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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-06-19 Daily Xml
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ELECTRICITY INDUSTRY SUPERANNUATION SCHEME

The Hon. R.I. LUCAS (16:36): I move:

That this council—

1. Notes the concern of pension scheme members regarding the Electricity Industry Superannuation Scheme (EISS) and the set of documents providing the basis of that concern provided to members of parliament by the organisation SA Superannuants and Mr Richard Vear, a pensioner of EISS;

2. Refers the following matters and their associated administrative acts to the Ombudsman, pursuant to section 14 of the Ombudsman Act 1972, for investigation and report on the EISS method for calculating its taxed-source pensions and compliance of that method with the Electricity Corporations Act 1994 (as modified by the Electricity Corporations (Restructuring and Disposal) Act 1999)—

(a) probity of processes resulting in a letter dated 7 June 2002 addressed to the then under treasurer being received by the Department of Treasury and Finance and accepted as coming from the EISS board to advised that the board supported and recommended rule changes for EISS developed by the financial services firm Mercer;

(b) probity of processes resulting in receipt by the Department of Treasury and Finance of the Mercer explanatory memorandum dated 27 June 2002, which is a document that has been cited as providing evidence that the method for calculating EISS taxed-source pensions had no effect on employer costs;

(c) inconsistency between the claim made in the Mercer explanatory memorandum of 27 June 2002 that EISS rule changes would have no effect on employer costs and analyses contained in the Mercer reports of 1998 and 2004 showing that the rule now being used by EISS to calculate its taxed-source pensions would reduce employer costs if applied to pensions of the state pension scheme;

(d) probity of the decision to provide only the explanatory memorandum of 2002 and not the Mercer reports of 1998 and 2004 to the Crown Solicitor when advice was sought on compliance of the method with the Electricity Corporations Act 1994;

(e) probity of advice and recommendations of the Department of Treasury and Finance to the EISS board and the then treasurer, Kevin Foley, in connection with his authorisation of use of the method in June 2002 and to both Mr Foley and the Minister for Finance, Hon. Michael O'Brien MP, in connection with representations about the validity of the method that have since been made by SA Superannuants and Mr Richard Vear;

(f) whether the method used to calculate EISS taxed-source pensions has reduced employer costs for those pensions compared to what the cost would be if the pensions had continued as untaxed-source pensions;

(g) whether the method complies with the Electricity Corporations Act 1994 including schedule 1, part F, clause 11: Treasurer may vary rules in relation to taxation, subclauses (1) and (2); and

(h) any other relevant matter.

3. Resolves that, in all the circumstances of the case, administrative acts associated with these matters warrant investigation by the Ombudsman despite the availability of any alternative appeal, reference, review or remedy of the passage of time since SA Superannuants and Mr Richard Vear had notice of the administrative.

This will probably be the only speech that is shorter than the length of the motion. A similar motion was first moved by me on behalf of Liberal members on 5 September 2012, and it was either unanimously passed or no-one opposed it on 17 October 2012.

Since that time there has been ongoing discussion between the stakeholders who raised their particular concerns in the first place and the Ombudsman. The Ombudsman had some concerns about the drafting of the original motion. As a result of all those ongoing discussions, the member for Davenport, in consultation with the stakeholders, has constructed a new motion which we are hopeful, if passed by this Legislative Council, the Ombudsman would agree is in a form acceptable to him to enable him to conduct the inquiry that has been outlined.

Our understanding is that if the Legislative Council does approve this amended referral, the Ombudsman will then seek crown law advice regarding the wording and his powers under his legislation and, as I said, we are hopeful that this would enable the Ombudsman to conduct the sort of inquiry the Legislative Council envisaged late last year when it passed the original motion.

So, for the reasons I previously outlined late last year on 5 September, whilst the motion is slightly amended in a number of areas, the purpose of this amended motion is exactly the same as the motion that was moved in September last year, and I urge support of the amended referral or the new referral to the Ombudsman.

Debate adjourned on motion of Hon. K.J. Maher.

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