Statutes Amendment (Superannuation) Bill

Introduction and First Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (15:49): Obtained leave and introduced a bill for an act to amend the Police Superannuation Act 1990 and the Southern State Superannuation Act 2009. Read a first time.

Second Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (15:50): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill seeks to make amendments to the following Acts for the purpose of altering the superannuation arrangements provided under those statutes: the Police Superannuation Act 1990, and the Southern State Superannuation Act 2009.

One of the main proposals dealt with in the Bill relates to the introduction of a facility that would permit police officers who are members of Triple S to elect to make their compulsory superannuation contributions required under the Southern State Superannuation Act 2009 (4.5% for most police officers) on a salary sacrifice or pre-tax equivalent basis. In order to ensure that the final benefit is not adversely reduced by tax, it is necessary for the salary sacrificed amount to be increased to take account of the 15% tax that will be payable on the contribution when it is paid from the scheme as a benefit. This will mean that police officers will be required to make a contribution of at least 5.3% of pre-tax monies to ensure the equivalent after tax contribution of 4.5% is maintained.

Police officers who are members of Triple S and who were previously members of the former Police Lump Sum Scheme may currently contribute to Triple S at the 'applicable percentage', being the rate that they were required to contribute under that former Scheme. This will ensure that they remain eligible for the 'minimum guaranteed benefit' upon retirement under Schedule 1 of the Southern State Superannuation Act 2009. The intention is for these members to be permitted to make these compulsory contributions on a pre-tax basis. However, the applicable percentage in respect of each eligible officer will need to be increased to take account of the tax that will be payable on the pre-tax contribution once the benefit becomes payable.

Any police officer who makes a pre-tax contribution of at least 5.3% (or the greater adjusted applicable percentage required in respect of those wishing to maintain the minimum benefit guarantee) will no longer be required to make their compulsory contribution on a post-tax basis. However, such officers will be permitted to make extra after tax contributions on a voluntary basis.

The maximum 10% employer contribution rate will continue to apply to those making a pre-tax contribution of at least 5.3% or a post-tax contribution of at least 4.5%.

The other main proposal in the Bill seeks to implement the proposal to increase from 10% to 11% the rotating shift allowance multiple recognised under the Police Superannuation Act 1990 in respect of contributors to the Police Pension Scheme who hold the rank of senior sergeant or a lower rank who at any time during the contribution period were rostered to work on day, afternoon and night shifts (or on any two of those shifts) on a rotating basis.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Police Superannuation Act 1990

4—Amendment of section 4—Interpretation

This amendment increases from 10% to 11% the percentage to be applied in determining increased contributions and benefits of the actual or attributed salary of a contributor who, at any time during the contribution period, was rostered to work on day, afternoon and night shifts, or on any 2 of those shifts, on a rotating basis. The provision only applies in relation to contributors holding the rank of senior sergeant or below.

Part 3—Amendment of Southern State Superannuation Act 2009

5—Amendment of section 3—Interpretation

This clause inserts a definition of salary sacrifice contribution.

6—Amendment of section 5—Employer contribution percentage

This clause amends section 5(3) of the Act to provide that a prescribed member who makes salary sacrifice contributions at a rate of at least 5.3% is entitled to an employer contribution of 10% or a percentage equal to the charge percentage applicable to the employer of the member under the Commonwealth Act, whichever is the greater. A prescribed member may, in addition, make contributions under section 20 at a rate of at least 4.5%. A prescribed member is defined as a police member (other than a police cadet or a police officer employed on a contract having a fixed term) or a member or members of a class prescribed by regulation.

7—Amendment of section 20—Contributions

Section 20(1)(b) of the Act provides that a police member must make contributions to the Treasurer as a deduction from salary at a rate that equals or exceeds the percentage prescribed by regulation. This clause amends section 20 so that a police member who is making salary sacrifice contributions at a rate of at least 5.3% need not comply with section 20(1)(b).

8—Amendment of section 21—Payments by employers

This clause inserts a new subsection 21(2) in order to require employers to make payments on behalf of members who make salary sacrifice contributions.

9—Amendment of Schedule 1—Transitional provisions

The amendments to this provision are consequential on amendments in clause 6 of the measure, and will extend the guarantee of minimum benefits provided under the transitional provisions (which are determined in accordance with the regulations) to former members of the Police Superannuation Scheme who are making salary sacrifice contributions under the Triple S Act in accordance with the requirements of the provision.

Debate adjourned on motion of Mr Gardner.