Michael McCormack (Riverina, National Party, Minister for Small Business) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Superannuation Amendment (PSSAP Membership) Bill 2016 (the bill) enables members of the Public Sector Superannuation Accumulation Plan (PSSAP) who move to non-Commonwealth employment to choose to remain a contributory member of PSSAP.

The PSSAP, which was established on 1 July 2005, is the current default fund for new Commonwealth employees and employees of prescribed Commonwealth entities. As a fully funded accumulation scheme, the PSSAP provides more modern, flexible superannuation arrangements than the older Commonwealth defined benefit superannuation schemes, all of which are now closed to new members.

At present PSSAP members are unable to remain as contributory members when they move to non-Commonwealth employment. They must either maintain multiple superannuation accounts or consolidate their superannuation by moving the monies in their PSSAP account to another superannuation account. Both of these options involve additional administration costs for the member. For members who decide to maintain multiple superannuation accounts, these additional costs are ongoing.

The changes in the bill address this issue by enabling PSSAP members who move to non-Commonwealth employment to maintain contributory membership. These persons will form a new subcategory of ordinary employer-sponsored member of PSSAP, referred to in the bill as 'former Commonwealth ordinary employer-sponsored members', and their new employers will become 'designated employers'.

The changes will better align PSSAP with superannuation schemes in the superannuation industry, which commonly enable members to remain contributory members when they change employment. They are also consistent with broader government superannuation reforms and initiatives to lower the costs that members incur for the administration and management of their superannuation accounts.

The bill places some restrictions on maintaining contributory PSSAP membership. A person must have been a Commonwealth employee or office holder for a continuous period of at least 12 months. They must also be engaged in non-Commonwealth employment in respect of which their employer has a superannuation guarantee obligation.

Those who move from Commonwealth employment to certain other roles with the Commonwealth—for example, service with the Australian Defence Force—will not be affected by the changes. They will continue to be subject to the Commonwealth superannuation arrangements specifically established for persons in these roles.

2 The bill commences on the earlier of proclamation or six months after royal assent. This flexibility will help to ensure that Commonwealth Superannuation Corporation, the trustee of the Australian government's main schemes, has sufficient time to arrange necessary changes to the PSSAP systems before the new arrangements take effect.

Overall, the changes are important to maintain contemporary Australian government superannuation arrangements that are in line with those in the broader superannuation industry. They support workforce mobility and complement broader government initiatives to reduce the administration costs borne by members of superannuation schemes.

I commend the bill to the House.

Debate adjourned.