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House of Assembly - Fifty-First Parliament, Second Session (51-2)
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STATUTES AMENDMENT (POLICE SUPERANNUATION) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 24 October 2007. Page 1292.)

Mr GRIFFITHS (Goyder) (12:09): It is my pleasure to indicate that I am the lead speaker on this bill. We note that it was introduced by the Treasurer on 24 October, and I thank Mr Deane Prior, who provided me with briefings on this matter on 5 November and 20 February, when additional amendments were also flagged. Mr Prior was very willing to talk in detail about the bill and the subsequent amendments, and I found his conversation with me interesting and very informative, as it always is.

Based on the detail provided in the briefing, I have concluded that it is not necessary to go into committee to discuss the intent of the individual clauses. The Liberal opposition recognises very strongly the dedicated and often dangerous work done by generations of police in South Australia, and we congratulate them on that. In my life I have had the pleasure of knowing many officers who have worked in the communities in which I have lived, and they have all been outstanding people who deserve every level of support they can possibly receive from government and the community at large.

We support this bill, which is designed to improve the superannuation benefits available to not only the 380 remaining members of the police lump sum superannuation scheme but also all police, whom we are offering options such as investment choice and spouse accounts. While the opposition has had some time to consider the bill, I think there were some 23 amendments flagged as recently as three weeks ago. I have considered and discussed them again, and we support those.

This bill is clearly a step forward. While the usual thought might be that a reduction in the number of superannuation schemes servicing the needs of police could be negative, in this case it is clearly a positive move. The bill reduces the number of police-dedicated superannuation schemes from three to two but, importantly, for those 380 members of the lump sum super scheme (a defined benefit scheme that was closed to additional membership in 1994), it transfers them to the Triple S scheme, an accumulation scheme, and the opportunity of retiring with a far greater sum does exist.

The accumulation superannuation schemes come with no guarantee, and the recent sharemarket tumble—which resulted, as of yesterday, in a 21 per cent drop in the Australian stock market since Christmas—emphasises this more than anything. Accumulation schemes rely upon returns on investments, but history has shown over the past 10 years that significant gains—certainly far more than CPI or wage increases—can be achieved. Indeed, the Treasurer, in the answers he provided yesterday during question time, referred to Funds SA returns over the previous five years as being 12.9 per cent for the balanced product and 13.8 per cent for the growth fund. These are good results which are, I believe, above industry averages.

While I said that accumulation schemes normally come with no guarantee, in this case a guarantee is actually provided to the 380 members of the lump sum scheme, in that they will be assured of having a superannuation entitlement upon retirement of at least the minimum of the lump sum benefit—and, hopefully, with periods of renewed vigour in the stock market and greater returns to superannuation investments, a far greater return.

This is a good deal and one that would not normally be offered; however, it is a decision which reflects the level of respect this parliament, and I would hope the South Australian community, holds for the South Australian police force. I recognise that the decision may come at a financial cost to the taxpayer in providing the guarantee if a period of negative returns continues, and we have people who are retiring within the near future but, again, it is a positive step forward.

Briefly, the additional amendments flagged to me several weeks ago were designed to pick up the following points:

there are actually seven children out there who are receiving a pension as a result of their parent, who was a police person, dying on the job;

to incorporate the opportunity for other emergency services groups to become part of the Triple S scheme at a later date;

the need to ensure that the previous levels of personal contribution are maintained at the level they were within the lump sum scheme, so as to ensure that the guarantee of the minimum payment for lump sum scheme is provided; and

the default investment option. I was advised by Mr Prior, in that case, that the Police Superannuation Board, which controlled the investment strategy of the lump sum scheme, used a default option that actually had a high degree of risk attached to it. The default option for the Triple S Scheme is more balanced, with the chance of a negative return far reduced. Again, I am advised by Mr Prior that some 90 per cent of Triple S scheme members choose to keep their investment entirely within the default option, so this is an important option.

I wish to confirm again that there is no need to go into committee to consider the bill. The timing of the bill did leave me with some initial thoughts that it may be part of the wage negotiations between the government and the Police Association, and the Treasurer may choose to comment on that. In the two conversations I had with Mr Andy Dunn, secretary of the Police Association of South Australia, he was very insistent to me that there was no need for amendment. That position was put to the Liberal opposition and supported.

It was interesting to note, in the December version of The Police Journal, that the second reading speech of the Treasurer was included in full. I think that indicates that an extensive level of consultation has been undertaken with the police and those who are affected by it. With those brief words, I indicate the support of the Liberal opposition. I think a few others will choose to support this bill.

Mr VENNING (Schubert) (12:15): We are very keen on this side of the house to partake in the debate. I always rise to speak to matters involving the police because I have a lot of respect for them, as I think most MPs do. Speaking as a country MP, we work very closely with the police and, in the Barossa Valley, I have—

The Hon. M.J. Atkinson: I hope you are not implying that they are corrupt, as you did in question time recently.

Mr VENNING: Incredible. This is the Attorney-General recalling a comment.

The Hon. M.J. Atkinson interjecting:

The DEPUTY SPEAKER: Order!

Mr VENNING: I did cover the remark straightaway by public explanation after what I said. I can't remember—it was that long ago. Anyway—

The Hon. M.J. Atkinson interjecting:

Mr VENNING: What an inane interjection! In Nuriootpa, I have the Barossa Yorke local service area police—

The Hon. M.J. Atkinson interjecting:

The DEPUTY SPEAKER: Order!

Mr VENNING: This is the Attorney-General. He is supposed to be an example to others and to new members of the house.

The Hon. M.J. Atkinson: I've got your correspondence.

The DEPUTY SPEAKER: Order! Attorney, please cease interjections.

Mr VENNING: Can you say it first so that I can get on with my job? Have you finished?

The DEPUTY SPEAKER: The member for Schubert, please resume.

Mr VENNING: I will start again. The Barossa Yorke local service area police station is in Nuriootpa in my electorate. I have a very good liaison with those police officers, who do a fantastic job, and I pay them the utmost respect, despite what the Attorney just said, and history will show what I actually did say.

This amendment bill will deliver to police officers a real possibility of having a larger superannuation benefit upon retirement and a super fund with more options. Police deserve a healthy super fund; they make our communities safer and they often work in dangerous conditions. I do not think anybody in this house would decry police officers receiving a very good return because a lot of us would not want their jobs. They are out there in the middle of the night working shifts. They go to accidents and other unpleasant situations. They come to our homes to deliver bad news. So, I do not decry it at all. Anything at all that we can do to help the police with their remuneration I think we should support. This will also streamline the super schemes that police officers are served by. Instead of having three schemes, they will have two. The Police Association is very pleased with this outcome. I pay tribute to the Police Association. We have had a long association with that organisation. It goes back a long way, right back to the time of Sam Bass when, as a member of this house, he had a very close liaison with the Police Association.

In 2004 I moved a motion in this house to allow for the expansion of the criteria for awarding the South Australian Police Medal. That motion was testament to the admiration and praise I have for the South Australian police force and it was carried. I moved that motion mainly because a new medal had been struck for our police. We have some of them here today serving us well as they always do, and I feel very safe when they are here. When this medal was struck, it was started on a certain date, and all those police officers who served before that date missed out. So, I took this on for all officers who served prior to that date, and I believe it was fixed so that all those who were eligible and who fitted the criteria got the medal. I was very pleased about that.

This legislation ensures that no matter what the returns of the Triple S scheme, police who transfer will receive a benefit at least equal to that which they held in the now closed lump sum scheme. This is a good deal. Police officers play a pivotal role in our community. They do a great service usually way outside the bounds that they are paid for and they deserve a superannuation scheme that reflects this.

As I said, I have a lot of time for the police; a lot of work that they do goes totally unrecognised and unrewarded. This is an opportunity to recognise their importance and to give them a more rewarding superannuation scheme. I fully support the amendments to the Police Superannuation Scheme. I also pay tribute to the police in my area who work within the community, some at the old Blue Light Disco. I belong to a Lions Club, five members of which are from the police force, and it is great to fraternise with them socially. You can get an understanding of the hassles they have with housing. They put up with the housing that we give them all over the state.

The Hon. M.J. Atkinson interjecting:

Mr VENNING: Here we go again—the Attorney has done a full circle. I am fully supporting them, because the police officers are my friends and they give me very good advice. I do support the legislation and, again, pay the highest tribute to our men in blue.

An honourable member: And women!

Mr VENNING: And women.

Mr PISONI (Unley) (12:21): I rise to support this legislation. It is a pity that the Attorney-General does not support the police as he claims to support them. He is sitting in the chamber with the sole purpose of interjecting. His pastime is to interject when members are speaking, rather than taking this legislation seriously. He sits there interjecting and handwriting envelopes. Is that excessive compulsive or what? Doesn't he have work to do catching criminals? For heaven's sake, go and do it.

The Hon. K.O. FOLEY: On a point of order, the member is so far off the content of the bill it is not funny. I ask that he come back to the substance of the legislation before us.

The DEPUTY SPEAKER: Yes, I uphold the point of order. The member will address the content of the bill.

Mr PISONI: The important thing here, of course, is to ensure that police officers are looked after in their retirement. We hope that this ensures that police officers do see the police force as a lifelong career. It is also important that members of the police force are part of their local community. Policing is a profession that is very highly regarded. It can become a generational career that is handed from father to son and/or daughter. It is not unusual to see a third or fourth generation police officer in the force.

It is important to have a superannuation scheme that attracts members and makes them want to stay in the force. Officers learn some extraordinary skills in the police force and, of course, those skills are very sought after by the private sector. There will always be those who, having entered the police force, learn skills and develop an entrepreneurial flair. I do not think there is anything we can do to stop losing that type of police officer from the force. However, certainly we want to ensure that the police officers who are there for the long haul, learning these skills and teaching them to our new officers, have something to look forward to in retirement. I support this bill for that reason.

An earlier point I made was that community policing really is an effective way of policing in South Australia, particularly in my community. I would like to relay an experience I had last year. There was a situation where, every Wednesday night at 9 o'clock, eggs were thrown at the house of a couple who lived in Unley Park: their house was egged. Of course, that was very frustrating for them. They reported it to the police but, unfortunately, there was not enough information provided, and no registration number or description of the car used. However, this very diligent victim managed to photograph the car and numberplate.

The bottom line was that they came to see me and we made an appointment to see a very experienced officer at our local police shop, if you like. It is a very under-resourced police shop in Unley, I must say, but the police officers there do a very good job. However, they could certainly do with some additional resources. We found out who the owner of the car was, who happened to be a distinguished businessman in the area. He had no idea that his son was using his car at 9 o'clock on Wednesdays to pick up his mates to go bowling or to volleyball, or something like that.

One of the mates lived behind this particular house and the people were in the middle of a back fence dispute. So the lad, who was related to the couple living behind the victims who were having their house egged, took it upon himself to try to resolve the fencing situation with a slight form of intimidation, I suppose you could say, that is, by egging the house.

The Hon. M.J. Atkinson interjecting:

Mr PISONI: It was shocking, Attorney-General. Obviously these kids were making a mistake, an error of judgment. If the Attorney-General had his way we would send them off to the gallows. That is the way he likes to deal with confused young kids. Bang them up. Be tough on crime. It does not matter what their situation is. For their first mistake throw them in with the rest of the crims so they can do their apprenticeship in gaol. That is the way the Attorney-General likes to deal with it.

The impressive thing about the way this was dealt with was that a very experienced senior policeman in my electorate said, 'I will deal with this in the old police style.' Basically, he contacted the kid involved and contacted the parents—who, of course, were extremely embarrassed—and the egging stopped and a cheque was handed over to the victims for the cleaning up of the egging. It was a very good result, and only achieved, of course, because of community policing and an experienced police officer who knew he could deal with the situation. Of course, the kids did not get off scot-free. They had to face their victims and see the distress being caused by their actions. After that, I believe they understood that they had made a mistake and caused enormous distress to this couple. Their parents were made aware of the situation and could deal with it, and these kids learnt from that and, of course, will now be better members of the community and contribute to the community in the longer term.

This is just an example I want to bring to parliament's attention to illustrate the importance of having long-serving and experienced police officers in our police force. I commend the bill.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (12:28): I thank members for their contributions. I appreciate the support of the opposition for this reform of the police superannuation bill. Again, I acknowledge the work of Deane Prior and his staff, and support within government. As always, the government has a very good working relationship with the police, and the police union in particular, in South Australia, and as a former police minister I enjoyed very much the robust nature of dealing with the people who run the police union in South Australia.

I think it should be acknowledged that we have Peter Alexander with us today. Peter is soon to retire as President of the Police Association, and I put on the public record on behalf of the government (I am sure I speak for all members) our appreciation for Peter's work in steering a very difficult union in terms of its responsibilities in the community. I am not sure I can speak for all police ministers in saying this, but I have enjoyed working with Peter. We have not always agreed but, eventually, we have found a common point. I wish Peter all the best in his retirement. Andy Dunn, of course, a very experienced secretary of the union, will continue in that role, I understand, and we look forward to working with the new president of the union.

The important point to be made, and echoing the comments made opposite, is that clearly the police play a very important role in South Australia, and it is the responsibility of governments to ensure they are properly resourced. Whilst it is always easy for oppositions (and perhaps we were guilty of the same, at times) to criticise governments for not having sufficient resources, can I restate on the public record that we have the largest police force ever in this state's history as a result of this government's policies, and we are in the process of recruiting a further 400 officers during the term of this government. We continue to ensure that our police are as resourced and remunerated as well as we can possibly afford. The recent resolution of the police enterprise bargaining agreement again attests to the fact that the government is prepared to work diligently with the police union to ensure that we properly remunerate our men and women in uniform. I thank the opposition for its support.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 8 passed.

Clause 9.

The Hon. K.O. FOLEY: I move:

Page 5, line 29 to page 6, line 38—

Clause 9, inserted clause 13A—Delete the clause and substitute:

13A—Investment option

(1) The Treasurer may, in accordance with this section, accept monetary payments from a contributor whose employment as a police officer has not terminated.

(2) A monetary payment under subsection (1) must consist of an amount sacrificed by the contributor from his or her salary in accordance with a contract, an award or an enterprise agreement that entitles the person to sacrifice part of his or her salary.

(3) The following provisions apply in relation to a payment made to the Treasurer under this section:

(a) the Treasurer must pay into the Southern State Superannuation (Employers) Fund from the Consolidated Account (which is appropriated to the necessary extent), or from a special deposit account established for the purpose, an amount equivalent to the payment;

(b) if the contributor is not already a member of the Triple S scheme—the contributor will be taken to have elected to become a member of that scheme under section 15C of the Southern State Superannuation Act 1994.

Note—

Under section 27 of the Southern State Superannuation Act 1994, an employer contribution account maintained by the South Australian Superannuation Board in the name of a contributor who is taken under this subsection to have elected to become a member of the Triple S scheme will be credited with any amount sacrificed by the contributor from his or her salary.

Mr GRIFFITHS: I have received a detailed briefing on all these 23 amendments, I believe, 12 of which are consequential upon four key points that were identified. The opposition has no objection to any of the amendments, and supports them.

Amendment carried; clause as amended passed.

Clauses 10 to 31 passed.

Clause 32.

The Hon. K.O. FOLEY: I move:

Page 12—

Lines 5 to 12—

Clause 32(1), inserted section 7(1)(a)—Delete paragraph (a) and substitute:

(a) maintain a contribution account in the name of a member of the Triple S scheme who is making or has made contributions to the scheme; and

Lines 13 and 14—

Clause 32(1), inserted section 7(1)(b)—Delete 'or payments made by or for the person' and substitute:

made by the member

Amendments carried; clause as amended passed.

Clauses 33 and 34 passed.

Clause 35.

The Hon. K.O. FOLEY: I move:

Page 13, lines 25 to 35—

Clause 35, inserted section 15C(1)—Delete subsection (1) and substitute:

(1) A police officer who is a contributor to the Police Superannuation Scheme may elect, by notice in writing to the Board, to become a member of the Triple S scheme in order to establish an entitlement to the employer component of benefits under Part 5 by sacrificing part of his or her salary in accordance with a contract, an award or an enterprise agreement that entitles the person to sacrifice all or part of his or her salary.

Page 14—

Line 2—

Clause 35, inserted section 15C(2)—Delete 'subsection (1)(a)' and substitute 'this section'

Lines 9 to 14—

Clause 35, inserted section 15C(3)—Delete subsection (3)

Lines 23 and 24—

Clause 35, inserted section 15C(5)(b)—Delete 'in the case of a person who has elected, or is taken to have elected, to become a member under subsection (1)(a)—'

Amendments carried; clause as amended passed.

Clauses 36 to 41 passed.

Clause 42.

The Hon. K.O. FOLEY: I move:

Page 17, after line 2—

Clause 42—after subclause (2) insert:

(3) Section 25—After subsection (4) insert:

(4a) The regulations may require that specified members, or members of a specified class, contribute at a prescribed rate (and the regulations may prescribe different rates in respect of different members or different classes of member).

(4) Section 25(5)—Delete 'A member' and substitute:

Subject to this section, a member

Amendment carried; clause as amended passed.

Clauses 43 and 44 passed.

Clause 45.

The Hon. K.O. FOLEY: I move:

Page 17—

Lines 11 and 12—

Clause 45(1), inserted text—Delete '15C(1)(a)' wherever occurring and substitute in each case:

15C

Lines 16 and 17—

Clause 45(3), inserted text—Delete '15C(1)(a)' wherever occurring and substitute in each case:

15C

Lines 19 and 20—

Clause 45(4), inserted text—Delete 'or section 15C(1)(b) (or any combination of these provisions)' and substitute:

(or both)

Amendments carried; clause as amended passed.

Clauses 46 to 51 passed.

Clause 52.

The Hon. K.O. FOLEY: I move:

Page 19—

Line 12—

Clause 52(2), inserted clause 15(4)—Delete 'The balance' and substitute:

Subject to subclause (6a), the balance

Lines 28 and 29—

Clause 52(2), inserted clause 15(4)(a)(ii)—Delete 'equivalent to the actuarial earnings assumption' and substitute:

based on the actuarial assumptions

Page 20—

After line 4—

Clause 52(2), inserted clause 15—After subclause (4) insert:

(4a) In calculating a member's entitlement under section 21 of the Police Superannuation Act 1990 for the purposes of subclause (4)(a) or (b) of this clause, any salary increase applicable to police officers generally, or to a class of police officers to which the member belongs, that is to commence within 1 month of the prescribed date, is to be taken into account when determining the member's actual or attributed salary.

After line 15—

Clause 52(2), inserted clause 15(5)—After paragraph (b) insert:

(c) however—

(i) if the balance of an investment account maintained by the Police Superannuation Board in the name of the member immediately before the prescribed date includes an amount attributable to salary sacrificed contributions and investment earnings on those contributions (a salary sacrifice amount), the salary sacrifice amount will be credited to the employer contribution account established by the Board in the name of the member pursuant to subclause (2) (and will not be included in any aggregation for the purpose of determining a balance under paragraph (b)); and

(ii) if the Police Superannuation Board is not maintaining a rollover account or a co contribution account in the name of the member, and the balance of the member's investment account consists only of a salary sacrifice amount, paragraphs (a) and (b) do not apply.

Lines 22 to 29—

Clause 52(2), inserted clause 15(6)(b)—Delete paragraph (b) and substitute:

(b) subject to subclause (6a), the balance of the rollover account, on the establishment of the account under this clause, will be an amount determined by—

(i) calculating the total benefit (having regard to both preserved superannuation benefits and any preserved superannuation payment) to which the member would be entitled, in accordance with the provision of the Police Superannuation Act 1990 pursuant to which the benefits or payment were preserved, if payment of the benefit were to be made to the member immediately before the prescribed date; and

(ii) determining the present value of the benefit calculated under subparagraph (i) by applying to the period falling between the prescribed date and the date on which the member is to reach the age of 55 years a discount rate based on the actuarial assumptions underlying the most recent report prepared by an actuary under section 15(4) of the Police Superannuation Act 1990;

After line 32—

Clause 52, inserted clause 15—After subclause (6) insert:

(6a) If the balance of an account established for the member under this clause is to be determined under subclause (4) or (6)(b), and the balance of the account on its establishment, as determined in accordance with the relevant provision, would, but for this subclause, have the effect of creating a liability for the Treasurer under the Commonwealth Act, that balance is to be increased by the minimum amount necessary to avoid creating the liability.

After line 37—

Clause 52(2), inserted clause 15—After subclause (7) insert:

(7a) The member will be taken for the purposes of section 25 to have made an election under subsection (1) of that section to make contributions to the Treasurer as a deduction from salary at the prescribed percentage (but he or she may subsequently elect under section 25(5), subject to that section, to contribute at a different rate).

Line 38—

Clause 52(2), inserted clause 15(8)—Delete 'The member is entitled, on his or her retirement from employment (within the meaning of section 31),' and substitute:

If the member makes contributions to the Treasurer as a deduction from salary under section 25 at the prescribed percentage until his or her retirement from employment (within the meaning of section 31), he or she is entitled, on that retirement,

After line 44—

Clause 52(2), inserted clause 15—After subclause (8) insert:

(8a) For the purposes of subclauses (7a) and (8), the prescribed percentage is a percentage equal to the rate at which the member was required to contribute under the Police Superannuation Act 1990 immediately before the prescribed date.

Page 21, after line 42—

Clause 52(2)—After inserted clause 16 insert:

16A—Children in receipt of pension

(1) If a person is, immediately before the prescribed date, an eligible child in receipt of a pension payable under section 26 of the Police Superannuation Act 1990 (the repealed section), the pension will continue to be paid to the child throughout any period of dependency as if that Act had not been amended by the amending Act.

(2) Despite section 14 of the Police Superannuation Act 1990, a pension to be paid under the repealed section pursuant to this clause is not to be charged against the Police Superannuation Fund.

Page 22, after line 15—

Clause 52(2), inserted clause 17(1)—After paragraph (b) insert:

(ba) however—

(i) if the balance of an investment account maintained by the Police Superannuation Board in the name of the person immediately before the prescribed date includes an amount attributable to salary sacrificed contributions and investment earnings on those contributions (a salary sacrifice amount), the salary sacrifice amount will be credited to an employer contribution account established by the Board in the name of the person (and will not be included in any aggregation for the purpose of determining a balance under paragraph (b)); and

(ii) if the Police Superannuation Board is not maintaining a rollover account or a co contribution account in the name of the person, and the balance of the person's investment account consists only of a salary sacrifice amount, paragraphs (a) and (b) do not apply;

Page 24, after line 44—

Clause 52(2)—After inserted clause 19 insert:

19A—Investment of transferred money

For the purposes of determining a rate of return under section 7A or 27 in respect of an account established by the Board as required under this Part, the Board and the Corporation must, on the establishment of the account, determine the relevant class of investments, or combination of classes of investments, on the basis that the member for whom the account has been established has not made a nomination under the relevant section (although the member may, subject to the Act, subsequently nominate a different class of investments, or combination of classes of investments, for the purpose of determining a rate of return).

19B—Administration costs associated with transition

The costs associated with—

(a) determining the balances of accounts under the Police Superannuation Act 1990; and

(b) establishing, and determining the balances of, new accounts under this Act; and

(c) transferring Police Superannuation Scheme contributors to the Triple S scheme; and

(d) any other administrative act required under, or necessary or expedient for the purposes of, this Part,

will be recoverable from the Police Superannuation Fund.

Amendments carried; clause as amended passed.

Schedule and title passed.

Bill reported with amendment.

Third Reading

Bill read a third time and passed.

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