SOUTHERN STATE SUPERANNUATION BILL

Second Reading

Adjourned debate on second reading.

(Continued from 12 May 2009. Page 2256.)

The Hon. DAVID WINDERLICH (12:48): This is really a straightforward bill in its intention. It is essentially to simplify legislation and to transfer more of the prescriptive rule-making to subordinate legislation. I will be supporting the bill but I will be seeking to amend it, essentially to give public servants a choice as to which super fund they use. Public sector employees, like any other, deserve to have a choice as to how they should best invest their employer superannuation contributions. At present, there are more than 32,000 contributing members of the Triple S scheme and a further 71,000 non-contributing members.

Public servants, like anyone else, should have the choice to invest in the Triple S scheme if they are convinced that is the best option for them. If it is not in their best interests they should not be compelled to be a member. The benefits would be a more competitive superannuation scheme, and by that I mean either or both a better service and a lower cost. Currently, with a government monopoly on public superannuation, public sector employees' interests are not served.

My amendments will give an opportunity for members to opt out, and that would force the current fund to be more competitive. This is in the best interests of public servants. The Super SA website states that the scheme aims to provide adequate and better than average returns. No doubt many public sector employees would not be happy to hear that their superannuation fund only aims to be above average, especially when contributions to that fund are compulsory.

Employees who have entered the Public Service from the private sector are caught in a trap whereby their private sector superannuation fund may be clearly outperforming Super SA, but they are still forced to invest their retirement savings fund with Super SA. Meanwhile, if the employee does not want to close their performing private sector account, they are forced to maintain administration fees on multiple accounts.

Likewise, concerns have been raised that the investment choices available for members are limited, which means that members do not have the choice of investing their super in a fund that entirely supports ethical investment. This amendment would give public servants that choice. I note that the Hon. Mark Parnell has been campaigning for some time on providing greater choice within Super SA for ethical investment options. An alternative approach to solving this problem is to do what I have just described, which is to enable members of those funds to opt out and choose another fund which is superior on ethical investment grounds.

The federal government provides a scheme for its members called the Public Sector Superannuation Accumulation Plan. Employees at a federal level have a choice. The federal government provides an incentive by way of offering contributions at 15.4 per cent rather than the usual 9 per cent, making the fund both competitive and a strong investment choice. The state equivalent provides no such incentive, instead forcing employees to sign up to a scheme which is not always competitive. In the absence of such an incentive employees, as per their federal counterparts, should be given the choice.

Under my amendments, the Triple S scheme would still be the default scheme. This amendment allows public sector employees to opt out once an alternative fund has been nominated. The clause proposed will allow members of the South Australian public sector to nominate a fund of their choice, whether it be the Triple S scheme or otherwise. I support the second reading of the bill, but I will be moving amendments along the lines I have just described.

Debate adjourned on motion of Hon. Carmel Zollo.

[Sitting suspended from 12:52 to 14:17]