Submission to the Review of Indexation Arrangements in Australian ...

More documents

Recommendations

Info

Impact on notional employer contribution rates (NECR) Changing the current CPI indexation methodology would increase the NECR of the civilian and military superannuation schemes as set out in Table 9. Table 9: Impact on the NECR Relative to the figures quoted in the 2005 Long Term Cost Reports (LTCR) for the civilian and military superannuation schemes, the NECR under the alternative indexation methodologies would increase to the following (note, the rates are inclusive of employer productivity contributions): NECR (% of Superannuation Salaries) CSS PSS DFRDB MSBS 2005 LTCR 28.2% 15.6% 33.5% 24.7% Aligning CPI indexation methodology with Age Pension methodology Higher of CPI or MTAWE 34.8% 19.7% 41.9% 33.2% 38.1% 21.2% 46.3% 36.8% Source: Actuarial advice received by the Department of Finance and Deregulation and the Department of Defence. Page 22 of 28
Australian Government Superannuation Schemes Australian Government civilian superannuation arrangements Attachment A The Australian Government has, since 1922, provided its civilian employees with superannuation benefits as part of their terms and conditions of employment. The schemes which provide superannuation in the form of defined benefits are: • The first Commonwealth public sector scheme was the scheme established under the Superannuation Act 1922 (1922 Scheme). 33 It provided a defined benefit pension scheme and an accumulation Provident Fund. The scheme was closed to new members in 1976 and contributors were transferred to the CSS. • The Papua New Guinea (Staffing Assistance) (Superannuation) Regulations (PNG Scheme) which provides retirement benefits for employees of the administration of the Territory of Papua and New Guinea. The scheme was closed to new members in 1976. • The Commonwealth Superannuation Scheme (CSS), a hybrid accumulation / defined benefit scheme, which was established under the Superannuation Act 1976. The scheme was closed to new members from 1 July 1990. • The Public Sector Superannuation Scheme (PSS), established by the Superannuation Act 1990, and the Trust Deed and Rules under that Act, which commenced on 1 July 1990. The scheme was closed to new members from 1 July 2005. The CSS and the PSS are both partially unfunded schemes. They provide benefits that satisfy a participating employer’s 34 superannuation guarantee obligations and are regulated superannuation schemes for the purposes of the Superannuation Industry (Supervision) Act 1993 and associated Regulations. Australian Government employees who were not members of the CSS and the PSS schemes received employer provided superannuation either: • as a member of a funded superannuation scheme provided by the employer, such as Australia Post; or • under arrangements included in the Superannuation (Productivity Benefit) Act 1988 (the PB Act). The PB Act, which was established on 1 July 1988 and closed on 30 June 2005, ensured that other persons employed by the Australian 33 Entry to the pension scheme required employees to pass a medical test after which members paid compulsory contributions, which increased with the term of the membership. Those who had a medical impairment were excluded from the pension scheme and became members of the Provident Account, on payment of compulsory contributions of 5% of salary. 34 Participating employers are Australian Government Departments and agencies that are part of the Commonwealth, as well as authorised bodies that are not legally part of the Commonwealth such as Commonwealth authorities under the Commonwealth Authorities and Companies Act 1997. Page 23 of 28
Page 1 and 2: SUBMISSION TO THE REVIEW OF INDEXAT
Page 3 and 4: Executive Summary The Department of
Page 5 and 6: Chapter 1 - The Occupational Nature
Page 7 and 8: Chapter 2 - The Form of Benefits Ge
Page 9 and 10: Chapter 3 - The Value of Benefits S
Page 11 and 12: eceiving a pension from the CSS and
Page 13 and 14: 15 years membership in the PSS, the
Page 15 and 16: Chapter 4 -Comparison with State an
Page 17 and 18: Income from Australian Government c
Page 19 and 20: Chapter 6 - The cost to the Governm
Page 21: For example, analysis by the Depart
Page 25 and 26: • Parliamentarians who commenced
Page 27 and 28: Explanation of Costs Attachment C I

Submission to the Review of Indexation Arrangements in Australian ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?