The current version of the SES Guidelines contains information about the method for calculating superannuation oncosts for executive members of First State Super (FSS). Since these Guidelines were issued, legislative amendments have taken effect that slightly alter the calculation method. The changes are:

1. The application of the maximum contribution base to limit the amount of compulsory superannuation guarantee contributions that must be paid by executive officers, effective from 1 July 1999.

Executive officers who are FSS members will no longer be required to pay superannuation guarantee contributions on any part of their salary that exceeds the maximum contribution base provided by the Australian Taxation Office (currently $100,960).

It has become evident that some agencies were not aware that prior to 1 July 1999 the FSS legislation did not allow the maximum contribution base to be applied to FSS members. The result is that some executive officers, who should have paid employer contributions on the part of the salary that exceeded the maximum contribution base, did not.

It has been determined that no action is required in respect of these 'underpaid' contributions, because they did not involve any breach of the minimum requirements of the Commonwealth's superannuation guarantee legislation, nor was there any financial detriment to the employer.

2. The introduction of the concept of nominated salary to FSS, to be applied in the same way as in PSESS, with effect from 1 July 1999.

The concept of nominated salary, as used for members of the Public Sector Executives Superannuation Scheme (PSESS), has been incorporated into FSS for executive officers, in order the minimise changes to arrangements for executive officers who transferred from PSESS to FSS.

The maximum nominated salary is the total value of the remuneration package less the cost of providing employer contributions to superannuation and any performance related incentive payment.

The minimum nominated salary is the salary, or 'monetary remuneration' payable (ie the cash component), or the maximum contribution base, whichever is the lower.

The rules applying to the election of, or decreases or increases in, nominated salary are the same as for PSESS members, as follow:

• If a member fails to nominate a salary within 28 days of becoming a member or entering into an executive contract, the officer will be taken to have elected the minimum nominated salary.
• Nominated salary may be reduced on notification to the employer, as long as it is not reduced to below the salary or monetary remuneration amount.
• Nominated salary may not be increased by a greater percentage than the percentage by which the value of the total remuneration package was increased since the amount of the salary was last nominated or changed.

3. The capacity for an executive officer who is an FSS member to make an irrevocable election to cease paying superannuation guarantee contributions where the member's entitlements have exceeded the Commonwealth pension 'Reasonable Benefit Limits' (RBLs).

R. Kruk

Acting Director-General