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50% limit on salary packaging removed
April 06 - The restriction limiting salary packaging to 50% of an employees’ superable or award salary has been removed for graded officers and SES officers. From 1 April 06 casuals will also be eligible to salary sacrifice to superannuation subject to Departmental/agency convenience. Premier's Circular 2006-08 says that while existing policy requires salary packaging to be implemented on a 'cost neutral' basis to the employer it is envisaged that most agencies implementing salary sacrifice to superannuation in-house would be able to do so on a fee free basis for employees.

New pollies to get 9%
November 05 - Legislation has been passed that closes the generous NSW parliamentary super scheme to new entrants from the next election. New parliamentarians will receive 9% putting them on par with most of the community including those who joined the public sector after 1992. The decision to close the scheme was triggered by a policy announcement by Mark Latham who said he would close the Commonwealth Parliamentary Scheme to new entrants. Prime Minister Howard immediately matched the policy creating pressure on state government's to follow suit. Former Premier Carr announced his intention to close the scheme just prior to the 2007 election. Since that time Commonwealth Pollies have had their contributions increased to 14.5% to match Commonwealth public service scheme contributions. Perhaps the new pollies might be allies in getting better super for our post 1992 members.

Are your super funds being used for Gunns' litigation
Tasmanian timber giant Gunns has commenced litigation against 20 individuals and organisations. Gunns are claiming over $6 million in damages as a result of protests against their logging practices. The Australian Conservation Foundation is urging you to write to your fund and other investors to pressure Gunns to withdraw the lawsuit. Click on the heading above for general information or download a draft letter to send to State Super (the 'old' or closed schemes) or First State Super (the 9% or open scheme). Or read another article from CorpWatch.

"Choice" in the NSW Public Sector
The Commonwealth Government's choice of fund legislation began on 1 July 2005. For most NSW public sector employees there was no change. Anyone who is eligible to be a 'full member' of First State Super (ie not members of the old SASS and SSS schemes) already had the choice to join any complying accumulation superannuation fund. This right is given under the First State Superannuation Act 2002 and extends to employees who have already opted to be in a fund other than First State Super. All NSW Government public sector employers are exempt from the particular requirements of the Commonwealth Choice legislation. This means they do not have to issue choice forms to all new employees. So if you wish to change the fund in which you receive your Super Guarantee Contributions then you need to approach your employer. Information on this page is not financial advice.

NT union consults members about better super
The Northern Territory CPSU is surveying its members to determine what claims it should serve on the employer in order to improve superannuation. This approach contrasts with the NSW PSA which did not draw on member input in developing its last salaries and conditions claims. As in NSW the NT's open 'accumulation' scheme is inferior to the closed 'defined benefit' schemes. South Australia, Queensland and the Commonwealth Government all provide benefits above the minimum 9%. Commonwealth public servants will receive 15.4% from July 2005.

Unions caution on Super Choice
Unions are cautioning members of not-for-profit employer and industry funds about the motives of retail funds that attempt to sign them up. The ACTU argues not-for-profit schemes provide better returns and have lower fees with no commissions to sales people. Check the ACTU's Super page for more info.

Budget 2005
The 2005 Budget abolished the superannuation surcharge from 1 July 2005 and from 1 July 2006 will allow for splitting superannuation contributions. There is no detail available on how super splitting will work except that it will need to be done during the contribution phase (probably once per year) rather than at the end. It will allow couples who have uneven amounts of super to maximise their tax free thresholds and avoid exceeding the Reasonable Benefit Limits. More details will be published on this page when the Government makes its announcement.

Super inquiry for under 40s
The House of Representatives Economics Committee is to examine issues associated with the superannuation savings of people under 40 years of age. The inquiry has been initiated in response to concerns that the superannuation savings of young adults may be falling short of the optimum savings level required to fund their retirement incomes. Further details about the inquiry, including how to make a submission, can be obtained from the at Committee's website or by contacting the Committee secretariat on (02) 6277 4587.

UK moves to abolish final salary schemes
The UK government plans to shift public servants off final salary schemes and switch them to a scheme based on average career salaries. The move has been criticised for its impact on women who have shorter working lives and will face strong opposition from the UK public service union UNISON. Article posted January 2005.

Super schemes to offer 'co-contribution' loans
At least one industry fund (joint union/management controlled) will offer loans to members so they can take advantage of the government's co-contributions. Article posted 2004.

2004 Budget changes
The Government has extended the superannuation co-contribution to middle income earners and increased the co-contribution for low income earners. This means a significant number of SASS and SSS scheme members will become eligible for co-contributions. The legislation and structure of these schemes prevents them accepting co-contributions so the question is where will they be paid? First State Super is the obvious choice as most SASS and SSS members who salary sacrifice or make top-up contributions do so into separate FSS accounts. However, the FSS trustees would have to agree to receive co-contributions. To date FSS has been reluctant to open such accounts for cost reasons. This seems short sighted given that many of these accounts may later become more substantial eg when the employee returns to full time work or moves on to a higher rate of pay.

How does it work?If you earn less than $28,000 (this and other amounts have subsequently been adjusted) you will have each dollar of your personal contributions (from after tax income and separate to the employers compulsory super) matched by $1.50 from the government, up to a maximum of $1500. For those on incomes over $28,000 the ‘cap’ reduces gradually, phasing out at $58,000 pa. In practice people on very low incomes can not afford to make voluntary contributions unless they have a wealthy spouse. The extension of co-contributions to people on up to $58,000 increases the number of people who may benefit from the scheme.

The other change is a further and significant reduction in the superannuation surcharge to 7.5% by 2006/07 (now abolished). The surcharge applies to high income earners so this is mainly a gift to the rich. Nevertheless the surcharge should ultimately be abolished because it is a very inefficient, and anomalous tax. There are many other more effective ways to limit superannuation tax subsidies to the wealthy for example Reasonable Benefit Limits.

UK Unions to fight reduction to Super Pension Plans
The UK Trades union Council says employers can expect industrial action if they persist with plans to reduce pension plan benefits.

Super deal for right wing mate
When the Premier ended the lucrative parliamentary super scheme for new parliamentarians he left the way open for one of Labor's mates to squeeze in. Eric Roozendaal will be accomodated in the old scheme by filling a vacancy prior to the elections.

Urgent action required on Super
The ACTU has joined a coalition of organisations calling for urgent action on superannuation including increasing the government's co-contributions to people earning up to $60,000 (the group's demand for extension of the co-contribution has been met - see story above on 2004 budget).

Comm Super better than NSW
At 14.5% the new (reduced) superannuation scheme for federal public servants will still be more generous than the 9% provided to NSW public sector employees (other than those who are in the now closed SASS and SSS schemes). The Coalition Government will close the old scheme from July next year in an attempt to reduce its $9 billion unfunded liability. There is widespread consensus that contributions of 15-18% are needed to generate an appropriate retirement income. The current 9% provided to members of First State Super (FSS) is not adequate. Some other states offer higher amounts as part of co-contribution arrangements. The PSA should be addressing this as part of our current pay claim.

Another 6% needed - Keating
A further 6 per cent of compulsory savings would not only dramatically improve retirement incomes, it would also substantially lift national savings writes Paul Keating in the Sydney Morning Herald.

ACTU goes for 15% super
The ACTU executive will campaign to boost superannuation contributions from 9 to 15 per cent. It will ask the Federal Labor to adopt the Keating government's plan of matching employee contributions of 3 per cent a year (9%+3%+3%=15%). The ACTU says unions should also consider achieving the 15% through award and enterprise agreement negotiations. This should be part of the PSA’s current salary claim.

Commonwealth Changes to Super
In early 2004 Treasurer Peter Costello announced changes to the superannuation system that aim to encourage older people to continue working in an attempt to address the potential problems of an ageing population. The changes include:

* encouraging people to access their superannuation from preservation age as an income stream (not lump sum) while working;
* allowing new market-linked income stream products to be eligible for the ‘complying pension’ Reasonable Benefit Limit (about twice as generous as the lump sum RBL limit);
* providing a 50 per cent social security assets test exemption for some income-stream products;
* allowing anyone under the age of 65 to make super contributions (no minimum work hours required);
* simplifying the super contribution and cashing rules for people between the ages of 65 and 74.

Follow this link for a description of the changes.

Follow this link the Treasurer's full speech.

EU urges firms to retain mature workers
The European Union says employers need to take "drastic action" to stop older workers being thrown on the scrapheap to address Europe's aging population.

Super Duper – More choice less performance
Alan Kohler, SMH, February 2004
On average private super funds are more expensive and provide lower benefits than industry and public sector funds (see Are fees eating your super?). Private funds try to differentiate themselves with a dazzling array of investment options. Industry funds (jointly managed by unions and employers) and public sector funds have been following the trend as a defensive move so as not to lose members. However, extra investment options usually means higher fees and worse performance (with the responsibility being offloaded to the individual).

Corrupt public servants to lose super
The Victorian Government will legislate to stop corrupt public servants from getting their superannuation after it was revealed a policeman jailed for corruption was in line for a $600,000 employment payout. The proposal is fraught with problems.

Are fees eating your super?
Annette Sampson, SMH, November 2003
Public sector and industry superannuation funds charge the lowest fees according to the Sydney Morning Herald. Retail funds charge the highest fees.

Coonan Sells super short
Alan Kohler, Sydney Morning Herald, September 2003
Senator Helen Coonan has been sent back to the drawing board on super choice and portability. The truth is the Government’s Choice legislation is about getting people out of the cheaper and better performing public sector, corporate and industry funds into the more expensive bank dominated retail funds where profits and commissions eat away your retirement savings.

“The fees go like this: public sector funds charge about 0.5 per cent of funds under management; industry and corporate funds between 1 and 1.2 per cent; retail funds' charges start at 1.3 per cent and go as high as 2.5 to 3 per cent, and then there are financial planners commissions on top of that.”

Not enough being put into super

A study shows that Australian's are not saving enough in super to provide adequate retirement incomce. Story & Graphic from Sydney Morning Herald.

Canadian union sets policy for trustees
In a first for North America, a union has adopted a policy statement for union super fund trustees that covers conflict of interest guidelines, expense allowances and appointments practices.

The Ontario union covering private sector workers in healthcare, social services and education (OPSEU) has a committee that monitors trustee conduct in line with the union's goals, interviewing prospective trustees and facilitating communication between the union, trustees and members.

Readers may be aware that the PPSA has been calling for improved accountability of PSA officers who sit on Boards and Committees including Superannuation Boards. PSA Executive officers have actively opposed these moves.

The Canadian OPSEU makes it clear to potential trustees that it expects that they will commit in writing to follow union policy, including in relation to training, attendance and conflict of interest.

If a trustee, in a particular instance, feels that their fiduciary duty is in conflict with their commitment to advance union policies, the trustee must initiate a discussion with union sponsors with a view to resolving the conflict. In the event that a trustee fails to perform their duties, the union will remove them.

The policy statement also contains detailed information and recommendations about corporate governance, active trusteeship, shareholder action, ethical screens and economically targeted investment.

The statement concludes, "Unions are ideally placed to influence the investment of pension funds through joint trusteeship so that investment can have a more direct impact on economic growth and on job creation to the benefit of working people."

Click here to read the policy.

ATO Reviews SG ruling
The Australian Tax Office has agreed to an ACTU request for a review of its decision that Super Guarantee is not payable on back wages (eg. making up for underpayments) paid by an employer to an employee who has ceased employment.

If the review finds that SG is not payable in these circumstances, the ACTU will ask the Government to change the law in order to achieve its original intent. (Source: ACTU)

Public service fund sues
The giant California Public Employees’ Retirement System (CALPERS) is suing AOL Time Warner, alleging that it fraudulently overstated advertising revenue by $1.7 billion. CALPERS is one of the world's leading super funds when it comes to dealing with corporate governance.

The legal action is just one of a number of class actions taken by Millberg Weiss, a firm of US lawyers lodging claims on behalf of funds whose members have lost money as a result of cases such as Time Warner and Enron. Millberg Weiss is keen to include Australian funds in these class actions, and is offering a portfolio monitoring service to inform funds of losses they may have suffered as a result of corporate fraud or other breaches of the law. Click here for details. (Source: ACTU)

Anger rises over exec pay
When GlaxoSmithKline shareholders voted against the board-recommended executive remuneration policy, it was the first time in the UK that a company has lost a vote on pay.

The TUC campaigned for the defeat, and was pleased with the historic 50.72% vote against the resolution.

Although the vote is not binding, the board says it is taking it very seriously. On the other hand, incredibly, there are rumours that Glaxo may transfer its headquarters to the US, where it believes that high executive pay is not such an issue.

Also significant was the 20% abstention rate, which has apparently prompted the British Government to consider abolishing the option for investors to abstain on such votes. (Source: ACTU)

US unions urge companies to follow Microsoft lead
AFL-CIO Secretary-Treasurer Richard Trumka has written to CEOs of the nation’s biggest firms urging them to abandon share options as a means of rewarding senior employees.

This follows a decision by Microsoft to replace its stock options program with restricted shares.

“Stock options can serve as a powerful incentive for executives to manipulate earnings or engage in accounting fraud,” said Trumka.

Microsoft’s move has also been applauded by John Plender, a Financial Times columnist, saying it “debunked the myth that options are an efficient motivator, capable of aligning employee interests with those of outside shareholders.

“The baleful reality,” he continues, “is that stock options have exerted an extraordinarily malign influence on business over the past decade. For a start, they provided the vehicle for a generation of managers to engage in legalised looting at shareholders' expense.….The lack of transparency on option costs contributed to the 1990s stock market bubble by creating an illusion of increased profitability.(Source: ACTU)

Super win for casuals
Two cases fought by unions have helped prevent employers from robbing casual employees of their entitlement to Superannuation Guarantee payments.

How the 2002 budget affected your super
The budget changes to super mainly help the well off. Check our plain English commentary on the changes.

Funds must consider labour standards 
Superannuation funds must now disclose the extent to which labour standards, environmental, social or ethical considerations are taken into account in their investments.

UK Government proposes super activism
The UK Government is proposing that super funds intervene in companies in which they invest. In Australia a similar idea is beginning to emerge.

Super helps redistribute wealth
The growth in super through the Super Guarantee has countered the growing inequality in wealth according to research by National Centre for Social and Economic Modelling.
 

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DID YOU KNOW?
Did you know that although the Super Guarantee Act does not require Super Guarantee payments to employees under the age of 18 who work part time and women on paid maternity leave, The First State Super Act requires that all 'full members' of First State Super (including the above categories) be paid 'compulsory employer contributions'(9% of salary).

The Progressive PSA brings together rank and file trade union activists in the Public Service Association of New South Wales and the CPSU (SPSF Branch). 

We work for

• improved and more equitable pay 
• greater job security
• sustainable jobs in a sustainable environment;
• a democratic and strong union