Commonwealth Superannuation Corporation Annual Report 2017–18
7. Our Superannuation Schemes
PSS
Public Sector Superannuation Scheme
Overview of PSS
PSS is a public sector scheme established on 1 July 1990 by the PSS Act. It closed to new members on 30 June 2005. PSS is a defined benefit scheme where benefits generally derive from a member and employer component.
The member component consists of member contributions and Fund earnings. The employer components comprise two parts; the first being employer productivity contributions plus Fund earnings, with the second part being the unfunded ‘benefit balance’, which is determined at the time a member exits eligible employment.
Members on retirement can usually convert 50% or more of their final benefit to a lifetime non-commutable indexed pension paid by the Australian Government.
PSS membership
Figure 6. PSS members and pensioners over five years
Note: Figures are at 30 June of each year; ‘pensioners’ represent the number of pension accounts, not the exact number of pensions (e.g. multiple recipients such as a spouse and orphan children may be paid under one account).
PSS administration
Member contributions
Contributors can contribute up to 10% of their salary for super purposes. Contributions are made from after-tax income. Contributors can also make voluntary contributions into PSSap (refer to the PSSap section for details).
Figure 7. PSS member contributions over five years
Note: This chart shows member contributions to PSS. PSS member contributions to ancillary PSSap accounts are not included in this chart.
Employer contributions
Employers pay a fortnightly contribution into PSS, which is the productivity component. The amount is based on an individual member’s super salary.
Figure 8. PSS employer contributions over five years
Benefit payments
Pensions and lump sums
Benefits in PSS are paid in most cases when a member exits the scheme at retirement. Benefits usually cannot be paid until minimum retirement age is reached and the member has permanently retired from the workforce. Pensions are usually paid to former scheme members who have exited PSS and preserved their entire benefit for payment at a later date. Pension payments are paid by the Australian Government.
Figure 9. PSS pension payments over five years
Figure 10. PSS lump sum payments over five years
Note: Lump sums are paid from the PSS fund and by the Australian Government.
Invalidity and death benefits
PSS provides partial invalidity, full invalidity and death benefits, and contributors can purchase additional death and invalidity cover, subject to those members meeting underwriting requirements.
Benefits are based on the entitlement the individual member would have received if they had worked to age 60, subject to any pre-existing medical conditions being assessed. Benefits for contributors after reaching age 60 are based on the age retirement pension that would have been payable to them.
Table 21. New full invalidity pensioners in PSS
|
2016–17 |
2017–18 |
|
|
Full invalidity pensioners |
173 |
164 |
Note: This table shows the number of new invalidity retirement certificates issued in the relevant reporting year (not the total number of invalidity pensioners).
Partial invalidity
A partial invalidity pension—a form of income maintenance—is paid when a member’s salary is permanently reduced because of a medical condition.
Table 22. Partial invalidity pension applications in PSS
|
2016–17 |
2017–18 |
|
|
New applications |
74 |
10 |
Note: This table shows assessed applications including retrospective applications in the relevant reporting year.
Complaints
Table 23. Complaints received in PSS
|
2016–17 |
2017–18 |
|
|
Complaints received |
39 |
80 |
All complaints are now resolved. Most complaints related to superannuation legislation, but there was no clear reason why the number of complaints is twice those of 2016–17.
Changes to PSS’s legislation and trust deed
The Superannuation Amendment (PSS Trust Deed) Instrument 2018 amended the PSS Trust Deed and Rules to take account of current and proposed enactments, including the Safety, Rehabilitation and Compensation Legislation Amendment (Defence Force) Act 2017 and the Marriage Amendment (Definition and Religious Freedoms) Act 2017. The amendments simplified and updated a range of provisions and addressed matters related to preserved benefits. Most amendments took effect on 5 June 2018.
No changes were made to the Superannuation Act 1990.
In February 2018, the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018 was passed by Parliament which amended the Corporations Act 2001 and repealed the Superannuation (Resolution of Complaints) Act 1993.