Local Government (Employee Superannuation) Regulations 2016

These regulations set the required superannuation arrangements for Western Australian local governments and their employees. They do three mechanical things.

First, they nominate a single industry superannuation scheme as the default fund that local governments must use: the industry scheme is defined in regulation 3 as Aware Super, maintained and administered under an industry scheme trust deed (regulation 3, definition of industry scheme). Regulation 4(1) requires a local government to participate in and comply with the industry scheme in respect of its employees. That obligation is subject to the exceptions described below.

Second, the regulations preserve and continue the City of Perth’s separate scheme. The City of Perth must participate in and comply with the City of Perth scheme in respect of its employees (regulation 5(1)). A person who becomes an employee of the City of Perth becomes a member of the City of Perth scheme unless the person elects to be a member of the industry scheme or a chosen fund (regulation 5(2)). The City of Perth scheme is defined in regulation 3 as the scheme established under the Local Government Act 1960 section 170C(1) governed by a specified trust deed dated 31 October 1994, as amended.

Third, the regulations set rules for when an employee chooses an alternative fund and how employer obligations are reduced. If an employee has a chosen fund for a period, the local government’s contribution obligation to the industry scheme (or the City of Perth scheme where applicable) is reduced by the amount of minimum superannuation guarantee contributions made to that chosen fund, provided those contributions were sufficient to avoid an individual superannuation guarantee shortfall (regulation 7(1)-(4)). The defined term chosen fund refers to a fund chosen by an employee under Part 3A Division 4 of the Commonwealth Superannuation Guarantee (Administration) Act 1992, and individual superannuation guarantee shortfall is defined by that Commonwealth Act (regulation 3).

The regulations also deal with City of Perth scheme members who become employees of regional local governments. A regional local government that employs a City of Perth scheme member must participate in and comply with the City of Perth scheme in respect of that employee as if the employee were its own, until the employee elects to join the industry scheme or a chosen fund (regulation 6(2)-(4)). Regulation 6(5) preserves City of Perth scheme membership on cessation of employment with the City of Perth.

Finally, the instrument repeals an earlier instrument, the Local Government (Amendment of Part VIA ‑ Employee Superannuation) Regulations 2006 (regulation 8). The compilation table records the commencement dates and the 2020 amendment to regulation 3.

In short, the regulations impose a default employer-funded route into Aware Super for local government employees, preserve the City of Perth scheme as a separate option for City of Perth employees and for certain transferred members, and reduce employer obligations where employees elect and receive minimum Commonwealth superannuation guarantee contributions into another fund.

The regulations use a small set of defined concepts and cross-references to Commonwealth and other Western Australian statutes to determine who must use which fund and how employer obligations are calculated.

Defined concepts in regulation 3

• chosen fund: a fund chosen by an employee under the Commonwealth Superannuation Guarantee (Administration) Act 1992, Part 3A Division 4. The definition imports the Commonwealth selection mechanism rather than creating a new Western Australian selection process (regulation 3).
• City of Perth scheme and City of Perth trust deed: the City of Perth scheme is the scheme established under the Local Government Act 1960 section 170C(1) and governed by the City of Perth trust deed dated 31 October 1994, as amended (regulation 3).
• employee: adopts the meaning in the Commonwealth Superannuation Industry (Supervision) Act 1993 section 15A, so the definition of who is an employee for the purposes of these regulations is determined by Commonwealth law (regulation 3).
• industry scheme and industry scheme trust deed: the industry scheme is expressly Aware Super, maintained under the industry scheme trust deed; that trust deed is the concept defined in the First State Superannuation Act 1992 (NSW) section 3 (regulation 3).
• local government: expressly includes a regional local government (regulation 3).

Mandatory participation and exceptions

• Regulation 4(1) imposes a general obligation on local governments to participate in and comply with the industry scheme in respect of its employees. This is the default rule.
• Regulation 4(2) excludes employees who, under regulation 6 or section 23 of the City of Perth Act 2016, must be covered by the City of Perth scheme.
• Regulation 4(3) clarifies that the City of Perth itself is only required to use the industry scheme for employees who are not members of the City of Perth scheme.

City of Perth default and employee choice

• Regulation 5(1) makes the City of Perth subject to the City of Perth scheme for its employees.
• Regulation 5(2) creates a default membership rule for City of Perth new employees, but allows an election by the person to join either the industry scheme (Aware Super) or a chosen fund.

Inter-governmental mobility for City of Perth scheme members

• Regulation 6 applies to any person who is a member of the City of Perth scheme and becomes an employee of a regional local government. It requires the regional local government to participate in and comply with the City of Perth scheme for that employee in the same way the City of Perth would (regulation 6(3)). This obligation ends if the employee elects to become a member of the industry scheme or a chosen fund (regulation 6(4)). Regulation 6(5) preserves membership in the City of Perth scheme despite cessation of City of Perth employment.

The regulations allocate rights and duties among a limited set of actors: local governments in Western Australia, the City of Perth, regional local governments, employees, Aware Super as the industry scheme, trustees under the City of Perth trust deed, and alternative fund providers chosen by employees.

Local governments

• Every local government is directly affected by the obligation in regulation 4(1) to participate in and comply with the industry scheme in respect of its employees. The defined term local government expressly includes regional local governments (regulation 3). The City of Perth is treated both as a local government and as the employer with a separate, pre‑existing trust arrangement (regulations 3 and 4(3)).

City of Perth and City of Perth scheme trustees

• The City of Perth is assigned a continuing duty to use and comply with the City of Perth scheme for its employees (regulation 5(1)). The City of Perth trust deed, dated 31 October 1994, governs that internal scheme and controls the City’s rights and obligations under it (regulation 3). The City of Perth trust deed and scheme administrators are therefore directly affected because the regulations preserve the scheme and direct membership and contribution flows into it in specified circumstances.

Regional local governments

• Regional local governments that participate with the City of Perth as defined in section 3.61 of the Local Government Act 1995 are affected by regulation 6. If a regional local government employs a person who is a member of the City of Perth scheme, that regional local government must take on the City of Perth scheme membership and contribution obligations for that person as if the person were its employee, until the employee elects otherwise (regulations 6(1)-(4)). That introduces a cross‑jurisdictional obligation on regional local governments to administer a scheme created by the City of Perth trust deed.

Employees

• The regulations affect employees by determining default fund membership rules and the available choices. The term employee is taken from the Commonwealth Superannuation Industry (Supervision) Act 1993 section 15A, so the population of affected persons is the set of individuals who meet that Commonwealth definition (regulation 3). For City of Perth new employees, regulation 5(2) makes membership of the City of Perth scheme the default, but it gives the employee the right to elect to be a member of the industry scheme or a chosen fund. For other local government employees, regulation 4(1) directs membership to Aware Super unless the City of Perth scheme applies under regulation 6 or City of Perth Act 2016 s23.

This section sets out the principal statutory duties and the rights or options the instrument leaves with particular actors, citing the controlling provisions.

Duties of local governments

• Participate in the industry scheme: Regulation 4(1) requires a local government to participate in and comply with the industry scheme in respect of its employees. The duty is framed as an affirmative, continuing obligation to use the industry scheme (defined as Aware Super) unless an exception applies.
• Exceptions: Regulation 4(2) excludes employees covered by regulation 6 or City of Perth Act 2016 section 23, so the duty is subject to the separate City of Perth scheme rules for those employees. Regulation 4(3) states the City of Perth itself must participate in the industry scheme only for those employees who are not members of the City of Perth scheme.

Duties of the City of Perth

• Participate in City of Perth scheme: Regulation 5(1) obliges the City of Perth to participate in and comply with the City of Perth scheme for its employees. This preserves the City’s internal scheme obligations distinct from the industry scheme.
• Default admission of new employees: Regulation 5(2) makes incoming City of Perth employees members of the City of Perth scheme unless they elect to be members of the industry scheme or a chosen fund.

Duties of regional local governments with City of Perth scheme members

• Regulation 6(3) requires a regional local government that employs a City of Perth scheme member to participate in and comply with the City of Perth scheme in respect of that employee in the same way and to the same extent as the City of Perth would be required to do if the employee were its employee. This means the regional local government must administer contributions and membership for that employee under the City of Perth trust deed until the employee elects otherwise.

Duties related to contribution reduction

• Regulation 7 sets a duty shaped as a reduction rule rather than an affirmative additional payment. If an employee has a chosen fund for a period, the employer’s required contribution to the industry scheme or City of Perth scheme is reduced by the amount of the minimum superannuation guarantee contributions made to the chosen fund for that employee during the period (regulation 7(1)-(3)). The reduction applies only where the employer has made the minimum contributions necessary to avoid an individual superannuation guarantee shortfall as defined under the Commonwealth Superannuation Guarantee (Administration) Act 1992 (regulation 7(4)).

The regulations themselves do not contain express penalty provisions, enforcement mechanisms, or administrative sanctions. The instrument sets out participation duties and contribution reduction mechanics, but it does not prescribe fines, criminal offences, civil penalties, audit procedures, or powers of inspectors. The text is silent on enforcement modalities; it does not, for example, specify monetary penalties for failure to participate, nor does it designate an enforcing agency or provide for infringement notices.

Implications of textual silence in the regulations

• Because the instrument imposes duties without providing enforcement machinery, enforcement and penalties,if any,must arise from other laws or from the terms of the relevant trust deeds, which the regulations require local governments to obey. For example, the industry scheme trust deed and the City of Perth trust deed will set trustee obligations and remedies in relation to contributions and membership, but the content and remedies in those trust deeds are not reproduced or summarised in the regulations. Regulation 3 identifies the trust instruments that govern the schemes: the industry scheme trust deed referenced in the First State Superannuation Act 1992 (NSW) section 3 for Aware Super, and the City of Perth trust deed dated 31 October 1994 for the City scheme.

• The regulations also import Commonwealth statutory concepts such as individual superannuation guarantee shortfall and the chosen fund election mechanisms by reference to the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Industry (Supervision) Act 1993 (regulation 3; regulation 7(4)). Those Commonwealth statutes include compliance, assessment, and penalty schemes for failing to meet superannuation guarantee obligations. Therefore, while these regulations do not specify local enforcement, the employer’s obligations in practice will interact with the Commonwealth enforcement regime applicable to superannuation guarantee shortfalls.

Where enforcement might be sourced externally

• Trustee remedies: The trustees of the industry scheme or the City of Perth trust may hold contractual or equitable remedies against employers under the trust deeds or normal trust law principles. The regulations place a statutory duty on local governments to participate in and comply with the relevant schemes; trustees may have rights under their deeds where contributions are not made, though those rights are not stated in the regulations.

These regulations are compact and deliberately cross‑referential; they operate by directing employer obligations into specified trust arrangements and by importing key definitional and compliance concepts from Commonwealth and other Western Australian statutes. The controlling cross‑references and their consequences are set out below.

Reference to Commonwealth superannuation statutes

• Chosen fund and SG shortfalls: The definition of chosen fund and the concept of individual superannuation guarantee shortfall are imported directly from Commonwealth law. Regulation 3 defines chosen fund as a fund chosen by an employee under Part 3A Division 4 of the Superannuation Guarantee (Administration) Act 1992 (Commonwealth). Regulation 7(4) defines the employer’s minimum contribution requirement for the purpose of the reduction mechanism as making the contributions necessary to avoid an individual superannuation guarantee shortfall as defined in section 19 of the Superannuation Guarantee (Administration) Act 1992 (Commonwealth). As a result, the calculation of what qualifies as the minimum amounts and the procedural steps for employee fund choice are governed by the Commonwealth SG Act, not by these regulations.

• Employee definition and SIS: Regulation 3 adopts the meaning of employee from section 15A of the Superannuation Industry (Supervision) Act 1993 (Commonwealth). This imports the Commonwealth test for who is an employee for superannuation purposes, which will determine which persons the local government’s obligations apply to. The importation of the SIS Act definition links these State regulations with the Commonwealth regulatory framework for superannuation.

Reference to interstate/other State statutory instruments

• Industry scheme trust deed: The definition of industry scheme trust deed relies on the First State Superannuation Act 1992 (NSW) section 3. That establishes the trust deed concept for the industry scheme (Aware Super) by reference to an interstate statute. The regulations therefore locate the industry scheme within a pre‑existing statutory trust architecture that is defined in NSW legislation, as reflected in the industry scheme trust deed.

• City of Perth Act 2016: Regulation 4(2) and regulation 5 are cross‑linked with the City of Perth Act 2016. Regulation 4(2) excludes employees for whom, under regulation 6 or the City of Perth Act 2016 section 23, a local government must participate in and comply with the City of Perth scheme. Regulation 5(2) references election rights in relation to the City of Perth’s employees. The City of Perth Act 2016 therefore supplies parallel statutory supervision of the City scheme and is integrated into the allocation of duties for City of Perth employees.

The regulations include a brief compilation table and an explicit repeal of a prior instrument. The text records the dates of initial publication and the later amendment and gives one specific amendment notation.

Original instrument and commencement

• The Local Government (Employee Superannuation) Regulations 2016 were published on 25 October 2016 and came into operation in two stages: regulations 1 and 2 commenced on the date of Gazette publication (25 October 2016), and the remainder of the regulations commenced the following day, 26 October 2016 (regulation 2 and the compilation table).

2020 amendment

• The instrument was amended by the Local Government (Employee Superannuation) Amendment Regulations 2020, recorded as SL 2020/217. The compilation table shows the 2020 instrument was published on 6 November 2020, with regulations 1 and 2 commencing that day and the rest of the regulations commencing on 3 December 2020 (compilation table entry for SL 2020/217). Regulation 3 is noted as having been amended by SL 2020/217 at r. 4. The text of the regulation as presented is the amended form.

Repeal of earlier 2006 instrument

• Regulation 8 expressly repeals the Local Government (Amendment of Part VIA ‑ Employee Superannuation) Regulations 2006. The repeal is absolute within the text, signifying replacement and consolidation of the State’s approach to local government employee superannuation in the 2016 regulations.

No other amendments recorded in the text

• The compilation table lists only the original 2016 regulations and the 2020 amendment instrument. No other amendments are included in the provided compilation. The defined terms table confirms which provisions contain definitions and where the amendments have been applied.

Implications of the amendment pattern

• The 2020 amendment specifically altered regulation 3, which contains the definitions. Changes to definitions can have substantive operational effects because the regulations import key concepts from Commonwealth and other State statutes. The amendment could reflect an update to the named industry scheme, a re‑definition of local government, or an alignment with changed Commonwealth terminology; the text here records the amendment without reproducing the earlier wording, so the current definitions are as shown.

• The repeal of the 2006 amendment regulations and the consolidated 2016 instrument, together with the later 2020 amendments, indicate a phased approach to codifying local government superannuation obligations in Western Australia. The instrument as compiled is the operative regulatory framework as of the dates listed in the compilation table.

The text provided contains no litigation history. It does not reference any court decisions, tribunal determinations, or administrative rulings that interpret or challenge the regulations, the City of Perth trust deed, or the operation of the industry scheme in this jurisdiction. The regulations do, however, import concepts and definitions from Commonwealth superannuation statutes and refer to trust deeds; litigation arising in those contexts may be relevant in practice but is not recorded in this instrument.

What the text does disclose, which affects litigation risk in practice, without providing case law, is:

• Reliance on Commonwealth definitions: Several operative points are determined by Commonwealth law. Disputes about who is an employee for the purpose of these regulations, whether an employer has made contributions sufficient to avoid an individual superannuation guarantee shortfall, or the validity of a chosen fund election will, in many instances, be resolved by reference to the Commonwealth Superannuation Guarantee (Administration) Act 1992 and the Superannuation Industry (Supervision) Act 1993. Litigation interpreting those Commonwealth statutes could be consequential for how these State regulations operate in contested situations.

• Interaction with trust deeds: The regulations require participation in and compliance with trust deeds,both the industry scheme trust deed for Aware Super and the City of Perth trust deed. Disputes over contribution obligations, membership entitlements, or trustees’ rights are typically litigated under trust law and the terms of the particular trust deed. The regulations do not supply or summarise those trust deed terms; as a result, litigation about specific operational questions will be routed into trust deed interpretation and general trust law, none of which the regulations elaborate.

• Silence on enforcement mechanisms: The absence of express State enforcement provisions in these regulations may shift enforcement and dispute resolution into either the trustees’ contractual remedies or the Commonwealth SG enforcement regime, which includes its own assessment and recovery procedures. The litigation contexts that tend to arise under superannuation law are therefore more likely to occur under the Commonwealth regime or under trustees’ remedies than under direct State regulatory sanctioning under these regulations.

Practical note for researchers and practitioners

• Because the regulations contain no litigation history, researchers looking for precedent interpreting these provisions must look to judicial decisions that interpret the Commonwealth SG and SIS Acts, trustee decisions under the named trust deeds, and any cases that address the application of State statutory directives to employer superannuation arrangements. The regulations themselves provide the statutory directives but not case law or adjudicative interpretation.

The regulations are concise but their cross‑referencing and limited procedural detail create specific practical pitfalls for employers, trustees and administrators. The following points identify concrete operational traps and legal tight spots that flow directly from the text.

1. Reduction of State scheme obligation tied to Commonwealth SG definitions

• Regulation 7 reduces the employer’s obligation to contribute to the industry scheme or City of Perth scheme by the amount of minimum SG contributions made to a chosen fund, but only where those contributions are “necessary for [the employer] to avoid incurring an individual superannuation guarantee shortfall” as defined by the Commonwealth Superannuation Guarantee (Administration) Act 1992 (regulation 7(4)). Practically, this requires employers to ensure that their payments meet the Commonwealth’s test. If an employer incorrectly treats payments as qualifying SG contributions when the Commonwealth would find an SG shortfall, the employer could incur Commonwealth liabilities despite thinking its State obligation is reduced.

2. Proof and reconciling contributions not specified

• The regulations allow a reduction but do not prescribe the documentation, reporting or certification needed to establish that the minimum SG contributions were made to a chosen fund for the period. Employers will need to retain and be able to produce evidence that they made the minimum contributions to avoid disputes with trustees or Commonwealth authorities, yet the regulation sets no form or timing for that evidence. Trustees of the industry scheme or City scheme may expect compliance but the regulations do not set standards for proof.

3. Employee selection procedure effectively governed by Commonwealth law

• The definition of chosen fund imports the Commonwealth mechanism for employee fund choice (regulation 3). Employers must therefore be able to operate within Commonwealth procedures for choice of fund. Failure to follow the Commonwealth process correctly when recording an employee’s chosen fund could affect whether the chosen fund counts for the purpose of regulation 7’s reduction.

4. City of Perth default membership with employee election

• Regulation 5(2) makes City of Perth scheme membership the default for new City of Perth employees but allows the employee to elect to join the industry scheme or a chosen fund. Employers must ensure they have a clear mechanism to offer, record and process that election at commencement of employment. Without compliant administrative processes, employers risk incorrectly treating an employee as a City of Perth scheme member or erroneously applying the reduction rules.

The regulations create a compact compliance task that combines statutory direction with administrative recordkeeping and coordination with trustees and the Commonwealth SG framework. The following checklist and steps, grounded in the regulations, outline a practicable compliance pathway.

1. Confirm applicability to your workforce

• Determine whether your organisation is a local government as defined in regulation 3. The definition expressly includes regional local governments. Identify which staff meet the definition of employee as adopted from the Superannuation Industry (Supervision) Act 1993 section 15A because that determines to whom the duties in regulations 4-7 apply (regulation 3).

2. Establish participation with the correct scheme

• Default requirement: For most local governments, regulation 4(1) requires participation in and compliance with the industry scheme, defined as Aware Super (regulation 3 and regulation 4(1)). Register as an employer with Aware Super and implement contribution processes to ensure payroll contributions are made to the industry scheme for employees unless an exception applies.
• City of Perth employers: If you are the City of Perth, you must participate in and comply with the City of Perth scheme for your employees (regulation 5(1)). However, new City employees default into the City scheme only until they elect to join the industry scheme or a chosen fund (regulation 5(2)). You must have processes to record any such election.

3. Implement employee election processes

• Chosen fund election: Because chosen fund is defined by the Commonwealth SG Act mechanism (regulation 3), implement the Commonwealth-compliant process for accepting and documenting a chosen fund election from employees. Record the date of election, the named fund, and any confirmations required under the Commonwealth rules.
• City of Perth election: For new City of Perth employees, ensure an election form and process are provided to allow the employee to choose the industry scheme or a chosen fund in accordance with regulation 5(2). Keep clear records of the election and its effective date.

4. Track and record contributions to chosen funds

• Regulation 7 reduces an employer’s obligation to the industry scheme or City of Perth scheme by the amount of minimum SG contributions made to the chosen fund for the employee for the relevant period (regulation 7(2) and (3)). To claim this reduction reliably, keep contemporaneous evidence of payments to the chosen fund that demonstrates they meet the Commonwealth definition of the minimum SG contributions needed to avoid an individual superannuation guarantee shortfall (regulation 7(4)). Document payment dates, amounts, and confirmations from the fund.