The Turnbull government introduced a new amendment to public sector superannuation legislation yesterday during the final sitting day of the parliamentary session.
When any changes to super — especially government super — are generally treated suspiciously, why is more change needed? The changes in the current round are unlikely to have any substantive impact on beneficiaries, but do clean up anomalies that could have led to some missing out on benefits.
Surviving children of Commonwealth super scheme members
Several Commonwealth super schemes allow benefits to be payable to a surviving dependent child of a deceased member, however children over the age of 16 must prove they are in full-time education. In addition, some schemes require the beneficiary must also not be working.
Reflecting that the majority of current children do not leave formal education until at least the age of 18, and part-time and casual employment is common, the threshold for that test is increased to 18.
The schemes affected include: The Parliamentary Contributory Superannuation Act 1948, the Judges’ Pensions Act 1968, the Federal Circuit Court of Australia Act 1999, the Superannuation Act 1976 and the Superannuation Act 1922. The more recently updated Military Superannuation and Benefits Scheme already reflects this and does not need updating.
Parliamentary super re-calculation
Lump sum payments aren’t exactly popular with those on defined benefit schemes, but where the option is taken must meet statutory minimum superannuation guarantee requirements.
According to Assistant Minister for Finance David Coleman, the actuary for the Parliamentary Contributory Superannuation Scheme has advised that, in certain limited circumstances, in the future, the current calculation method would not produce a benefit that would meet the statutory minimum superannuation guarantee requirements. That specific set of circumstances is narrow, and only where a scheme member has died without a spouse, but they’re amending the calculation nonetheless.
Coleman says the new calculation will not increase any parliamentary pension entitlements for any individual members.
Several new categories of non-judges have been allowed judge-equivalent status and membership of the Judges’ Pensions Scheme, and the amendment brings them in line with other Commonwealth super schemes to allow a person to request a lump sum to meet their division 293 tax liability. Judges, however, are exempt from the division 293 tax for constitutional reasons.
Fewer super board members
In what is either a cost saving measure, or a first strike against someone the government doesn’t like, the Commonwealth Superannuation Corporation board will be reduced from 11 directors to nine.
The current board includes former Victorian Finance mandarin Dr Michael Vertigan, three current and former officers of the Community and Public Sector Union (Nadine Flood, Sunil Kemppi, Winsome Hall), and former Howard government minister Chris Ellison, along with military and business representatives.
The bill will also allow the CSC to skip the Australian Government Actuary and seek advice from alternative sources.