The recently passed First State Superannuation Amendment (Conversion) Act 2005 allows the FSS Trustee Corporation to convert FSS from a state regulated scheme to a Commonwealth regulated scheme. It is expected that the Trustee will convert the scheme in early 2006 subject to approval by Commonwealth licensing and regulatory authorities.

 

As a state regulated scheme FSS was restricted under a Heads of Government Agreement with the Commonwealth from accepting contributions for non-public sector employees. Research undertaken by the Trustee indicates that almost 70% of former public sector employees would continue to contribute to FSS if they were allowed to do so. By converting FSS from a state to a Commonwealth regulated scheme the Trustee will be able to offer continued membership to public sector employees who leave the public sector. The Trustee will also gain the option of opening up membership of FSS if it chooses. This would make FSS membership portable' while continuing as a not-for-profit scheme.

 

Please note there is no change for public sector employers. First State Super remains the default fund for NSW public sector employers. Contributions will continue to be made in the same way.

 

The Trustee will write to employers soon with more information, including a Frequently Asked Questions sheet for circulation in the workplace. The Trustee will inform all members of these changes through a direct mailout around late February 2006.

 

The changes do not alter the entitlements or security of members' investments. FSS and the Trustee will be governed by the Commonwealth Superannuation Industry Supervision Act 1993 and Regulations (SIS) and be under the prudential control of the Australian Prudential Regulatory Authority (APRA). Existing members keep their rights and entitlements.

 

Unions NSW has been consulted throughout the process and supports the changes.

 

The Trustee Board will continue to be composed of employer and employee representatives as it is now.

 

The New South Wales Auditor General will continue to be the auditor for FSS and the Trustee for the first three years.

 

FSS members will gain access to the Superannuation Complaints Tribunal. The Trust Deed and Rules will also make provision for continued right of access to the New South Wales Industrial Relations Commission to dispute Trustee decisions.

 

C Gellatly

Director-General