Superannuation Act 1990 (Division of Costs) Determination (No. 2) 1993

The Determination rests on a small set of tightly defined concepts and textual allocations. Understanding it requires attending to the three definitions in s 3(1), the cross-reference provision in s 3(2), and the allocations set out in s 4 and the two Schedules.

• "Costs" (s 3(1)). The instrument defines "costs" expansively as the costs of the administration of the Act and the Deed, and it expressly includes costs "of and incidental to the management of the Fund by CSC and the investment of its money." This definition operates at two levels: it both describes the universe of expenditure that may fall under the Determination and highlights management and investment costs as a subset. The Schedules then specify which parts of that universe are to be borne by which party.

• "CSC" (s 3(1)). The Determination identifies CSC as the Commonwealth Superannuation Corporation, and connects that identity to an external statute: CSC is "the body corporate continued in existence by section 4 of the Governance of Australian Government Superannuation Schemes Act 2011." The Determination therefore ties its cost allocation to a particular corporate actor whose statutory form and functions are established elsewhere.

• Importation of external definitions (s 3(2)). Section 3(2) makes words and expressions defined in the Act and the Trust Deed have the same meaning in the Determination. Consequently, substantive application of the Determination depends on definitions found in those documents. For example, the scope of "the Deed" or of particular categories of administration costs may be clarified only by consulting the Trust Deed and the Act.

• Division of costs (s 4 and Schedules 1-2). Section 4 is the operative allocation clause: Costs in Schedule 1 are to be paid by CSC from the Fund; Costs in Schedule 2 are to be paid by the Commonwealth. Schedule 1 is simply stated: "Those costs of and incidental to the management of the Fund by CSC and the investment of its money." Schedule 2 is: "The costs of the administration of the Act and of the Trust Deed other than those costs referred to in Schedule 1." The structure is categorical: one broad category debited to the Fund, another residual category borne by the Commonwealth.

• Commencement and amendment. The Determination commenced from and including 1 July 1993 (s 2). The compilation includes material showing an amendment determination dated 30 June 2011, commencing 1 July 2011 (Notes, Table of Instruments). The Table of Amendments records that s 1 and s 3 were repealed and substituted in 2011, s 4 was amended, and both Schedule headings and Schedule 1 were amended. The Determination therefore has an amendment history recorded in the Notes.

The main concepts therefore combine definitional importation with a two-category allocation. Practical application requires mapping concrete transactions and budget items to either the Schedule 1 formulation (management and investment costs) or the Schedule 2 residual category (other administration of the Act and Trust Deed), using the Act and Trust Deed definitions the Determination imports.

The Determination identifies three principal actors and, by implication, several affected sets of interest-holders.

• Commonwealth Superannuation Corporation (CSC). The instrument expressly charges CSC with paying certain costs from the Fund (s 4; Schedule 1). CSC is defined as the body corporate continued in existence by s 4 of the Governance of Australian Government Superannuation Schemes Act 2011 (s 3(1)). The obligations in the Determination therefore affect CSC’s responsibilities to the Fund: CSC must ensure Fund accounting and cashflow accommodate the management and investment costs allocated to the Fund.

• The Commonwealth. Schedule 2 sets out costs to be paid by the Commonwealth (s 4). Those are the costs of the administration of the Act and of the Trust Deed other than those in Schedule 1. The Determination therefore imposes a fiscal responsibility on the Commonwealth as an entity to meet those categories of cost.

• The Fund and its members. Although the Determination does not alter legal entitlements of members, it affects who bears the economic burden of specific categories of expenditure. Costs charged to the Fund will reduce net returns available to members or otherwise be reflected in Fund accounting and reporting, because Schedule 1 requires CSC to pay those costs from the Fund (s 4; Schedule 1). Members are therefore indirectly affected by choices of expenditure allocated to the Fund.

Additional affected parties, by implication, include the administrators and service providers engaged to manage and invest Fund assets, and officials within the departments that administer the Act and the Trust Deed. The Determination establishes which principal (Fund via CSC, or the Commonwealth) remits particular payments; that allocation affects contract counterparty risk and invoicing instructions for providers of administration, investment management, custody and other services.

The Determination also interacts with the Trust Deed and the Act through s 3(2): words and expressions defined in those instruments have the same meaning here. That means parties whose rights and duties are recorded in the Act or Trust Deed are affected to the extent those definitions determine whether an item is a management/investment cost or an "administration of the Act and of the Trust Deed" cost. For example, a cost characterised in the Trust Deed as "administrative expenses" may fall within Schedule 2 if not caught by Schedule 1’s management and investment language.

Finally, the Determination implicates budget authorities and accounting functions within the Commonwealth, because it assigns costs to the Commonwealth (Schedule 2) and to the Fund (Schedule 1). Although the Determination does not set out appropriation mechanics, the allocation will determine from which ledger or appropriation particular payments are to be made.

The Determination is short and statutory in form; it imposes specific payment duties and relies on existing instruments for broader rights and duties. The operative duties are captured in s 4 and in the two Schedules.

• Duty of CSC to pay Fund-borne costs (s 4; Schedule 1). Section 4 directs that "The Costs that are described in Schedule 1 to this determination are to be paid by CSC from the Fund." Schedule 1 defines those costs as "Those costs of and incidental to the management of the Fund by CSC and the investment of its money." The duty is categorical: where a cost falls within that description, CSC is required to pay it from the Fund. The Determination does not spell out thresholds, limits, or procedural steps for execution of that duty.

• Duty of the Commonwealth to pay residual administration costs (s 4; Schedule 2). Section 4 directs that the Costs in Schedule 2 are to be paid by the Commonwealth. Schedule 2 identifies these as "The costs of the administration of the Act and of the Trust Deed other than those costs referred to in Schedule 1." This creates a complementary duty: costs of administering the Act and the Trust Deed that are not management or investment costs are to be borne by the Commonwealth.

• Rights and limits implicit via definitions (s 3(1)-(2)). The Determination grants no new property rights nor does it alter member entitlements in the Act or the Trust Deed. It does, however, import the definitions in the Act and the Trust Deed (s 3(2)), which may confer or qualify substantive rights elsewhere. For instance, if the Act or the Trust Deed defines recoverable expenses or authorises CSC to deduct certain charges from the Fund, those provisions will operate in conjunction with the Determination’s allocation.

• Procedural silence and de facto administrative discretion. The Determination does not prescribe processes for identifying, authorising, or contesting particular charges, nor does it specify accounting methods, dispute resolution between CSC and the Commonwealth, or reporting requirements. Where a particular item of expenditure may plausibly be characterised either as a management/investment cost or as another administrative cost, the Determination leaves resolution to the governing instruments, customary practice, or administrative arrangements external to the Determination. That absence creates operational discretion in accountants and administrators charged with allocating costs.

• No penalty or enforcement regime within the Determination. The instrument does not create enforcement mechanisms, sanctions or recovery procedures; it simply allocates payment responsibility. Enforcement, if required, would proceed under whatever statutory, contractual or administrative enforcement mechanisms exist in the Act, the Trust Deed, CSC’s governance arrangements, or Commonwealth financial law.

To apply these duties in practice, CSC and the Commonwealth must map concrete line items to the textual categories in Schedules 1 and 2, using the definitions from the Act and Trust Deed. The Determination imposes payment obligations once such mapping is made, but it leaves the detailed mechanics to other instruments and administrative practice.

The Determination contains no express penalties, sanctions, or enforcement procedures. Its operative provisions are allocational: s 4 prescribes who is to pay specified classes of Costs; the Schedules describe those classes. There is no clause in the Determination that prescribes consequences for non-payment, a process for charging the Fund, or an enforcement route against CSC or the Commonwealth.

Because the instrument is made under section 34 of the Act, enforcement of its allocation logically falls back on the Act, the Trust Deed and the broader Commonwealth legal and financial architecture; but the Determination itself does not set out or modify those enforcement mechanisms. Section 3(2) imports definitions from the Act and the Trust Deed, which may contain their own enforcement or remedy provisions; the Determination makes those definitions applicable but does not incorporate any procedural or sanctioning provisions from those instruments by reference.

Operational enforcement therefore depends on other instruments and administrative practices:

• Internal CSC governance and the Trust Deed. CSC’s powers and obligations under the Act and the Trust Deed will be relevant to the mechanics of debiting the Fund and ensuring management costs are paid. If the Trust Deed authorises CSC to deduct management fees from the Fund, that authority will provide the means to satisfy the Schedule 1 payments. The Determination does not, however, restate or modify any such authority.

• Commonwealth financial controls. For Schedule 2 items, payment responsibility lies with the Commonwealth. The Determination does not specify whether those payments are to be charged to particular appropriations or votes; that will follow ordinary Commonwealth financial procedures and appropriation law, none of which the Determination alters.

• Disputes and judicial review. The Determination is an administrative instrument; disputes about its application would likely be resolved by reference to the Act, the Trust Deed and administrative arrangements, and potentially by judicial review if an affected person can demonstrate standing and an arguable legal error. The Determination does not itself create rights of appeal or specify forum or procedure.

In short, the Determination prescribes allocation but is silent about enforcement and penalties. The practical enforceability of the allocation therefore depends on external legal authorities and on administrative implementation by CSC and Commonwealth financial officers.

The Determination is expressly made under s 34 of the Superannuation Act 1990; it therefore operates as an instrument subordinate to the Act. It also imports definitions from the Act and from the Trust Deed made pursuant to s 4 of the Act (s 3(2)). The text therefore creates several concrete interaction points with other legal instruments.

• Superannuation Act 1990. The Determination’s statutory powerbase is s 34 of the Act. The Act supplies definitions and substantive context for the Determination through s 3(2). That means the interpretation and application of the Determination will be shaped by the Act’s definitions of terms such as "Fund", "Trust Deed", and any other defined expressions the Determination uses by reference. Where the Act provides authority for charges against the Fund or prescribes administrative responsibilities, those provisions will operate alongside the Determination’s allocation.

• The Trust Deed. The Determination repeatedly refers to "the Deed" and expressly imports words and expressions defined in the Trust Deed (s 3(2)). The Trust Deed therefore plays a central role in resolving ambiguity: it may define categories of expenses, authorise deductions from the Fund, and provide procedural steps for charging costs or contesting deductions. The Determination allocates categories of costs but relies on the Trust Deed to flesh out whether a particular item is a management/investment cost or another form of administration cost.

• Governance of Australian Government Superannuation Schemes Act 2011. The Determination defines CSC by reference to s 4 of the Governance Act (s 3(1)). That connectivity means the statutory status, corporate form and legal powers of CSC as set out in the Governance Act are relevant to how the Determination’s allocation is operationalised. For example, CSC’s capacity to enter contracts and debit the Fund will depend on its statutory powers and any limitations in the Governance Act.

• Commonwealth financial law and appropriation framework. By assigning payment responsibility to the Commonwealth for Schedule 2 costs, the Determination interacts indirectly with the Commonwealth’s appropriation and budgetary law. The Determination does not itself appropriate funds; it simply assigns liability to the Commonwealth. Practical payment will require Commonsense compliance with appropriation requirements, public finance rules and internal accounting systems.

• Administrative and contractual arrangements. Although not a "law" in the narrow sense, the Determination’s allocations will be implemented through contractual arrangements with investment managers, custodians and administrators. Those contracts will need to reflect whether fees are to be invoiced to, and paid from, the Fund (per Schedule 1) or invoiced to the Commonwealth (per Schedule 2). The Determination does not amend those contracts but requires alignment between contractual invoicing and the statutory allocation.

Because the Determination imports definitions from other instruments and cross-references the Governance Act, its precise effect in any disputed instance depends on those external texts. The Determination functions as an allocation overlay that sits within the Act’s architecture and interacts operationally with the Trust Deed, the Governance Act and the Commonwealth’s financial and contractual systems.

The compilation includes a note and tables documenting amendments to the Determination. The original Determination was made on 25 November 1993 and commenced on 1 July 1993 (Note: Table of Instruments). The compilation also records an amendment instrument: Superannuation Act 1990 (Division of Costs) Determination No. 2 Amendment Determination 2011 (No. 1), dated 30 June 2011, with commencement 1 July 2011 (Notes, Table of Instruments).

The Table of Amendments records the following changes effected by the 2011 instrument (as described in the compilation):

• Section 1 was repealed and substituted (rs. 2011 No. 1).
• Section 3 was repealed and substituted (rs. 2011 No. 1).
• Section 4 was amended (am. 2011 No. 1).
• The heading to Schedule 1 was repealed and substituted (rs. 2011 No. 1).
• Schedule 1 was amended (am. 2011 No. 1).
• The heading to Schedule 2 was repealed and substituted (rs. 2011 No. 1).

The Notes make clear that the compilation includes amendments up to the 2011 Amendment Determination (see the front matter: "taking into account amendments up to Superannuation Act 1990 (Division of Costs) Determination No. 2 Amendment Determination 2011 (No. 1)"; and the Table of Instruments in the Notes). The compilation date is 1 July 2011 for the amended version.

The amendment history recorded in the compilation therefore shows targeted textual changes rather than structural overhaul: section-level repeals/substitutions and schedule amendments. The compilation does not include any later amendments beyond the 2011 instrument. The Notes include a structured Table of Amendments that indicates which provisions were rs. (repealed and substituted) and which were amended, but the compilation does not reproduce the prior text that was removed. The schedule of amendments in the Notes is limited to the instruments listed.

For a practitioner, the amendment history in the compilation signals that the Determination has been reviewed and revised, and it identifies the 2011 instrument as the last recorded change within this compilation. To understand the textual differences between the pre-2011 and post-2011 versions, one must compare the legislative texts of the original Determination and the 2011 Amendment Determination; the compilation notes the change but does not provide a redline within the body text beyond showing the current consolidated wording.

The Determination and the compilation materials provided contain no references to judicial decisions, tribunals, or litigation outcomes. The text does not list cases, does not reference any challenges under administrative law, and the Notes do not include a litigation history. In short, within this source there is no recorded litigation history.

That absence has practical implications for legal analysis. Where a statute or instrument has been judicially considered, courts can offer interpretive clarifications about ambiguous language, the scope of a power, or the meaning of categories such as "administration" or "management". No such judicial gloss is present in the compilation. Consequently, the Determination’s provisions must be read against their plain text and the definitions imported from the Act and the Trust Deed (s 3(2)), without the benefit of any recorded case law in this material.

From a risk-management perspective, the lack of litigation history in the source increases the importance of administrative clarity. Ambiguities about whether a particular expense is a management and investment cost (Schedule 1) or an administration cost of the Act or of the Trust Deed (Schedule 2) are unresolved by precedent in the compilation and will therefore need to be handled either by reference to the Act and Trust Deed definitions, by administrative guidance or by prospective judicial determination if a dispute arises. The Determination itself contains no dispute resolution mechanism or litigation-vesting clause.

Practitioners seeking precedential guidance would need to search external case law and administrative records beyond this compilation. Within the provided source, no litigation history is cited; the instrument stands as a textual allocation whose interpretive questions remain for administrative decision-makers or courts outside this document.

The Determination is brief but contains structural features that create potential practical pitfalls for administrators, auditors, members and counsel. The common sense of the allocations masks several issues that can generate disputes or operational friction.

1. Reliance on external definitions. Section 3(2) imports words and expressions defined in the Act and the Trust Deed. That means the meaning of the Determination depends on those external instruments. If the Trust Deed or the Act use particular terms in a non-standard way, the allocation in this Determination will follow that usage. Administrators who rely only on the Determination’s text without consulting the Act and the Trust Deed risk misclassification.

2. Broad, non-exhaustive Schedule language. Schedule 1 describes Fund-borne costs as "Those costs of and incidental to the management of the Fund by CSC and the investment of its money." That language is capacious: it may include management fees, custody costs, performance fees, transaction costs, investment consultant fees and other ancillary items, but the Determination does not itemise them. Conversely, Schedule 2 captures residual "costs of the administration of the Act and of the Trust Deed other than those costs referred to in Schedule 1." Where a cost has both an administrative and an investment character, allocation may be contested.

3. No procedural rules for allocation or accounting. The Determination assigns who pays but is silent on how to charge the Fund, including documentary authorisation, timing, caps, or monthly/annual accounting practices. Implementers must consult the Trust Deed, CSC governance rules, and Commonwealth financial instructions to operationalise the allocation.

4. Potential cashflow timing mismatch. The Determination requires CSC to pay certain costs from the Fund. If large investment fees become due and the Fund’s liquidity is constrained, CSC will need a mechanism to meet those payments. The Determination does not provide for temporary bridging funding or specify remedies for short-term shortfalls.

5. Interaction with contractual fee arrangements. Contracts with managers and custodians may be denominated to be payable by "the Fund" or by "the Commonwealth" depending on negotiation. After this Determination, invoicing must match the allocation. If contracts pre-date the Determination or its amendments, there may be a need to realign contractual payment instructions.

6. Amendment history changes may affect interpretation. The 2011 Amendment Determination amended s 1, s 3 and s 4 and Schedule 1. Implementers must be attentive to which textual formulation applies at a given time. The compilation shows that those provisions were rs. or am., but it does not show the deleted text; practitioners should confirm they are working from the consolidated, up-to-date text.

7. No enforcement language or remedies. The Determination imposes payment duties but contains no enforcement clauses. If CSC or the Commonwealth fail to pay, resolution turns on the Act, the Trust Deed and general Commonwealth financial law, not on the Determination itself.

8. Definition of CSC by reference to a separate statute. The Determination defines CSC by reference to s 4 of the Governance Act 2011. If CSC’s statutory status or powers are subsequently altered by amendment or by administrative change, the practical ability of CSC to meet Fund-borne costs may shift.

9. Member impact is indirect but real. Costs charged to the Fund reduce net returns or available assets; members may not directly see the allocation decision but will feel its effects through fees or benefits. The Determination does not require disclosure to members of the split or the items charged to the Fund versus to the Commonwealth.

Each of these "gotchas" arises from the Determination’s combination of broad categorical language, reliance on external instruments, and procedural silence. Practitioners should therefore treat the Determination as an allocation rule that requires corroboration by the Act, the Trust Deed, contracting documents and internal accounting policies.

Compliance with the Determination requires administrative alignment across legal, accounting and contracting functions. The Determination itself is short and prescriptive: it assigns two classes of costs to two payors (s 4; Schedules 1-2). Practical compliance steps follow from that allocation and from the textual importations in s 3(2).

1. Map definitions. Start by compiling the relevant definitions from the Superannuation Act 1990 and from the Trust Deed (s 3(2)). The Determination applies those definitions to determine whether a particular item falls within Schedule 1 (management and investment costs) or Schedule 2 (other administration of the Act and Trust Deed). Ensure legal counsel reviews the Act and the Trust Deed so that ambiguous terms are resolved consistently.

2. Establish an item-by-item allocation protocol. Create an internal schedule or chart that maps typical cost items to Schedule 1 or Schedule 2. For example, make a reasoned classification for fees such as investment manager fees, custody fees, transaction costs, actuarial costs, legal costs related to scheme governance, and communications expenses. Where classification is uncertain, document the rationale and the definitions relied upon.

3. Align contracts with allocation. Review service contracts to ensure invoicing instructions and payee designations match the Determination’s allocations. For existing contracts that predate the current wording, negotiate amendments or ensure internal payment processes allocate invoices correctly between the Fund and Commonwealth appropriation lines.

4. Implement accounting procedures. CSC must be able to pay Schedule 1 costs from the Fund (s 4; Schedule 1). That requires fund accounting capable of segregating Fund-borne charges, maintaining sufficient liquidity for fee payments, and reporting deductions to trustees and regulators as required by the Trust Deed and the Act. The Commonwealth’s financial controllers must likewise be prepared to accept responsibility for Schedule 2 payments.

5. Document authorisations and approvals. Because the Determination is silent on procedure, document internal authorisations for each payment charged to the Fund or to the Commonwealth. Retain contemporaneous records showing the legal basis for allocation (reference to s 4 and the relevant Schedule language and to the Act/Deed definitions used).

6. Monitor and report member-impacting costs. Even if the Determination does not require member disclosure, best practice is to track and periodically report the categories of costs debited to the Fund that affect net returns or member benefits. This supports transparency and reduces the risk of disputes.

7. Address disputes and ambiguity. Where a cost could plausibly fall into either Schedule, escalate to legal counsel and consider invoking dispute resolution mechanisms in the Trust Deed or the Act. If no such mechanism is available, record the administrative decision and its rationale, and consider seeking a formal clarification from the relevant department or legal adviser.

8. Keep abreast of amendments. The compilation shows an amendment in 2011 that altered s 1, s 3, s 4 and Schedule 1. Ensure that compliance processes reference the consolidated, current text and that any historical obligations are reconciled with the current allocation.

9. Coordinate with Commonwealth finance teams. For Schedule 2 items, establish invoicing, payment timing and budgetary treatment with the Department of Finance or other relevant agencies to ensure timely payment and proper appropriation handling.

10. Audit trail. Implement periodic internal audit to confirm that invoices have been allocated in accordance with the Determination, the Act and the Trust Deed, and that Fund assets have not been used inappropriately to meet costs that the Determination or other law allocates to the Commonwealth.

Following these steps will operationalise the Determination’s two-part allocation. The Determination does not itself prescribe procedural safeguards or reporting formats, so compliance requires resolving those issues within the Trust Deed, CSC governance frameworks and Commonwealth financial rules.