Within the reporting entity, various Australian Government entities sponsor defined benefit superannuation plans. The following are the plans that are covered in this note:
• Commonwealth Superannuation Scheme (CSS);
• Public Sector Scheme (PSS);
• Parliamentary Contributory Superannuation Scheme (PCSS);
• Defence Force Retirement and Death Benefits Scheme (DFRDB);
• Military Superannuation Benefits Scheme (MSBS); and
• the following defined benefit superannuation schemes have been disclosed under
the heading ‘Other’.
Scheme title Responsible entities
AvSuper Airservices Australia
Australia Post Superannuation Scheme (APSS) Australia Post Corporation State Authorities Superannuation Scheme (SASS), State
Superannuation Scheme (SSS), State Authorities Non-contributory Superannuation Scheme (SASCS)
Australian Rail Track Corporation
Australian Submarine Corporation Superannuation Fund (ASCSF) Australian Submarine Corporation North American and London, Dublin and New Delhi pension
schemes (other)
Department of Foreign Affairs and Trade
Reserve Bank of Australia Officers’ Superannuation Fund (OSF)
and UK Pension Scheme (UKPS) Reserve Bank of Australia The Judges’ Pension Scheme (JPS), Governor-General Pension
Scheme and Federal Circuit Court Judges Death and Disability Scheme (FCCJDDS) (these are included in other in the tables)
Notes to the financial statements
194
This note includes information on the statutory and whole of government schemes listed above, including the Judges’ Pension Scheme (JPS), Governor General Pension Scheme and Federal Circuit Court Judges Death and Disability Scheme (FCCJDDS) listed under ‘Other’. Information on the other schemes sponsored by individual Australian Government entities can be found in the annual report of the responsible entities.
(a)
Accounting policies
The Australian Government recognises actuarial gains or losses immediately in Other Comprehensive Income in the year in which they occur. Net interest on the net defined benefit liability is recognised in profit and loss; the return on plan assets excluding the amount included in interest income is recognised in Other Comprehensive Income as part of re-measurements. Sensitivity analysis is provided on significant changes in assumptions that are reasonably possible.
(b)
Scheme information
Commonwealth Superannuation Scheme Scheme information and regulatory framework
The Commonwealth Superannuation Scheme (CSS) is a scheme for Commonwealth
civilian employees and was established under the Superannuation Act 1976. The CSS
was open to new members from 1 July 1976 to 30 June 1990.
The CSS 1976 Scheme is a regulated public sector scheme and must comply with the
Superannuation Industry (Supervision) Act 1993 which governs the superannuation
industry and provides the framework within which superannuation plans operate. Prior to 1976, the superannuation of Australian Government public servants was
covered by the Superannuation Act 1922. There are no longer any members contributing
under this Act. However, some pensioners remain entitled to benefits under this Act and the liabilities in respect of these members are included in the CSS liability.
The 1922 scheme is an exempt public sector superannuation scheme for the purposes
of the Superannuation Industry (Supervision) Act 1993.
Benefits provided
The CSS 1976 Scheme is a partially unfunded defined benefit scheme that provides benefits on resignation, retirement, involuntary retirement, invalidity and death (to eligible spouses / children). Retirement benefits include an unfunded employer financed lifetime indexed pension based on the member’s age at retirement, years of contributory service and final superannuation salary. The member’s basic contributions, employer productivity contributions and interest can be taken as a lump sum or an additional non-indexed lifetime pension.
Notes to the financial statements
195
Members of the scheme who resign before age 55 can claim a preserved resignation benefit on or after reaching that age. This benefit is commonly known as the 54/11 benefit. In this case, the unfunded employer financed lifetime, indexed pension is calculated by applying age-based factors to the amount of two and a half times the member’s accumulated basic member contributions and interest.
Indexed pensions are indexed twice yearly (January and July) in line with changes in the Consumer Price Index.
The 1922 Scheme is an unfunded defined benefit scheme that still provides the payments of pensions, deferred benefit entitlements and any reversionary pensions to surviving eligible spouses and/or children on the death of a member.
Funding arrangements
Funded contributions generally comprise basic member contributions and employer productivity (up to 3 per cent) contributions. These are invested in the CSS Fund. Members can also choose to make no basic member contributions. In most cases, when a member’s benefit becomes payable, monies held in the CSS Fund in respect of the member are paid to Consolidated Revenue with the member then having their benefit paid to them from Consolidated Revenue.
Governance
The Scheme’s Trustee, Commonwealth Superannuation Corporation (CSC), was
established under the Governance of Australian Government Superannuation Schemes Act
2011. CSC is responsible for:
• administration of the Scheme;
• management and investment of the Scheme assets;
• compliance with superannuation and taxation laws and other applicable laws; and
• compliance with relevant legislation including the Governance of Australian
Government Schemes Act 2011 and the Commonwealth Authorities and Companies
Act 1997.
ComSuper is the legislated provider of administration services for the Scheme under
the ComSuper Act 2011. ComSuper is subject to any reasonable direction from CSC and
is required to comply, where possible, with any policies, guidelines and standards regarding administration services set by CSC.
The prudential regulator, the Australian Prudential Regulation Authority (APRA), licenses and supervises the regulated CSS 1976 Scheme.
Notes to the financial statements
196 Public Sector Superannuation Scheme Scheme information and regulatory framework
The Public Sector Superannuation Scheme (PSS) is a scheme for Commonwealth
civilian employees and was established under the Superannuation Act 1990 and Trust
Deed made under the Act. The PSS was open to new members from 1 July 1990 to 30 June 2005.
The PSS is a regulated public sector scheme and must comply with the Superannuation
Industry (Supervision) Act 1993 and regulations under that Act which govern the
superannuation industry and provides the framework within which superannuation plans operate.
Benefits provided
The PSS is a partially funded defined benefit scheme that provides benefits on resignation, retirement, involuntary retirement, invalidity and death (to eligible spouse/children).
On retirement a lump sum benefit is payable. This lump sum is calculated based on the member’s length of contributory membership, their rate of member contribution and Final Average Salary (average of a member’s superannuation salary on their last three birthdays). Generally this lump sum comprises a funded component (as described above) and an unfunded component.
Where a member resigns before age 55, generally the member’s lump sum benefit at that time is crystallised with the funded component of the benefit accumulating with interest and the unfunded component accumulating with changes in the CPI, until the benefit becomes payable.
Members can convert 50 per cent or more of their lump sum to a lifetime indexed pension based on the member’s age.
Indexed pensions are indexed twice yearly (January and July) in line with changes in the Consumer Price Index.
Funding arrangements
Funded contributions generally comprise basic member contributions and employer productivity (up to 3 per cent) contributions. These are invested in the PSS Fund and accumulate with interest. Members can choose to make no contributions. When a member’s benefit becomes payable, monies held in the PSS Fund in respect of the member are paid to Consolidated Revenue with the member then having their benefit paid to them from Consolidated Revenue.