Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The answer to the honourable senator's question is as follows:

(1) and (2) Mercer (Australia) Pty Ltd (Mercer), the actuary for the civilian superannuation schemes and the Australian Government Actuary (AGA) assumed that enhanced indexation arrangements would result in a higher proportion of Public Sector Superannuation Scheme (PSS) and Military Superannuation and Benefits Scheme (MSBS) benefits being taken as a pension because pensions would become relatively more valuable and therefore relatively more attractive than lump sum benefits.

The updated estimates of the cost of alternative indexation arrangements for Commonwealth superannuation pensions that is available on the Department of Finance and Deregulation website includes copies of the Mercer and AGA recent actuarial advice. That advice sets out information in relation to the assumptions they have made including in relation to the take-up rate of pensions in the PSS and MSBS.

(3) There would be an increase in the cash payments over the forward estimates, which is a negative impact on the underlying cash balance. There would be a small reduction in the increase in unfunded liability.