New super tax legislation that affects all super funds and their members came into effect from 1 July 2007. The changes are different depending on whether tax has or has not been paid on contributions.
The PSS is a defined benefit scheme and includes both taxed and untaxed components as follows:
Member component - this is your own contributions plus Fund earnings. We call this a ‘taxed’ component because it is money paid from your after-tax salary directly into the PSS to be invested.
Productivity component - this is your employer’s productivity contributions since 1 July 1990 (less 15% contributions tax) plus Fund earnings. We call this a ‘taxed’ component because it includes money paid directly into the PSS to be invested. Any productivity contributions paid before 1 July 1990 are treated as an ‘untaxed’ component.
Employer-financed component—determined only when you leave, this amount is the balance remaining after your member and productivity components are deducted from your total lump sum benefit. We call this an ‘untaxed’ component because it is paid from the Consolidated Revenue Fund (CRF), not the PSS. For tax purposes, it is treated as coming from an ‘untaxed source’.
The main changes that affect PSS members include:
The main changes for those claiming a benefit at age 60 or over include:
