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PSS accumulation plan opens 1 July 2005

The PSS accumulation plan (PSSap) will open to members on 1 July 2005 to provide superannuation services and products to employees of the Australian Government and participating agencies.

The following is a general overview of the proposed accumulation plan. A website and a full product disclosure statement will be available from 1 July 2005 onwards.

Before making any decisions about your super, please consult a licensed professional, such as financial adviser, to help you with advice that takes into account your personal objectives, financial situation or needs.

Are you eligible to join?

Subject to legislation, eligibility arrangements are as follows:

IF YOU ARE AN EXISTING EMPLOYEE OF THE AUSTRALIAN GOVERNMENT AS AT 30 JUNE 2005

In most cases, existing employees will not be able to join the PSSap.

However, existing non-ongoing (temporary) employees or statutory office holders, who are not members of the PSSdb or CSS, may be able to join the PSSdb after 1 July 2005. This can only be done during the period of their term of employment or appointment as at 30 June 2005. Once that contract has ceased, they can only join the PSSap in respect of a new term of employment or appointment as appropriate, and only if they have not joined the PSSdb in respect of their earlier term of employment or appointment .

IF YOU INTEND TO START AUSTRALIAN GOVERNMENT EMPLOYMENT ON OR AFTER 1 JULY 2005

Most new employees who do not have an existing interest in the PSSdb or CSS will be able to join the PSSap.

Most new employees who do have an interest in the PSSdb or CSS will have their PSSdb or CSS account re-activated and will not be able to join the PSSap.

If you are not sure, please ask your employer.  

Who will manage the PSSap?

The PSSap will be managed by the PSS Board, established under the Superannuation Act 1990.

The PSS Board also manages the Public Sector Superannuation defined benefit plan (PSSdb) which will be generally closed to new members on 30 June 2005. As of April 2005, the PSSdb had over $7 billion in funds under management and provided superannuation products and services to over 240,000 members, 11,000 pensioners and 266 Australian Government employer-agencies. In 2003, the PSS Board received a United Nations Award for responsible and sustainable investment.  

The five members of the Board are appointed by the Minister for Finance and Administration to look after the best interests of members. Two are nominated by the Australian Council of Trade Unions and the Chairman is independent.

The Board will be responsible for all aspects of the PSSap including investment strategy, administration and member communications and is supported by an Executive Unit, an administrator (ComSuper), a custodian (JPMorgan Chase Bank, N.A.) and other specialist service providers, including leading Australian and international investment managers.

What will the PSSap provide?

The PSSap will be an accumulation fund which means that the money a member and their employer contribute, along with any money transferred from other funds will 'accumulate' with investment earnings to form a member's retirement benefit.

PSSap retirement benefit components

Your employer contributions

+ Any member (personal) contributions

+ Any transfers from other funds

+ Investment earnings (which can be negative)

- Fees and charges

- Insurance premiums if applicable

- Taxes

= your retirement benefit

 

When they retire, members will be able to take their PSSap benefit as a lump sum.

What are the proposed key features of the PSSap?

The following features are subject to terms and conditions, and will not be finalised until the PSSap opens on 1 July 2005.

Employer contributions - employers will contribute at least 15.4% of a member's superannuation salary to their PSSap account, subject to superannuation law.

Personal contributions - members will be able to build their PSSap super further with contributions (either before- or after-tax), transfers from other super funds and spouse contributions. Before-tax contributions, otherwise known as salary sacrifice contributions, are subject to individual employers allowing them.

Insurance - members will have access to Death and TPD cover plus income protection through American International Assurance Company ( Australia ) Limited, trading as AIG Life. Basic Death and TPD cover is compulsory for members who are eligible and premiums will be deducted from a member's PSSap account at the end of each month.

Investment choice - members will be able to choose how their super is invested with a range of options including four pre-mixed options and seven asset class options which they will be able to mix and match to suit their needs.

Benefit options - members will be able to take their PSSap retirement benefit as a lump sum when they retire, or transfer it to another complying fund if they leave Australian Government employment, retire or transition to retirement.

Fees and charges - members will not pay administration fees, these are currently covered by employers. However, there may be fees and charges (such as insurance premiums) that will be deducted from a member's account. Investment management costs will be reflected in either a 'buy' or 'sell' unit price which will be announced each business day.

Investment performance - as the PSSap is a new fund, it will not have a performance history when it starts. Overall, performance will vary according to a member's investment choice.

Administration -the PSSap will use the world-class administration services of ComSuper, which is an Australian Government agency so the people assisting members will understand their employment conditions and are generally also members of one of our funds.

Useful links  

  • The Public Sector Superannuation Scheme ('PSS')
    Supplementary product disclosure statement
  • Useful and user-friendly information about looking after your superannuation from ASIC, the consumer protection regulator for financial services
    www.fido.asic.gov.au