The purpose of this Circular is to advise you of recent amendments to NSW public sector superannuation legislation and other arrangements arising from the passage of the Superannuation Legislation Amendment Act 2000, which was assented to on 13 December 2000. Apart from Item 7, the new provisions became effective at that date.

The Circular briefly covers amendments affecting members of the following schemes; First State Super (FSS), Police Association Employees Superannuation Scheme (PAESS), Police Superannuation Scheme (PSS), State Superannuation Scheme (SSS), State Authorities Non-contributory Superannuation Scheme (SANCS) and State Authorities Superannuation Scheme (SASS).

1. Amendments affecting members of First State Super (FSS) 
Application of ‘maximum contribution base’ to non-executive FSS members required to pay employer superannuation contributions out of their Total Remuneration Packages (TRP). 
Under the Commonwealth’s Superannuation Guarantee legislation, employers are not required to pay superannuation guarantee contributions on the part of an employee’s salary that exceeds the ‘maximum contribution base’ ($105,200 for the 2000-2001 financial year). 
‘Executive officers’ in FSS, such as SES officers, are required to pay the employer’s superannuation guarantee contributions out of their TRP. Consistent with the Commonwealth provisions, they can choose not to pay such contributions on the part of the cash component of a TRP that exceeds the maximum contribution base. 
There are, however, other FSS members on contracts, who are required to pay employer contributions out of their TRP’s, but not defined as ‘executive officers’ under the Act. The purpose of the new amendment is to allow these additional members to elect not to pay superannuation guarantee contributions on the part of the cash component of a TRP that exceeds the maximum contribution base. Such elections are to be made in writing to the relevant employer, and are revocable.
The Australian Taxation Office (ATO) is expected to announce the maximum contribution base amount for the next financial year in due course. The ATO may be contacted on 13 10 20 for further advice.

2. Amendments affecting members of the Police Superannuation Scheme (PSS)
Repayments to the scheme trustee, the SAS Trustee Corporation (STC), in relation to hurt on duty benefits where damages are also awarded for the same injury.
STC is required to ensure that a member of the police force is not paid both a gratuity from the scheme and damages from third parties in relation to the same hurt on duty injury. 
The new amendments enable STC to be indemnified for the amount of the damages from the person paying the damages, and to obtain an authority to seek information or evidence about the damages from a third party. STC may refuse to pay the gratuity until such authority is granted.

3. Amendments affecting members of the State Superannuation Scheme (SSS) 
Corrective amendments to Withdrawal benefit provisions 
In 1998, the withdrawal benefit, available on retrenchment, resignation, dismissal or discharge from service, was amended to recognise interest based on the fund earning rate. The resulting benefit was capped so that a greater benefit was not provided on withdrawal from service than for retirement. 
The new amendments ensure that no member will be worse off than if there had been no amendment to the withdrawal benefit in 1998.

Removal of 6 month waiting period for commutation of benefit. 
Previously, a member who wished to commute the early voluntary retirement pension to a lump sum had to make an election to do so 6 months before it could take effect. Therefore a person wishing to retire with a lump sum benefit at age 55 had to make the commutation election on attaining 54 years and 6 months. 
The new amendment removes the 6 months waiting period. An election made since 13 June 2000 will take effect on 13 December 2000 or when the member attains age 55, if that is a later date.

4. Amendments affecting members of PSS and SSS - 
Acceptance of late elections, applications and choices. 
The new amendments permit STC to accept late elections, applications and choices, but with conditions possibly being placed on their acceptance. This will specifically allow acceptance of elections for the recent ‘conversion’ offer which allowed members to elect to transfer to FSS or another fund.

5. Amendments affecting members of PSS, SSS and State Authorities Superannuation Scheme (SASS) - 
Adjustment of pensions for Consumer Price Index (CPI) increases. 
Previously the schemes’ pensions were adjusted annually but only when the CPI for the previous financial year had increased by at least 1%. 
The new amendments allow adjustment for small upwards movement in the CPI of less than 1%.

6. Amendments affecting members of PSS, SSS, State Authorities Non-contributory Superannuation Scheme (SANCS), and SASS - 
Offset of superannuation surcharge 
Through Commonwealth legislation, members on higher incomes may be required to pay an additional surcharge tax on employer contributions. The new provisions allow affected members to request STC to pay this surcharge debt from the 3% Basic Benefit available from SANCS for which PSS, SSS and SASS members are automatically covered instead of reducing their PSS, SSS or SASS benefit. This measure may be particularly relevant for persons whose primary benefit is a pension.

7. Amendments affecting members of PSS, SSS, Police Association Employees (Superannuation) Act 1969, SANCS, and SASS - 
Release of Benefits on compassionate or severe hardship grounds. (These amendments will commence shortly when Regulations to the Acts are in place).
The new amendments will allow STC to release benefits to members, still working in the NSW public sector, on compassionate grounds or in circumstances of severe hardship where these demands cannot be met from other sources. 
Compassionate grounds may include the payment of medical expenses for the member or their dependents, prevention of mortgage foreclosure, modification of a home or motor vehicle to cater for a disability or to pay for palliative care, funeral or burial expenses.
Release of benefits on severe financial hardship ground will depend on the age of the member but generally will allow a lump sum payment of between $1,000 and $10,000 per member no more than once a year. This will only be payable where there is evidence that the member has been receiving an income support benefit for 26 weeks or more without any break.

Enquires concerning any of the above changes may be directed to the Superannuation Administration Corporation on telephone (02) 9238-5555, (or the following Customer Service numbers: SASS - 1300 130 095, SSS - 1300 130 096, PSS -1300 130 097, FSS - 1300 650 873); or to the Public Sector Management Office Superannuation Policy Unit on (02) 9228-3579.