Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Hansard source

I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

The Superannuation Legislation Amendment (Trustee Board and Other Measures) Bill 2006 will consolidate and revise the governance arrangements for the Commonwealth Superannuation Scheme, the CSS, the Public Sector Superannuation Scheme, the PSS, and the Public Sector Superannuation Accumulation Plan, the PSSap, with effect from 1 July 2006.

To make these changes the bill will amend the Superannuation Act 1976, the Superannuation Act 1990, the Superannuation Act 2005 and the Superannuation Legislation Amendment (Superannuation Safety and Other Measures) Act 2006.

The consolidation of the governance arrangements for the Australian government’s civilian employees’ superannuation schemes under a single board is being undertaken consistent with the governance principles of the Review of the corporate governance of statutory authorities and office holders, which is known as the Uhrig report.

Following the release of the Uhrig report, an assessment in relation to the CSS board, which is the trustee of the CSS fund and responsible for the administration of the CSS, and the PSS board, which is the trustee for the PSS and the PSSap and the administration of those schemes, recommended changes to those governance arrangements.

The assessment recommended that the membership of the PSS board be increased from five to seven, which is consistent with the Uhrig report’s best practice principles that boards have from six to nine members. The assessment also recommended that consideration be given to the establishment of a single board for the CSS, the PSS and the PSSap.

The bill therefore transfers the powers and functions of the CSS board to the PSS board, which is renamed as the Australian Reward Investment Alliance, and abolishes the CSS board. The Australian Reward Investment Alliance is to comprise seven members, giving it the same membership as the CSS board and two more than the current PSS board. This reflects the recommendations of the Uhrig assessment and the board’s broadened role as the trustee of the three superannuation schemes.

As a transitional measure, the two members of the CSS board who are not members of the PSS board will fill the two additional positions on the Australian Reward Investment Alliance. The bill includes consequential and transitional provisions to ensure that any references to the CSS board and the PSS board in any act, delegated legislation or relevant documents, for example insurance contracts, can be read as referring to the Australian Reward Investment Alliance. The seamless transfer of the assets and liabilities of the CSS board to the Australian Reward Investment Alliance is also provided for in the bill.

The consolidation of the governance arrangements for the CSS, the PSS and the PSSap under one board will provide significant opportunities for efficiencies in the management of the CSS, the PSS and the PSSap.

It will also offer an opportunity for the board to adopt one investment mechanism for the ongoing management and investment of the three funds, which would assist in its management of the CSS. This is particularly significant for the CSS because it is a closed scheme with a decreasing contribution base where net benefit payments exceed contributions received.

The bill will modify the application of the Income Tax Assessment Act 1997 to provide for the effective deferral of any capital gains tax liability that would otherwise result from the pooling of assets of the CSS fund with those of the PSS and the PSSap funds already pooled in the PSS Investments Trust. The provision of the capital gains tax rollover reflects the essentially involuntary nature of the transaction.

I commend the bill to the House.

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