Act Public Sector

ACT PUBLIC SECTOR

SUPERANNUATION ARRANGEMENTS

Purpose

To advise Directorates and Agencies of current superannuation arrangements for ACT public sector employees.
This Advice updates and consolidates the following Advice Statements:

No. 7/2006 – Extension of Full Superannuation Choice Arrangements to ACT Public Service Staff;
No. 9/2006 – Superannuation Employer Contribution Arrangements for ACT Public Service Staff;
No. 11/2006 – Superannuation Arrangements for ACT Public Service Temporary Staff; and
No. 16/2006 – Closing Off of Access to the Public Sector Superannuation Accumulation Plan (PSSAP) to New Staff.

Full choice of superannuation fund arrangements were extended to new ACT Public Sector employees from 1 July 2006. From that date new employees can elect to have their employer contributions and any voluntary personal contributions paid into a complying superannuation fund or retirement savings account of their choice, with the exception of the Commonwealth superannuation funds (CSS, PSS and PSSAP) which have been closed to new members. A complying superannuation fund is one that complies with the Superannuation Industry (Supervision) Act 1993 and Regulations.

Commonwealth Superannuation Scheme (CSS)

The CSS was closed to new members from 1 July 1990. The only exception applies to previous members who, in specific circumstances, are able to return to the scheme.

Public Sector Superannuation Scheme (PSS)

The PSS was closed to new members from 1 July 2005. Exception applies to former members who, in specific circumstances, are able to return to the scheme.

Public Sector Superannuation Accumulation Plan (PSSAP)

The PSSAP replaced the PSS from 1 July 2005. Temporary employees who commenced employment or a new term of employment in the period from 1 July 2005 to 30 June 2006 were given the opportunity to join PSSAP.

Access to the PSSAP was formally closed to all new ACTPS employees, including former PSSAP members, on and from 6 October 2006.

New employees must be provided with a Superannuation Standard Choice Form and an Acknowledgement of Receipt of Information Form, copies of which are available from the Shared Services portal. Directorates and Agencies are required to complete Sections B and C of the Standard Choice Form.
Directorates and Agencies are also required to provide information that will assist new employees to decide which superannuation fund they wish to join. Directorates and Agencies should take care to ensure that any information provided to new employees does not constitute financial advice. In this regard the Australian Securities and Investment Commission guidance to employers about superannuation choice (QFS 156) warns employers against providing financial advice, explains what constitutes financial advice, and discusses the type and nature of factual information employers can provide to employees on superannuation choice.

Employees who do not nominate a choice of superannuation fund when they commence employment with the ACTPS will have their employer contributions, and any voluntary personal contributions, paid into the Territory’s default superannuation fund.
From 1 October 2013, employers are required to pay default superannuation contributions into an authorised MySuper product. A MySuper default product is one which complies to a regulated set of features, including a single investment option, a minimum level of insurance cover, an easily comparable fee structure, restrictions on how advice is provided and paid for, and rules governing fund governance and transparency.

Superannuation guarantee (SG) is the term used for compulsory superannuation contributions made by employers on behalf of their employees. The system was introduced in 1992 with a contribution rate originally set at 3% of employees’ income, which has since been gradually increased. Between 1 July 2002 and 30 June 2013 an SG rate of 9% of the ordinary time earnings of employees, including part-time and casual employees, was paid by employers into a complying superannuation fund or retirement savings account.
ACT public sector employees who commenced employment after 30 June 2006, and who have their superannuation contributions paid into a fund other than the CSS, PSS or PSSAP, have their employer contribution paid at the prevailing SG rate. The SG rate has been progressively increased since 30 June 2013. For details of the current SG rate applying in the ACTPS contact Shared Services.

Where an ACT public sector employee in receipt of the SG rate elects to make voluntary personal contributions of at least 3% of their salary they will receive an additional 1% employer contribution on top of the SG rate. Employees need to complete an Employee Contribution Rate Form if they wish to make voluntary personal contributions to a superannuation fund of their choice, or to the Territory’s default fund. Should the employee subsequently reduce their level of personal contribution below 3% of salary, Directorates and Agencies should advise the employee that the employer contribution rate will automatically revert to the SG rate.

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Bronwen Overton-Clarke

Deputy Director-General

Workforce Capability and Governance Division

Chief Minister, Treasury and Economic Development Directorate

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September 2016

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