There are various questions being forwarded to the PSA about superannuation and your union’s successful pay rise claim. The following provides industrial advice only.

Accumulation funds

The PSA welcomes the 0.5 per cent increase to superannuation from July 1. It has been a delayed Federal Government policy for 30 years (since the Keating Government) to increase superannuation to 12 per cent so workers can have a reasonable self-funded retirement. From July 1 the 0.5 per cent boost in the Superannuation Guarantee Levy (your employer’s compulsory contributions) increased it from 9.5 per cent to 10 per cent.

This legally enforceable increase to superannuation means that the maximum  salary increase that the PSA could claim this year was 2.04 per cent. This is due to Section 146C of the Industrial Relations Act 1996 (NSW), which caps employee expenses costs to 2.5 per cent per annum and includes any increases to superannuation. The PSA agrees that this is not fair, however  the PSA took challenged this  in a Supreme Court of Appeal in 2013, but was not successful and the  Employment Regulation was subsequently amended.

What about defined benefits superannuation schemes?

In NSW there are many members in defined benefits superannuation schemes that are covered by separate legislation and not by the Superannuation Guarantee (Administration) Act 1992 (Cth). By discounting an award salary increase because of the accumulation fund employer contributions under the Superannuation Guarantee Levy changes means that without legislative intervention, these workers get the same pay rise outcome because of the government’s wages cap, but no extra superannuation contribution in the award. In 2013 we dealt with this by advocating for changes to the legislation that governs the defined benefit schemes allowing additional contributions to be made to a separate super account equal to the Superannuation Guarantee Levy increase.

This advocacy led to the implementation of amendments to legislation in the Parliament, including various amendments to the State Authorities Non-Contributory Superannuation Act 1987. These changes were applied to members of Commonwealth superannuation schemes also in 2013.

The union has written to the Industrial Relations Secretary’s representative, to seek to have a similar approach taken this year, which the Treasurer can implement via Regulation for the 0.5 per cent equivalent. You can read the letter HERE.

The NSW State Super SAS Trustee has released a BULLETIN detailing how these arrangements have worked in the past and how they have approached the Treasury for them to be implemented this year.

Note: This is general industrial advice about the current situation for the Salaries claim, and is not financial advice and should not be relied upon for making financial decisions.