (for example, age 60 for police officers).

NTGDIS benefit is the benefit payable in the event of a member’s death or invalidity retirement and is defined in section 45N. The NTGDIS benefit is calculated using the formula:

17.5% x member’s benefit salary x age based multiplier x member’s part-time ratio (or 1 if full-time) x reduced benefit adjustment factor (if applicable).

parliamentary member means a Member of the Legislative Assembly.

part-time member means a member who is employed in a part-time capacity at their exit date.

part-time ratio is the ratio for a member who is in part-time employment, determined by:

(a) dividing the member’s actual hours of work by the hours for full-time employment at their exit date; or
(b) the Commissioner of Superannuation where the part-time hours vary, which is a fair estimate of the part-time ratio for a member.
reduced benefit classification is defined in section 45K and means a classification assigned to a member for a pre-existing medical condition. The reduced benefit classification has the effect of reducing the NTGDI Scheme benefit where death or invalidity retirement occurs within the first ten years of membership and is a direct result of a medical condition listed in the member’s reduced benefit classification certificate.

reduced benefit classification adjustment factor is defined in section 45L and means the factor applied to the NTGDIS benefit to reduce the benefit because the member’s death or invalidity retirement occurs within the first ten years of membership and is as a direct result of a medical condition in a member’s reduced benefit classification certificate.

salary is defined to include approved allowances certified by a member’s employer and accepted by the Commissioner of Superannuation.

Scheme means the NTGDI Scheme.



workers’ compensation agreement means an agreement entered into between a member of the NTGDI Scheme and their employer which:

(a) allows a lump sum amount to be received in lieu of payments under the workers’ compensation legislation (that is, the Work Health Act);
(b) does not remove an employee’s right to worker’s compensation payments under the Work Health Act; and
(c) requires the amount paid under the agreement to be repaid by the employee if they pursue any claim for entitlements under the Work Health Act.
These type of agreements are often referred to as a Hopkins agreement after the decision in Hopkins v Collins-Angus & Robertson Pty Ltd (unreported, Angel J, Supreme Court, 21 May 1997.

Section 45E(2) provides that the Commissioner can determine the types of allowances and how those allowances are to be treated for the purposes of determining the benefit salary for classes of members (for example, police officers).

Section 45F Invalidity Retirement

Section 45F(1) defines the retirement from employment due to invalidity for a NTGDI Scheme member.

Section 45F(1)(a) provides that a NTGDI Scheme member is retired from his or her employment on invalidity grounds if the Commissioner of Superannuation has approved the retirement under section 50 of the Superannuation Act.

Section 45F(1)(b) provides that a NTGDI Scheme member is retired from his or her employment on invalidity grounds if the Commissioner of Superannuation approves the payment of an invalidity benefit, notwithstanding that the member may have voluntarily in involuntarily resigned or retired from employment.

Section 45F(1)(c) provides that a NTGDI Scheme member is retired on invalidity grounds if their employment is terminated and the Commissioner of Superannuation approves the payment of an invalidity benefit.


Section 45F(2) provides that the Commissioner of Superannuation can only approve a member’s invalidity retirement under section 50 of the Superannuation Act after making an assessment after considering medical and other information that the at member’s date of exit they were because of a physical or mental condition (or both) unable to work again in either a full-time or part-time capacity in any occupation in which they were qualified to do so.

Section 45F(3) provides that in determining a member’s ability to engage in suitable employment for which they are qualified that the Commissioner of Superannuation can only consider available employment within the Northern Territory public sector or a public authority.

Division 2 – Establishment and membership of the Northern Territory Government Death and Invalidity Scheme.

Section 45G Establishment of the Scheme

Section 45G establishes the Northern Territory Government Death and Invalidity Scheme (the NTGDI Scheme).

Section 45H Membership of Scheme

Section 45(H) defines the criteria a person must satisfy to be a member of the NTGDI Scheme.

Section 45(H)(1) provides that a person is a member of the NTGDI Scheme if both of the following conditions are met:

(a) the person is:

(i) a permanent employee in full-time or part-time employment under the Public Sector Employment Management Act or a member of the Police Force; or
(ii) an executive contract officer; and
(b) the person is not a member of the closed NTGPAS Scheme; (meaning that a permanent employee's last period of continuous employment commenced after 9 August 1999).


Section 45(H)(2) defines that a Member of the Legislative Assembly elected for the first time at the general election on 18 June 2005 (or a later election) is a member of the NTGDI Scheme.

Section 45(H)(3) is designed solely to fix the entry date for the purpose of the medical classification regime under the NTGDI Scheme to determine whether or not a person is required to complete a medical declaration.

For example:

If a person commenced employment as a permanent employee on 1 July 2006 and the NTGDI Scheme commenced on 1 July 2007, the person’s entry date would be 1 July 2006 and for the purposes of the medical classification regime, they are not required to complete a medical declaration but may choose to do so if they wish.

If a person commenced employment as a permanent employee on 10 July 2007 and the NTGDI Scheme commenced on 1 July 2007, the person’s entry date is 10 July 2007 and for the purposes of the medical classification regime, they must complete a medical declaration.

Division 3 – Medical Classification.

Section 45J Medical classification on entry

Section 45J(1) provides that all members are required to complete and submit a medical declaration form to the Commissioner of Superannuation upon entry to the NTGDI Scheme.

The exceptions to this rule are:

· members whose entry date is before 1 July 2007 (the date the NTGDI Scheme commences. These member’s are not required to submit a medical declaration but may choose to do so; or
· members for whom the Commissioner of Superannuation has accepted a medical classification or status applying under a previous superannuation arrangement or for the purposes of employment with the Northern Territory public sector or another state or Territory (for example an executive contract officer who was previously a member of the NTGPAS Scheme).


Section 45J(2) provides that after receiving a completed medical declaration, the Commissioner of Superannuation may require a member to:

(a) provide further medical information; or
(b) undergo a medical examination(s) by a medical practitioner approved for this purpose by the Commissioner of Superannuation.

Section 45K Reduced benefit classification

Section 45K(1) provides that after receiving medical advice, the Commissioner of Superannuation may issue a reduced benefit classification in respect of a member if in his opinion the member has an above average risk of death or invalidity retirement in the first ten years of scheme membership because of a physical or mental condition (or both) which existed before entry into the NTGDI Scheme.

Section 45K(2) provides that where the Commissioner of Superannuation accepts a medical classification or status applying under a previous superannuation arrangement, or for the purposes of employment with the Northern Territory public sector or another state or Territory, any reduced benefit classification issued shall conform with that previous medical classification or status.

Section 45K(3) provides that the medical condition(s) must be specified in a reduced benefit classification certificate.

Section 45K(4) provides that where a member is issued with a reduced benefit classification, the Commissioner of Superannuation must provide the member with the reasons for issuing the certificate.

Section 45K(5) provides that if a member fails to comply with a request to provide further medical information or to undergo an additional medical examination, a reduced benefit classification will be issued to the member for any medical condition in existence at the member’s entry date which results in the death or invalidity retirement of the member within the first 10 years of membership.


Section 45L Reduced benefit in certain cases

Section 45L defines when a reduction of a member’s death or invalidity benefit occurs.

Section 45L(1) provides that a member’s death or invalidity benefit will be reduced if:

(a) a member has been issued with a reduced benefit classification certificate or a certificate has been taken to be issued in accordance with section 45K; and
(b) the member becomes entitled to a benefit within the first 10 years of membership; and
(c) the entitlement to a benefit is due to a medical condition(s) specified in the reduced benefit classification certificate.

Section 45L(2) provides that a member’s invalidity benefit will be reduced if:

(a) invalidity retirement occurs within the first 10 years of membership; and
(b) the invalidity retirement is directly related to a medical condition:
(i) the Commissioner of Superannuation has reasonable grounds to believe was in existence at the time the member joined the NTGDI Scheme; and
(ii) that the member knew they had at their entry date, but did not disclose in their medical declaration or examination(s); and
(c) had the member disclosed this information would have resulted in the member receiving a reduced benefit classification certificate.

Section 45L(3) provides that were a benefit is to be reduced the reduction shall be determined by applying a reduced benefit classification factor.

Section 45L(4) defines the formula to determine the reduced benefit classification adjustment factor where death or invalidity retirement occurs within the first 10 years of membership because of a medical condition(s) specified in a reduced benefit classification certificate as:

Complete months between entry date and exit date
120 months


Section 45L(5) provides that the Commissioner of Superannuation may increase the fraction if the reduced benefit classification has been issued on the basis of medical classification or status under a previous superannuation arrangement that specifies a greater period of time.

Division 4 – Entitlements.

Section 45M Entitlement to benefits under the Scheme

Section 45M provides that a benefit is payable under the NTGDI Scheme if:

(a) a member dies leaving any surviving dependants, or
(b) a member retires on invalidity grounds.

Section 45N NTGDIS benefit

Section 45N(1) defines the formula for calculating the NTGDI Scheme benefit as:

B = 17.5% x S x Y x P x A

Where:

B is the amount of the benefit;

S is the member’s benefit salary (previously defined);

Y is the age based multiplier determined on the member’s age at their exit date;

P is the part-time ratio for a part-time member, for full-time employees the ratio is 1; and

A is the reduced benefit classification factor determined by section 45L and in all other cases 1.

Section 45N(2) defines the age based multiplier as:


(a) zero for members aged 60 and older at their exit date;
(b) the difference in years between the member’s age at their exit date and 60 years (with part years expressed as a decimal fraction) for members who are between 55 and 60 years of age at their exit date;


(c) the difference in years between the member’s age at their exit date and the member’s maximum retirement age (60 for uniform police and 65 for all others) less the number of years between the member’s exit date and the date the member turned 50 (with part years expressed as a decimal fraction);
(d) the number of years between the member’s age at their exit date and the member’s maximum retirement age (60 for uniform police and 65 for all others) for members who are under 50 years of age on their exit date (with part years expressed as a decimal fraction).

Section 45P Benefit payable on death

Section 45P(1) provides that were a member dies and they are survived by a dependant(s) that the benefit is to be paid to the member’s estate.

Section 45P(2) provides that in the event of death, if an amount is paid to a dependant(s) of a deceased member under worker’s compensation legislation or under a worker’s compensation agreement (previously defined) that the death benefit will be reduced by this amount.

Section 45P(3) provides that where a workers’ compensation benefit is received by way of periodic payments that the amount of the lump sum capital value of the benefit (as determined by an actuary) will be reduced from the death benefit.

Section 45Q Benefit payable on invalidity retirement

Section 45Q(1) provides that were a member becomes entitled to an invalidity benefit, that the benefit will be paid to the member.

Section 45Q(2) provides that in the event invalidity retirement, if an amount is paid to a member under worker’s compensation legislation or under a worker’s compensation agreement (previously defined) that the invalidity benefit will be reduced by this amount.

Section 45Q(3) provides that where a workers’ compensation benefit is received by way of periodic payments that the amount of the lump sum capital value of the benefit (as determined by an actuary) will be reduced from the invalidity benefit.


Section 45R Anticipatory payments

Section 45R(1) provides that where a member suffers a reduction or suspension of their salary because of a physical or mental condition, that the member can apply to the Commissioner of Superannuation for a payment to alleviate financial hardship.

Section 45R(2) provides that the Commissioner of Superannuation cannot approve a payment under subsection (1) unless:

(a) the member is being assessed for invalidity retirement; or
(b) the Commissioner of Superannuation after considering medical advice and other information has made an assessment that the member is considerably incapacitated because of a medical condition.

Section 45R(3) provides that the payment cannot exceed:

(a) the amount needed to make up the relevant salary loss (as defined in section 45R(6); or
(b) the amount of the invalidity benefit on the assumption that the member would be retired on invalidity grounds.

Section 45R(4) provides that an anticipatory payment is not payable after a member ceases to be a member of the NTGDI Scheme.

Section 45R(5) provides that where payments are made to a member to alleviate financial hardship or salary loss under section 45R(1) the payments made will be offset against any death or invalidity benefit payable.

Section 45R(6) defines that the relevant salary loss is the amount required to bring the member’s salary up to 80 per cent of the difference between the member’s reduced salary and the salary received prior to incapacity.

Section 45S Source of payment

Section 45S(1) provides that death and invalidity benefits paid under the NTGDI Scheme are paid from the Territory’s public account with appropriation automatically made to meet benefit payments as required.


Section 45S(2) provides that the Minister may determine an appropriate portion of funds payable by a public authority in relation an employee’s membership.

Section 45S(3) provides that a public authority must:

(a) enter into an arrangement if required by the Minister to reimburse the Territory for the cost of paying benefits to its employees or former employees who are or were members of the scheme; and
(b) make payments to the Territory as required by the arrangement entered into between the public authority and the Minister.

Section 45S(4) provides that the Minister may exempt a public authority from the requirement to reimburse the Territory, funds relating to an employee’s membership of the scheme.

Part 5 Provisions of general application to both schemes
(NTGPAS Scheme and the NTGDI Scheme)
Division 1 – Information.

Section 45T Information to be provided by Commissioner

Section 45T was previously section 27 relating to the provision of information by the Commissioner of Superannuation following a request from a member or former member.

Section 45T(1) provides that a member or former member of either scheme can request the Commissioner of Superannuation to provide information about their current and future benefit and any other information to allow a member or former member to calculate their benefit.

Section 45T(2) provides that if a member makes a request that the Commissioner must provide the information as soon as possible after the request.

Section 45U Information to be provided by member or employer

Section 45U(1) was previously section 27(2) and identifies the penalty for a member of either scheme who fails to provide information necessary for the administration of either scheme when requested to do so by the Commissioner of Superannuation. A maximum of 20 penalty units applies.


Section 45U(2) was previously section 27(2) and identifies the penalty for an employer of a member of either scheme who fails to provide information necessary for the administration of either scheme when requested to do so by the Commissioner of Superannuation. A maximum of 50 penalty units applies.

The penalties imposed under section 45U replace an existing penalty regime imposed by a series of Northern Territory statutes comprising section 69A of the Summary Offences Act, section 38DA of the Interpretation Act and section 3 of the Penalty Units Act. The current penalty regime imposes a maximum penalty of 3 months imprisonment and or a maximum fine of $2750.

The penalty provisions under section 45U make it clear to the member and the employer that there is a penalty for failure to comply with a request of the Commissioner of Superannuation. For a member, the penalty is reduced as there is no term of imprisonment and the maximum fine is reduced to $2200. For the employer of a member, the level of penalty aligns with the Attorney-General’s policy governing the level of penalty imposed for offences of this nature.

Division 2 – Benefits.

Section 45V Discretionary benefits

Section 45V was previously section 31 and provides the Commissioner of Superannuation with the ability to approve a payment of a benefit not expressly provided for under the Superannuation Act or the Rules, subject to written approval of the Minister and the Review Board.

It is intended that this type of benefit would only be considered in instances where a member altered their employment situation and did not realise that their decision adversely affected their superannuation benefit. This provision would only be used to bring the member’s superannuation benefit back to what they would have received but for that decision.

The power to approve a discretionary benefit is not intended to be used for creating a new class of benefit under the NTGPAS Scheme or the NTGDI Scheme.


Section 45W Assignment, etc, of benefit

Section 45W(1) was previously section 32(1) and provides that a member cannot charge, transfer, assign or surrender any moneys in his account in either Scheme.

Section 45W(2) was previously section 32(2) and provides that the assignment of a future benefit is void.

Section 45X Payment without grant of probate etc.

Section 45X was previously section 33 dealing with the payment of death benefits.

Section 45X(1) provides that where a death benefit is payable to the estate of a deceased member, and letters of administration or the grant of probate has not been arranged that the Commissioner of Superannuation may pay the benefit:

(a) to meet the funeral expenses of a deceased member;
(b) to a surviving dependant(s) of a deceased member;
(c) to some other person, if there is no dependant(s), if satisfied that the deceased member intended to leave the benefit to the person.

Section 45X(2) provides that the amount payable under section 45X(1) cannot exceed $20,000 or a higher amount if fixed by Regulation. The Commissioner of Superannuation can pay an amount greater than the prescribed limit to a dependant to alleviate financial hardship.

Section 45X(3) means that where a person receives a payment in section 45X(1) that the death benefit payable will be offset against the payment received by the person and discharges the Commissioner of Superannuation (and Superannuation Investment Board if relevant) from any further liability.

Section 45X(4) provides that the Commissioner of Superannuation can pay a death benefit to the Public Trustee instead of the deceased’s legal representative if warranted.

Section 45X(5) provides that the Public Trustee’s receipt of the benefit discharges the Commissioner of Superannuation (and the Superannuation Investment Board if relevant) from any further liability.


Section 45Y Payment where beneficiary incapable

Section 45Y was previously section 34 dealing with payment of benefits were a person was not capable of managing their affairs.

Section 45Y(1) provides that if in the Commissioner of Superannuation’s opinion a person cannot manage their own affairs because of a medical condition or for some other reason, that the benefit can be paid to the Public Trustee.

Section 45Y(2) provides that the payment to the Public Trustee is taken to be a payment made to the person.

Section 45Z Unclaimed benefits

Section 45Z was previously section 35 and allows the payment of benefits not claimed within 6 years of becoming payable, to the Territory’s public account.

Division 3 – Actuarial Review.

Section 45ZA Actuarial Review

Section 45ZA was previously section 45 relating to actuarial reviews.

Section 45ZA(1) requires an actuarial review of both schemes be conducted as at 30 June 2010 or at an earlier date if the Minister requires.

Section 45ZA(2) provides that actuarial reviews are to be undertaken at 3 yearly intervals after 30 June 2010 or an earlier date if the Minister requires.

Section 45ZA(3) provides that the Commissioner of Superannuation can engage an actuary to perform the review.

Section 45ZA(4) provides that the Territory will pay for the cost of engaging an actuary to perform a review.


Clause 30 Repeal and substitution of Part IV heading

Clause 30 repeals Part IV heading “Claims for Benefits and Review of Decisions”, and substitutes a new sub heading, “Division 4 - Claims for benefits and review of decisions” under the new Part 5.

Division 4 – Claims for Benefits and Review of Decisions.

Clause 31 Amendment of section 46 (Claim for benefit under Scheme)

Clause 31(1) amends section 46(1) to simplify terminology and make it clear that this section applies to both the NTGPAS Scheme and NTGDI Scheme relating to a claim for a benefit from either scheme.

Clause 31(2) amends section 46(2) and simplifies terminology allowing the Commissioner of Superannuation to determine procedures to be followed by an employer or a member before a decision is made regarding an entitlement to a particular benefit. For example, an employer cannot dismiss an employee on the grounds of invalidity unless the Commissioner of Superannuation agrees to that retirement and retires the person under section 50 of the Superannuation Act.

Clause 32 Repeal and substitution of Part V heading

Clause 32 repeals Part V heading “Miscellaneous”, and substitutes a new, “Division 5 - Miscellaneous” under the new Part 5.

Division 5 – Miscellaneous.

Clause 33 Amendment of section 50 (Approval for retirement for invalidity)

Clause 33 amends section 50 ‘Approval for invalidity retirement’ to make it clear that it applies to members of the NTGPAS Scheme and the NTGDI Scheme.


Clause 34 Repeal and substitution of section 50A

Clause 34 amends section 50A to allow the Commissioner of Superannuation to charge a fee for services provided.

Clause 50A(1) provides that the Commissioner of Superannuation can charge a fee if a service is provided at the request of a person.

Clause 50A(2) allows a fee for the provision of a service at the request of a member to be deducted from a member’s accumulation account.

For example:

A fee may be deducted from a member’s accumulation account at the end of a financial year for the administration of an allocated pension or a fee may be charged where a member chooses to switch from one investment option to another.

Clause 50A(3) the Commissioner of Superannuation can charge a fee for adhoc services provided to a member or an adherent (for example, the provision of benefit estimates or financial advice).

50B Power to recover money on behalf of the Territory

Section 50B was previously section 42(4) and provides for the recovery of overpayments (for example, an overpaid benefit) from a member of either the NTGPAS Scheme or the NTGDI Scheme and allows the Commissioner of Superannuation, on behalf of the Territory to recover the overpayment as a debt.

Clause 35 Repeal of sections 52 and 53

Sections 52 and 53 provided transitional arrangements for Northern Territory public sector employees and uniformed Police Officers who were members of the Commonwealth Superannuation Scheme (CSS) to transfer to the NTGPAS Scheme following its commencement in 1986.

These sections are now redundant as they only had relevance at the time employees transferred from the CSS to the NTGPAS Scheme.


Part 3 Amendment of Legislative Assembly Members’ Superannuation Fund Act

Clause 36 Act amended

Clause 36 amends the Legislative Assembly Members’ Superannuation Fund Act (LAMS).

Clause 37 Amendment of section 3 (Definitions)

Clause 37 amends the definition of “member” to make it clear that a member of LAMS is a member of the Legislative Assembly who was elected before the closure of the scheme on 9 May 2005, and who has been continually a member of the Legislative Assembly since that date.

Clause 38 Repeal and substitution of sections 4A and 4B

Clause 38 amends sections 4A and 4B relating to members’ accumulation accounts and implements legal advice to clarify the definition of interest.

Section 4A(1) provides that the Trustees of LAMS must keep a record of each account relating to a member of LAMS.

Section 4A(2) provides that the account must keep details of a member’s contributions and the return (interest) on the account for each financial year.

Section 4B(1) provides that the Trustees of LAMS must determine a final rate of return at the end of each financial year to be to be applied a member’s accumulation account which can be positive, negative or neutral.

Section 4B(2) provides that the final rate of return is to be credited or debited to a member’s accumulation account at the end of a financial year.

Section 4B(3) provides that where a member ceases membership during a financial year, the Trustees must determine an interim rate of return which may be positive, negative or neutral to be applied to a member’s benefit for the purposes of calculating a benefit.


Section 4B(4) provides that the interim rate of return determined by the Trustees to be applied to a member’s accumulation account must be credited or debited as at the date cessation of membership.

Section 4B(5) provides that a final or interim rate of return must approximate the rate of return (after fees and taxes) of the Fund’s investments.

Section 4B(6)(a) requires the Trustees to provide to members a statement showing the balance in the member’s accumulation account after rate of return has been credited or debited against the member’s accumulation account.

Section 4B(6)(b) provides that the statement must show the rate of return credited or debited against a member’s accumulation account and the amount relating to the rate of return credited or debited against a member’s accumulation account.

Part 4 Amendment of Northern Territory Government and Public Authorities’ Superannuation Scheme Rules

Clause 39 Rules amended

Clause 39 amends the Northern Territory Government and Public Authorities’ Superannuation Scheme Rules.

Rule 1 - The definition of “declared interest rate” has been omitted as it is now redundant as section 41 as amended now deals with rates of return on a member’s accumulation account.

Rule 5 - Rule 5B(3), 5C(3), 5D(2), 5E(5) and 5F(5) references to “Part III” roman numeral have been replaced with references to “Part 3” Arabic.

Rule 13 - Rule 13(2) is amended to remove the reference to age 65 for the preservation of superannuation benefits, in line with the Australian Government ‘Better Super’ changes. The removal of age 65 under Better Super now means that a person can keep their money in superannuation indefinitely.

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