Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Gallagher for her contribution to this debate. The Superannuation Amendment (PSSAP Membership) Bill 2016 enables members of the Public Sector Superannuation Accumulation Plan, a fully funded scheme that has operated as a default fund for new Commonwealth employees since 2005, to maintain contributory membership of the scheme if they move to non-Commonwealth employment. This change will bring PSSap into line with accumulation schemes in the broader superannuation industry, which commonly allow members to remain as contributory members when they change employment. In recent years there have been a range of government initiatives aimed at reducing administrative costs borne by scheme members. The changes in the bill complement these initiatives, as PSSap members who move to non-Commonwealth employment will no longer have to incur the cost of maintaining multiple superannuation accounts or rolling the moneys held in their PSSap account over to a new superannuation account.

The ability to maintain PSSap contributory membership on ceasing Commonwealth employment will be subject to some restrictions. In particular, a person must have been a Commonwealth employee or office holder for a continuous period of at least five months and be engaged in employment in respect of which their new employer has a superannuation guarantee obligation. Specific superannuation arrangements have been established for persons in various non-employee roles with the Commonwealth. These include, for example, members of the Australian Defence Force. Those who move from Commonwealth employment to such roles are not affected by the changes. They will continue to be subject to the Commonwealth superannuation arrangements established specifically for these persons.

The changes in the bill will ensure that Commonwealth superannuation arrangements remain contemporary and complement broader initiatives aimed at reducing the administration costs borne by scheme members. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.