PSSap: Public Sector Superannuation accumulation plan
Overview of PSSap
PSSap is a scheme in which customers and employers contribute to the fund, and investment returns are calculated as a compound average rate of return, after fees and taxes have been deducted. It was established on 1 July 2005 by the PSSap Act. PSSap is open to eligible employees of participating employers, who contribute 15.4% per annum on behalf of their employees. Since 4 December 2017, customers who meet qualifying criteria have been able to contribute to the scheme after leaving public sector employment.
PSSap also offers an ancillary membership to eligible CSS and PSS customers who can make additional contributions and transfers, and an account-based pension product known as CSCri (Commonwealth Superannuation Corporation retirement income), to eligible public sector scheme customers.
Figure 15. Number of PSSap customers over five years
Note: Figures are at 30 June of each year.
PSSap customers can make before-tax and after-tax voluntary contributions.
Figure 16. PSSap customer contributions over five years
Note: Ancillary accounts are excluded. The 2018-19 Annual Report incorrectly reported these amounts. All previous years’ data for this figure have been corrected here.
Ancillary contributions can be made by contributing CSS and PSS customers, by creating a PSSap ancillary account. Their PSSap benefit has unit prices applied in line with the investment returns of the scheme and their PSSap benefit does not affect their CSS or PSS benefit in any way.
Ancillary accounts have been available since 1 July 2013.
In 2019–20, almost $88.2 million in ancillary contributions (in the form of salary sacrifice, personal (after tax) contributions, spouse contributions, income protection contributions and super transfers) were made, compared to $99.3m in 2018–19.
PSSap customers employed by a participating PSSap employer receive 15.4% employer superannuation contributions. PSSap customers not employed by a participating PSSap employer receive contributions in line with their employment contract.
Figure 17. PSSap employer contributions over five years
The two most common reasons for the pay out of superannuation benefits from the PSSap fund are for retirement and for consolidation of funds into another superannuation fund.
Figure 18. PSSap withdrawals
Note: Figures include Ancillary accounts.
CSCri is an account-based pension product offered to public sector scheme customers.
Figure 19. Number of CSCri customers over five years
Note: Figures are at 30 June of each year.
Lump sum amounts can be rolled into CSCri, generating regular income payments to customers in retirement, or in their transition to retirement.
Figure 20. Amount rolled into CSCri
Figure 21. CSCri pension payments and lump sum withdrawals
Default Death, Total Permanent Disability (TPD) and Income Protection (group insurance) cover is automatically provided to customers provided they are over 25 years or their account balance is over $6,000; customers may choose to opt out.
From 1 April 2020, group insurance cover is provided to PSSap customers on an opt-in basis if they are under 25 years or their account balance is below $6,000.
This insurance cover offered through PSSap is called lifePLUS. Customers may apply to vary, increase, decrease or cancel their lifePLUS cover at any time.
lifePLUS offers both lifePLUS auto cover and lifePLUS choice cover. lifePLUS and all other insurance cover for PSSap customers detailed in this report is provided by AIA Australia Limited (ABN 79 004 837 861, AFSL 230043).
Death and TPD
lifePLUS provides a lump sum payment in the event of death or TPD. The level of automatic cover varies depending on a customer’s age, unless a fixed cover is in place. If a fixed cover is in place, the customer receives that level of cover until the cover ceases or it is cancelled by the customer.
Customers may select insurance cover for both death and TPD, or for death only.
Table 34. TPD claims in PSSap
TPD claims assessed
Income protection insurance provides a monthly income stream, paid in arrears. The income stream provides (by default) 90.4% of an eligible customer’s base salary. If a customer is unable to return to work due to a disability caused by sickness or injury, 75% of this amount is paid directly to the customer and 15.4% is paid into the customer’s PSSap account, for up to two years; 65.4% of a customer’s base annual salary is then paid for a further three years, with 50% paid directly to the customer and 15.4% paid into their PSSap account.
Table 35. Income protection claims in PSSap
IP claims assessed
Complaints from PSSap customers
There has been a steady reduction in complaints from PSSap customers during the last two financial years. Insurance-related complaints also declined in 2019–20, though they are still the leading topic with 113 complaints received. These were predominantly due to processing delays, insurance policies and cancellation of cover.
Legislative changes affecting insurance policies in the latter half of 2019–20 attributed to a decrease in complaints related to automatic insurance cover.
Other common complaint topics from PSSap customers included benefit payments and superannuation contributions.
Table 36. Complaints received from PSSap customers
CSCri complaints have decreased in the last two financial years. Complaints related to dissatisfaction with a process, such as paying a benefit, consolidating accounts or applying an investment option switch.
Table 37. Complaints received from CSCri customers
Changes to PSSap’s legislation and Trust Deed
The Superannuation Amendment (PSSAP Trust Deed – Superannuation Salary) Instrument 2020 amended Rule 2.2.3 of the Public Sector Superannuation Accumulation Plan Trust Deed. The amendments enabled determinations made by the Public Service Minister and Agency Heads under section 24 of the Public Service Act 1999 to preserve a PSSAP customer’s superannuation salary as ordinary time earnings (OTE) when they are moved to an APS Agency on or after 1 February 2020, as a result of a machinery of government change, if their superannuation salary was OTE under an enterprise agreement immediately before the move.