Parliamentary Superannuation Regulations 2018

Non‑member spouse. This is a person who is entitled to a share of a parliamentary superannuation interest following the breakdown of a marriage or de facto relationship, as determined under the family law provisions of the Parliamentary Superannuation Act 1974. The regulations treat the non‑member spouse as a separate beneficiary with limited rights to choose how the interest is taken. The spouse may elect either to receive an associate pension for life or to commute the interest to a lump sum, but must make that election within three months of being notified by the Board. The regulations do not allow the non‑member spouse to retain the interest in the Fund as a deferred benefit; the interest must be cashed out or converted to a pension immediately.

Associate pension. This is a lifetime pension paid to the non‑member spouse, calculated under regulation 8 using a formula that compares conversion factors for the member spouse and the non‑member spouse, both interpolated from the tables in Schedule 1. The formula produces an amount AP = P × (Mx+m / Ny+n), where P is the non‑member spouse’s share of the pension. Because the conversion factors in Schedule 1 vary by the gender and age of each spouse and by the type of pension interest (e.g. ordinary pension, spouse pension, children’s pension), the associate pension amount can differ materially from the member spouse’s benefit. The regulation does not guarantee any minimum amount; it is purely mechanical.

Commutation factors. Regulation 7 provides a single table that applies both to non‑member spouses electing a lump sum and to legal representatives of deceased non‑member spouses who wish to commute a pension the deceased was receiving or entitled to receive. The factor is the lump sum amount per dollar of annual pension commuted, and it declines steeply with the member spouse’s age (not the non‑member spouse’s age). At age 60 or under the factor is $10.00, meaning $10,000 lump sum for each $1,000 annual pension. By age 85-86 it drops to $3.90, and at age 99-100 it reaches zero. This design creates a strong incentive to commute early, because delay sharply reduces the lump sum value. The table uses linear interpolation within each age band (e.g. 60-61: $10.00-$9.90), so the precise factor depends on completed years and months.

PSS 3 member. This refers to a member of Parliament who joined the parliamentary superannuation scheme in the third division (PSS 3), which is a defined contribution or accumulation style arrangement (in contrast to earlier defined benefit divisions). PSS 3 members may make additional contributions (prescribed at $50) and may also elect to take out voluntary invalidity/death insurance under section 36 of the Act.

Salary sacrifice payment. For the purposes of the additional insurance regime, a salary sacrifice payment is a payment made into the PSS 3 - Government Contributions Division of the Fund under section 14C(2) of the Act. Regulation 11(2) makes it clear that a member cannot elect voluntary invalidity/death insurance unless the member also elects to salary sacrifice an amount sufficient to cover the premiums plus any administration fees. This is a mandatory link: the insurance can only be funded through pre‑tax salary sacrifice, not through after‑tax contributions.

Operative time. This term is used in regulation 6 but is not defined in the regulations. It is a defined term in the Parliamentary Superannuation Act 1974 (likely the time when the splitting instrument takes effect under family law). The regulations rely on the Act’s definition without repeating it.

The regulations directly affect four groups. First, PSS 3 members of the South Australian Parliament. For them the regulations set the amount of additional contributions they may make ($50, though the Act uses words such as “prescribed amount” and the regulation does not say “maximum” or “minimum”; a plain reading suggests $50 is the prescribed amount, presumably the amount that triggers a Government contribution or that counts for some purpose under the Act). The regulations also require that any additional invalidity/death insurance be funded exclusively through salary sacrifice, so a member who wants such insurance must already have a salary sacrifice arrangement in place and must keep the sacrifice amount high enough to cover the premiums. Members who leave Parliament to take up a prescribed office or judicial position fall under regulation 5, which may affect how their superannuation is treated (section 19 of the Act must be consulted for the precise effect). The regulations do not themselves impose a penalty for leaving Parliament for these roles, but they ensure those roles are captured by the Act’s provisions.

Second, non‑member spouses of members. A non‑member spouse who obtains a superannuation splitting order must deal with the scheme within fixed timeframes. The spouse cannot keep the interest in the Parliamentary Superannuation Fund; it must be either taken as a lump sum (via commutation) or as an associate pension. The commutation table means that if the member spouse is older, the lump sum available is smaller. The spouse also must provide personal details including date of birth and bank account before payment can start. If the spouse does not elect within three months, the regulations do not say what happens, but under the Act the Board may roll over the interest to the Southern State Superannuation Fund (the Triple S fund), and the spouse then becomes a member of that fund. Regulation 9(2) requires the Board to notify the spouse of the rollover and provide a membership identification number.

Third, legal representatives of a deceased non‑member spouse. If a non‑member spouse dies while entitled to or in receipt of a pension (other than an associate pension), the legal representative may elect to commute the pension to a lump sum for the estate, but only within six months of the spouse’s death. The same commutation factors apply, based on the member spouse’s age at the time of commutation.

Fourth, the Board (presumably the Parliamentary Superannuation Board) and the Triple S Board (the South Australian Superannuation Board). The regulations impose duties on the Board to split pensions within 14 days of receiving a splitting instrument, to notify non‑member spouses of their rights, to calculate associate pensions using the prescribed formula, and to transfer salary sacrifice amounts for insurance to the Triple S scheme. The regulations also require the Board to keep members informed about adjustments to their interests.

The indirect effects fall on the taxpayer, because the parliamentary superannuation scheme is largely taxpayer‑funded. Any increase in lump sum payments or insurance claims flows to the public purse. The regulations do not contain cost caps or actuarial certification requirements, so the financial risk of commutation factors or associate pension calculations is not addressed here.

The regulations create a mixture of duties (mostly on the Board) and rights (mostly for spouses and members) that are constrained by strict time limits.

Duty to provide notice. Under regulation 9, when a non‑member spouse interest arises (presumably after a splitting instrument is served), the Board must give written notice within an unspecified time (the Act would govern when the right arises). The notice must advise the spouse of the option to elect, the consequences of failing to elect within 28 days, the value of the interest, and the basis of adjustments. The notice must also state that the interest cannot be retained in the Fund. This is a mandatory information duty; failure to comply may give the spouse grounds for an extension, but the regulations do not say so.

Right of election and deadline. The non‑member spouse has a right to elect either lump sum commutation or associate pension, but must do so within three months of the operative time (regulation 6(1)). If the spouse dies, the legal representative has six months from death to elect commutation (regulation 6(2)). These are absolute deadlines; the regulations give no power to extend them. Missing the deadline likely means the default procedure under the Act applies (rollover to Triple S or payment of pension as determined by the Board).

Right to information. The spouse has the right to be told the value of the interest and the basis of adjustments. However, the spouse is also obliged to provide personal details (name, address, date of birth, bank account) and any other documents the Board requests before payment can begin (regulation 10(b)). This is a condition precedent: no details, no pension.

Duty to split within 14 days. Regulation 10(a)(i) requires the Board to split the relevant pension within 14 days of receiving the splitting instrument. This is an administrative deadline. If the Board misses it, there is no stated consequence, but the spouse could potentially seek judicial review or compensation for delay.

Duty to roll over default interests. If the spouse does not elect within 28 days of the notice (not the operative time), the Act apparently provides for rollover to the Triple S fund. Regulation 9(2) then requires the Board to notify the spouse of the rollover within 14 days and provide a membership identification number and any other helpful information.

Salary sacrifice requirement for insurance. A PSS 3 member has a right to apply for additional invalidity/death insurance, but only if they have a current salary sacrifice election that covers the premiums. The regulations do not set a maximum amount of insurance, but the Triple S Board’s acceptance of the application is required. Once accepted, the Board must transfer funds from the member’s salary sacrifice payments to the Triple S scheme to maintain a balance from which premiums can be charged. The member cannot pay premiums directly; the mechanism is entirely via salary sacrifice.

No right to retain interest in Fund. A non‑member spouse cannot keep the interest in the Parliamentary Superannuation Fund. This is a significant restriction on choice. The spouse must either take a lump sum (foregoing future growth and survivor benefits) or convert to an associate pension (which is calculated using gender‑ and age‑based factors that may not reflect market annuity rates). The effect is to force a payout or a conversion, which may have unintended tax consequences or family law implications.

The regulations themselves do not create penalties for breach. They are entirely procedural and do not include penalty units, infringement notices, or criminal offences. Instead, enforcement is indirect. If a non‑member spouse fails to elect within the prescribed time, the consequence is that the interest is not paid in the manner chosen; the default mechanism under the Act (rollover to Triple S or payment as determined by the Board) takes effect. That is a loss of a right, not a penalty.

If the Board fails to split a pension within 14 days, or fails to give proper notice, the non‑member spouse may be entitled to seek a remedy under administrative law (e.g. an order compelling the Board to act, or a claim for interest for late payment). The regulations do not specify any statutory compensation for delay.

For PSS 3 members, the only enforcement lever is that the Triple S Board must accept the application for additional insurance. If the member does not maintain a sufficient salary sacrifice amount, the premiums cannot be paid and the insurance would presumably lapse. The regulations do not impose a fine for non‑compliance by the member; instead the scheme simply does not function.

The parliamentary superannuation scheme is a public sector scheme, so the Board is subject to the usual public sector accountability mechanisms, including audit and ministerial oversight. But the regulations do not add any specific enforcement powers.

The commutation factors table is mandatory. There is no discretion to pay a higher lump sum. If the Board pays a commutation using the wrong factor, it could be required to rectify the error, but the regulations do not provide for recovery of overpayments or interest on underpayments.

The revocation of the 2003 regulations (Schedule 2) means that the earlier regime no longer applies. Any proceedings or rights that arose under the 2003 regulations are not saved by these regulations, so they would rely on general savings provisions in the Acts Interpretation Act 1915 (SA). That could create uncertainty if a splitting order was made just before 2 August 2018 but the election or calculation fell after.

The regulations sit under the Parliamentary Superannuation Act 1974 (SA). That Act is the primary source of the scheme’s rules, benefit types, contribution rates, and governance. The regulations fill in details that the Act left to prescription. Consequently, the regulations can only be understood in the context of the Act. For example, the concept of “operative time” for a non‑member spouse’s right comes from the Act, and the regulations do not define it. Similarly, the “splitting instrument” referred to in regulation 10 is a family law instrument under the Act, which in turn incorporates the Family Law Act 1975 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth). The regulations are thus a small piece of a larger federal‑state legislative interaction concerning superannuation splitting.

The regulations also directly incorporate the Southern State Superannuation Act 2009 (SA). Regulation 11 provides the mechanism for transferring funds from the parliamentary scheme to the Triple S scheme for additional invalidity/death insurance. The definition of “additional invalidity/death insurance” in regulation 11(4) links to insurance under the Triple S Act. This means the terms of that insurance, including eligibility, claim procedures, and benefit amounts, are governed by the Triple S scheme, not by these regulations. The regulations only handle the funding side.

The prescribed offices and positions listed in regulation 5 interact with section 19 of the Act, which likely deals with the effect on benefits when a member takes up one of those roles. The regulation includes federal Parliament, other state parliaments (except South Australia), and judicial offices under Commonwealth law or the Judges’ Pensions Act 1971. This means the Act will treat a South Australian MP who becomes a federal MP or a judge in a prescribed manner (probably as not triggering a resignation benefit, or as continuing membership). The interaction with the Judges’ Pensions Act is particularly relevant because a South Australian judge covered by that Act is treated as if they held a prescribed office, which may affect their parliamentary superannuation.

The commutation factor table in regulation 7 interacts with tax law. A lump sum paid to a non‑member spouse may be a “superannuation benefit” under the Income Tax Assessment Act 1997 (Cth). The regulations do not address tax treatment, but the tax consequences of commuting at a factor that produces a larger lump sum relative to the pension foregone will matter. Because the factor decreases with the member spouse’s age, the tax‑free component and taxable component of the lump sum may vary.

For the associate pension calculation in regulation 8, the conversion factors in Schedule 1 are gender‑based. This gives rise to potential interaction with the Sex Discrimination Act 1984 (Cth) and state equal opportunity laws. Using different factors for male and female member spouses may be justifiable as actuarial differences in life expectancy, but it creates an administrative burden to verify gender and may be challenged in certain circumstances.

The regulations were made on 2 August 2018 and published in the South Australian Government Gazette on that date at page 3015. They came into operation on 2 August 2018, the day they were made, by virtue of regulation 2 (which states that they commence on the day they are made). This immediate commencement contrasts with regulations that allow a later start date, and it means there was no lead time for members or the Board to prepare.

The regulations revoked the Parliamentary Superannuation Regulations 2003 in their entirety (Schedule 2). The 2003 regulations had been in force for 15 years. No transitional or saving provisions appear in the 2018 regulations. This means that any matter that depended on the 2003 regulations (e.g. a previous election, a prescribed office list, an insurance arrangement) is governed by the 2018 regulations from 2 August 2018, unless the Acts Interpretation Act 1915 preserves rights that vested before the repeal. The legislative history note in the regulations does not include any amending regulations; the text appears to be the original as made, with no subsequent amendments up to the date of the user‑supplied source.

The table in the legislative history shows only the principal regulations. No amendments are listed. That may mean the regulations are still in their original form, but it is not possible to confirm from this source alone. The scheme’s administrator would need to check the current version on the South Australian legislation website.

The source text does not mention any litigation. No court cases are cited in the regulations or in the legislative history. This is not surprising; subordinate legislation rarely attracts direct litigation. However, the underlying Act, the Parliamentary Superannuation Act 1974, has been the subject of some reported decisions in South Australian courts concerning benefit interpretation and board decisions. The regulations themselves would be challenged only if they were beyond the power conferred by the Act (ultra vires) or if they were applied incorrectly in a particular case.

It is notable that the commutation factors table provides for a factor of $0.00 at age 99-100. That is a mathematical rounding to zero, effectively meaning that a non‑member spouse whose member spouse is aged 99 or over would receive nothing upon commutation. This could be challenged as capricious or confiscatory, but no case law is cited. Similarly, the use of gender‑based conversion factors in Schedule 1 could be litigated under discrimination law, though no such case is reported in the source. The absence of litigation may indicate that the scheme is small and that disputes are resolved internally.

Several features of the regulations are traps for the unwary. The most significant is the consequence of missing the election deadline. Regulation 6 gives a non‑member spouse three months from the operative time to elect commutation or associate pension. If the spouse does nothing, the Act (through section 23H) requires the Board to roll over the interest to the Southern State Superannuation Fund within 28 days of notice. The spouse then becomes a member of Triple S and loses the ability to take the benefit as an associate pension under the parliamentary scheme. That is a permanent loss of a valuable right, because the associate pension is for life and may have better terms than the rollover balance.

Another trap is that the commutation factor depends on the member spouse’s age, not the non‑member spouse’s age. A younger non‑member spouse married to an older member spouse will get a smaller lump sum than if the member were younger. This is counterintuitive; non‑member spouses may expect the factor to be based on their own age. The factor also decreases sharply: at age 70, the factor is $7.90 to $8.20 per $1 of pension; by age 80 it drops to $5.30 to $5.02. A spouse who delays electing commutation while the member spouse ages will see the lump sum shrink. The regulation does not fix the conversion date; arguably the operative time is the trigger, but the commutation factor is calculated “at the time of commutation” (regulation 7 heading), so the actual age of the member spouse when the election is processed matters.

A third trap: the associate pension formula uses gender‑based factors. The Board will need to know the gender of both the member spouse and the non‑member spouse. If either spouse does not identify as male or female, or if the gender is not recorded, the formula cannot be applied as written. The regulation does not provide an alternative. Also, the factors in Schedule 1 are not reproduced in the user‑provided source, so it is impossible to verify the calculations from this document alone.

For PSS 3 members, the salary sacrifice requirement for insurance is mandatory. A member cannot pay for additional invalidity/death insurance out of pocket; they must establish a salary sacrifice arrangement and keep it large enough. If the member ceases salary sacrifice (e.g. because of a change in remuneration or because they take unpaid leave), the insurance may lapse because there are no funds to transfer. The regulation does not provide a grace period or an alternative payment method.

Time limits are also traps: the 28‑day period in regulation 9(1)(b)(i) for the spouse to respond to the Board’s notice is not the same as the three‑month election period. The notice must advise the spouse of the consequences of failing to elect within 28 days, but the actual election period is three months. This mismatch could confuse a spouse who thinks they have 28 days from notice, when in fact they have three months from the operative time (which may be earlier than the notice). The Board’s notice may be sent after the operative time, so the spouse could have less than 28 days remaining.

Finally, the revocation without savings means that if a splitting order or insurance arrangement was partially completed under the 2003 regulations, the 2018 regulations apply from 2 August 2018. The Board must apply the new commutation factors and procedures even if the parties relied on the old regime. This creates transitional uncertainty for matters in progress.

Compliance depends on which party is involved.

For a non‑member spouse who receives a splitting instrument and a notice from the Board, the steps are:

1. Read the Board’s notice carefully. It will state the value of the interest, the basis of adjustments, and the options. Note that the interest cannot stay in the Fund.
2. Within three months of the operative time, decide whether to take the interest as a lump sum (by commuting) or as an associate pension. If taking a lump sum, use regulation 7 to estimate the amount based on the member spouse’s age at the expected commutation date. If taking a pension, note that the associate pension is for life and uses gender‑based conversion factors - you cannot predict the exact amount without the Schedule 1 factors.
3. Give the Board written notice of the election. For commutation, the notice must be within three months of the operative time (regulation 6(1)). For associate pension, the notice must be within three months of the date the Board notified you of the right (regulation 8(1)) - these two deadlines may differ.
4. If you elect a pension, you must provide your name, address, date of birth, and bank account details before payment can commence. You must also provide any other documents the Board requests.
5. If you fail to elect, the Board will roll the interest into the Southern State Superannuation Fund within 14 days of the missed deadline. The Board must then notify you and give you a membership identification number. You can then deal with Triple S as a member.
6. If the non‑member spouse dies before receiving a pension (other than an associate pension), the legal representative must elect commutation within six months of the spouse’s death. The same commutation factors apply.

For a PSS 3 member who wants additional invalidity/death insurance:

1. First, ensure you have a current salary sacrifice election under section 14C(2) of the Act that covers the estimated cost of insurance premiums plus any administration fees. The regulations require that the salary sacrifice amount be sufficient to maintain a balance in the Triple S account.
2. Apply for the insurance through the Triple S scheme. The Triple S Board must accept the application.
3. Once accepted, the Parliamentary Superannuation Board will transfer amounts from your salary sacrifice payments to the Triple S Board to credit to your account. You cannot pay directly.
4. Monitor your salary sacrifice amount. If it drops below the required level, the insurance may lapse because no premiums can be debited.
5. Note that the insurance is “additional” - it is voluntary, but the funding mechanism is not flexible.

For the Board, compliance requires:

1. When a splitting instrument is served, split the pension within 14 days (regulation 10).
2. Give written notice to the non‑member spouse within whatever timeframe the Act requires (the regulations do not specify a maximum, but it must be done before the spouse can elect).
3. Include in the notice the specific information listed in regulation 9: the election option and the consequences of inaction within 28 days, the interest value, the basis of adjustments, and the statement that the interest cannot be retained.
4. If the spouse elects an associate pension, calculate the amount using regulation 8 and Schedule 1. This requires knowing the ages and genders of both spouses and the type of pension interest.
5. If the spouse does not elect, roll over the interest to Triple S within 14 days of the expiry of the election period and notify the spouse with the identification number.
6. For additional insurance, transfer salary sacrifice amounts to the Triple S Board as required, and debit the member’s Government contribution account.