There are specific exemptions for superannuation in existing Australian anti-discrimination law. The Sex Discrimination Act, the Disability Discrimination Act and all State and Territory anti-discrimination laws specifically exempt discrimination in relation to aspects of the
provision and administration of superannuation.
Existing anti-discrimination laws provide exemptions for age discrimination that:
• arises from the application of a standard in force under specific superannuation laws (eg, the Superannuation Industry (Supervision) Act 1993) or other relevant Commonwealth laws, or
• is reasonably based on actuarial or statistical data, and/or other factors on which it is reasonable to rely.
The detail of the exemptions for superannuation in Commonwealth and State anti-discrimination laws varies.
6.2.1. Commonwealth superannuation requirements
Issues arise about the following age-based criteria in superannuation:
• age limits for personal contributions to superannuation
• work tests for individuals 65 years and over to make personal contributions
• age limits for payment of the superannuation guarantee
• age limits for access to superannuation, and
• rules for compulsory cashing of benefits.
Age-related criteria are central to the Government’s policies to promote better incomes in retirement through superannuation and the age pension, to ensure that superannuation is
superannuation are not abused.
Superannuation and related social security and taxation laws are finely balanced and constantly under review. The Government will continue to monitor the superannuation system to ensure that it meets the needs of an ageing population. The Senate Select Committee on
Superannuation is currently conducting an inquiry into superannuation and standards of living in retirement.
In consultations, a range of issues and concerns was raised. Groups representing older people noted that many concerns and inquiries from older people are about superannuation. Some individuals, especially those with broken workforce participation, face difficulties in accumulating enough superannuation for their retirement under the current superannuation laws and policies. There have been concerns expressed about the current age limits for personal contributions to superannuation. In relation to this point, the issue of the appropriate cut-off age for contributions is one that the Government keeps under review and the
Government has recently relaxed the cut-off age considerably. From 1 July 2002, the upper limit for personal contributions by working members of superannuation funds has been raised to 75. This follows earlier action by the Government in 1997, which raised the maximum age for contributions to 70 years. These initiatives combine to show the Government’s willingness to adapt to the needs of an ageing population. The Government has demonstrated its flexibility by adapting the superannuation system to reflect changes in society.
Although organisations consulted, including those representing older and younger people, noted there were some concerns about aspects of the age criteria in the Commonwealth
superannuation regime, there was broad agreement that these issues are best addressed through the ongoing review and adaptation of the superannuation system, rather than through age discrimination legislation.
Bearing in mind that the superannuation system is constantly under review, the Government proposes that the age discrimination legislation should exempt superannuation schemes operating under Commonwealth superannuation and related legislation.
The manner in which this outcome is achieved is a drafting issue. There are two key approaches for achieving this outcome. The first approach would be to list all the relevant legislation in an exemption in the proposed new legislation.10 One problem with this approach would be that there are many and often changing pieces of legislation that would need to be listed. Another approach would be to exempt discriminatory actions need to comply with, or obtain a benefit of, or avoid a penalty under, any other Act of the Commonwealth.11 This approach would avoid the risk of the exemption becoming out of date due to changes in the relevant superannuation legislation.
It should be noted that superannuation includes Retirement Savings Accounts.
10 See section 49ZYS(1)(a) of the NSW Act, which lists relevant superannuation legislation that applies in NSW.
Specific legislative provisions referred to in this section are at Attachment D.
11 See section 49ZYS(1)(b) of the NSW Act.
6.2.2. Exempt public sector superannuation schemes
Not all superannuation schemes are regulated under Commonwealth superannuation
legislation. In particular, Exempt Public Sector Superannuation Schemes are established and operated by State Governments and are exempt from the requirements of the Superannuation Industry Supervision Act. While exempt from the Commonwealth regulatory environment, the schemes agree to adhere to the principles of Commonwealth retirement income policy.
The Government proposes that the superannuation exemption should extend to superannuation schemes not regulated under Commonwealth superannuation legislation, such as Exempt Public Sector Superannuation Schemes which agree to adhere to the principles of
Commonwealth superannuation policy.
6.2.3. Commonwealth superannuation schemes
The proposed exemption for superannuation will need to cover legislation that establishes Commonwealth superannuation schemes (like the Public Sector Superannuation Scheme (PSS) and the Commonwealth Superannuation Scheme (CSS)).
6.2.4. ‘Actuarial or statistical data’, ‘other data’ and ‘any other relevant factors’
Distinctions based on age also occur in relation to data which is used in determining life insurance policies and pension payments linked to superannuation.
6.2.4.1. Exemption for actuarial or statistical data etc
Consideration has been given to the scope of a superannuation exemption for:
• actuarial or statistical data,
• other data, and
• any other relevant factors.
Useful models are particularly found in the relevant exemptions in the NSW
Anti-Discrimination Act and the Disability Anti-Discrimination Act. In consultations, representatives of the superannuation industry supported an exemption similar to that provided in the Disability Discrimination Act.
Both the NSW Act and the Disability Discrimination Act include exemptions for discrimination based on actuarial or statistical data and any other relevant factors.
Additionally, the NSW Act provides an exemption for discrimination on the basis of ‘other data’. It was noted in consultations that ‘other data’ may not be needed as a separate ground if
‘other relevant factors’ is a broad enough expression to encompass ‘other data’. The Attorney-General’s Department sought advice from the Australian Government Solicitor (AGS) about whether the expression ‘other data’ is encompassed by the expression ‘other relevant factors’.
The AGS advised that other data is encompassed by the expression ‘other relevant factors’.
The Government proposes that the legislation include an exemption for superannuation to cover age discrimination based on statistical or actuarial data on which it is reasonable to rely, and other relevant factors (which includes ‘other data’).
The NSW Anti-Discrimination Act12 requires that the exemption for discrimination based on
‘other data’ or ‘any other relevant factors’ is available only if the sources on which the data is based and those relevant factors are disclosed to the Anti-Discrimination Tribunal.
In consultations, HREOC advised that, although the Disability Discrimination Act does not impose such a requirement, in practice respondents in Disability Discrimination Act
complaints have to make available the data or other relevant factors on which they base discriminatory actions, if they wish to rely on the data to come within the superannuation exemption in section 46 of the Disability Discrimination Act. As this happens as a matter of course under the superannuation exemption in the Disability Discrimination Act, HREOC considered that there was no need to include a provision similar to section 49ZYS(2) of the NSW Anti-Discrimination Act in the proposed age discrimination legislation.
6.2.5. Closed superannuation schemes
In consultations, it was proposed that there should be a complete exemption for closed
superannuation schemes and that this exemption should be ongoing. However it was noted that closed schemes might not need to be specifically exempted as they would be covered by the general exemption for superannuation schemes operating under Commonwealth
superannuation and related legislation. The Attorney-General’s Department will work with Treasury to ensure that the proposed exemption covers all relevant closed schemes.
6.2.6. Superannuation—issues for Indigenous people and people with disabilities
The Aboriginal and Torres Strait Islander Commission (ATSIC) has raised issues about the shorter life expectancy of Indigenous Australians compared with other Australians and the implications of this for access to superannuation.
ATSIC noted during the consultative process that it would raise with Treasury the concerns about access of Indigenous Australians to superannuation, to discuss the best way to deal with the issue.
Similar issues may also arise about people with some disabilities.