Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

The Superannuation Amendment (PSSAP Membership) Bill 2016 enables certain members of the Public Sector Superannuation Accumulation Plan, PSSAP, who move to non-Commonwealth employment to choose to remain a contributory member of the scheme. Labor supports this bill.

The PSSAP, which was established on 1 July 2005, is the current default fund for new Commonwealth employees and employees of prescribed Commonwealth entities. The introduction of the PSSAP was a sensible modernisation and brought public servants' superannuation into line with community expectations and the superannuation accumulation arrangements available to most people. However, at present PSSAP members are unable to remain as contributory members of the scheme when they move to non-Commonwealth employment. They must either maintain multiple superannuation accounts or consolidate their super by moving the monies in their PSSAP account to another superannuation account.

This bill removes the restrictions on ex-public servants who choose to move to other industries and want to continue contributing to their existing superannuation account. The bill will enable PSSAP members who move to non-Commonwealth employment to maintain, contributory membership of the scheme. This means that PSSAP members who move to non-Commonwealth employment will not be forced to maintain those multiple accounts or move their balances to other accounts. The changes will better align PSSAP with superannuation schemes in the superannuation industry which commonly enable members to remain contributory members when they change employment. The changes will reduce transaction costs for these individuals, increase their retirement income and enhance the flexibility of the superannuation arrangements. We are supporting this bill, which will remove those restrictions on ex-public servants who want to remain within the PSSAP scheme.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Gallagher for her contribution to this debate. The Superannuation Amendment (PSSAP Membership) Bill 2016 enables members of the Public Sector Superannuation Accumulation Plan, a fully funded scheme that has operated as a default fund for new Commonwealth employees since 2005, to maintain contributory membership of the scheme if they move to non-Commonwealth employment. This change will bring PSSap into line with accumulation schemes in the broader superannuation industry, which commonly allow members to remain as contributory members when they change employment. In recent years there have been a range of government initiatives aimed at reducing administrative costs borne by scheme members. The changes in the bill complement these initiatives, as PSSap members who move to non-Commonwealth employment will no longer have to incur the cost of maintaining multiple superannuation accounts or rolling the moneys held in their PSSap account over to a new superannuation account.

The ability to maintain PSSap contributory membership on ceasing Commonwealth employment will be subject to some restrictions. In particular, a person must have been a Commonwealth employee or office holder for a continuous period of at least five months and be engaged in employment in respect of which their new employer has a superannuation guarantee obligation. Specific superannuation arrangements have been established for persons in various non-employee roles with the Commonwealth. These include, for example, members of the Australian Defence Force. Those who move from Commonwealth employment to such roles are not affected by the changes. They will continue to be subject to the Commonwealth superannuation arrangements established specifically for these persons.

The changes in the bill will ensure that Commonwealth superannuation arrangements remain contemporary and complement broader initiatives aimed at reducing the administration costs borne by scheme members. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.