Overview of PSS

PSS is a public sector scheme established on 1 July 1990 by the PSS Act. It closed to new customers on 30 June 2005. PSS is a defined benefit scheme where benefits derive from customer and employer components.

The customer component consists of customer contributions and fund earnings. The employer component comprises employer productivity contributions (plus fund earnings), and the unfunded ‘benefit balance’, which is determined when a customer leaves eligible employment.

On retirement, customers can usually convert 50% or more of their final benefit accrual to a lifetime non-commutable indexed pension, paid by the Australian Government. Any remaining balance, as well as any transfer amounts, will be paid as a lump sum.

PSS membership

Figure 6. Number of PSS customers over five years

Contributions

Customers can contribute up to 10% of their super salary. Contributions are paid from after-tax income. Customers can also make voluntary contributions into PSSap (see PSSap: Public Sector Superannuation accumulation plan).

Figure 7. PSS customer contributions over five years

Employer contributions

Employers pay a fortnightly productivity contribution into PSS. The amount is based on the customer’s super salary. The employer component is notional and is determined when a customer ceases contributing to the scheme.

Figure 8. PSS employer productivity contributions over five years

Pensions and lump sums

In most cases PSS benefits are paid when a customer exits the scheme at retirement. Benefits usually cannot be paid until minimum retirement age is reached and the customer has permanently retired from the workforce. Benefits may also become payable if the customer is retrenched, becomes totally and permanently incapacitated, or dies.

Figure 9. PSS pension payments over five years

Invalidity and death benefits

PSS provides invalidity and death benefits. Customers can purchase additional death and invalidity cover, subject to meeting underwriting requirements.

Benefits are based on the entitlement the customer would have received if they had worked to age 60, subject to any benefit restrictions. Benefits at age 60 or older are based on the account balance at the date of retirement or death. Benefits may also be payable for customers with preserved benefits. However, these will be based on the value of the preserved benefit and do not include prospective service.

Table 29. New invalidity pensioners in PSS

Note: This table shows the number of new invalidity retirement certificates issued in the relevant reporting year (not the total number of invalidity pensioners).

Partial invalidity

A partial invalidity pension – a form of income maintenance – is paid when a customer’s salary is permanently reduced for health reasons.

Table 30. Partial invalidity pension applications in PSS

Note: This table shows assessed applications including retrospective applications in the relevant reporting year. The number of partial invalidity applications was incorrectly reported as 10 in the 2017-18 CSC Annual Report.

Complaints from PSS customers

The number of complaints received from PSS customers increased significantly in 2019–20 compared to the previous financial year. Primary reasons for complaints were policy, legislation, communication, investments and process failures. PSS customers also complained about the inability to roll money to other funds and access to online services. A small number of complaints were received from PSS customers related to the release of funds under the Government’s COVID-19 Early Release program.

Table 31. Complaints received from PSS customers

Changes to PSS’s legislation and Trust Deed

The Public Sector Superannuation Scheme Trust Deed was amended by the Superannuation Amendment (PSS Trust Deed) Instrument 2019. The amendments made changes standardise and modernise the eligibility criteria for child reversionary pensions. The amendments commenced on 1 January 2020.