There has been much media comment about the changes in funding arrangements to long service leave. These budgetary arrangements will have no impact on members' entitlements or their ability to access their leave.
In relation to superannuation the budget has made no changes to the accumulation scheme which most public sector workers are members of.
Longer term public servants may be members of the defined benefit scheme. In relation to this scheme the government has announced a five-year defined "contribution holiday" but any changes to the employer contributions cannot change members' superannuation benefits under this scheme as they are defined benefits. The only risk of the "contribution holiday" relates to the risk of the currently fully funded scheme having less funds invested than what is required to actuarially cover members' entitlements. If this happens members' entitlements will still be guaranteed as they are in every other defined benefit scheme in Australia, none of which are currently fully funded.
Irrespective of the fact that members' entitlements are guaranteed I believe that it is in members' best interests that the scheme remains fully funded and I believe that the proposed five-year "contribution holiday" may be too long. We need to see the full actuarial assessment of the scheme and monitor the impact of the "contribution holiday" on an annual basis to ensure that the scheme remains in surplus. We will be aggressively seeking a review of this proposal since five years is too long to be complacent about such an important matter as protecting entitlements.
I have spoken to the representatives of the Katter Australia Party, the key cross-bench parliamentarians, this morning about what options might be able to be developed to ensure an appropriate parliamentary oversight of the actuarial assessment of the scheme on an annual basis during the five year "contribution holiday".
Members may have also received an email from the Under Treasurer today which states "this scheme was closed to new members in November 2008 and is due to effectively cease in 2035 when the last of these members are expected to retire." I have spoken to the Under Treasurer this morning to confirm our understanding that the scheme will continue in operation for as long as there are members of the scheme who continue to work as public servants. It is the union's belief that the scheme cannot be closed for existing members and we have sought written confirmation from the government on this point. I believe that the reference to 2035 was in reference to the timeframe of the actuarial assessment.
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