Media Release

80/2009
26 November 2009

Government Superannuation Reforms

The Minister for Finance and Deregulation, Lindsay Tanner today announced further reforms to improve the administration arrangements of Australian Government superannuation schemes.

Lindsay Tanner said:  “Over the past two years, the Rudd Government has been reforming governance and administration of Government superannuation schemes to ensure they are best placed to deliver more sustainable and cost-effective services.”

“This ongoing reform program includes several initiatives to streamline arrangements and practices without affecting member’s benefits or entitlements.”

The Department of Finance and Deregulation, with specialist assistance provided by PricewaterhouseCoopers, completed a comprehensive review of the current administration arrangements relating to the main civilian and military schemes, including long-term IT requirements for administration of the schemes.

The review found that the current Public Sector Superannuation Accumulation Plan (PSSap) administrative arrangements can be delivered more cost effectively by accessing the available competitive market.  As such, the Rudd Government will outsource the administration services of PSSap which is estimated to save taxpayers $5 million annually.
 
Lindsay Tanner said:  “Outsourcing arrangements are expected to be implemented by July 2011, delivering savings and enabling ComSuper to focus on improving administration of the larger and more complex defined benefit schemes.”

The outsourcing of PSSap is not expected to have an immediate impact on ComSuper staff given the lead time and ComSuper will work to minimise any impact on staff.

The Government will invest $22.4 million of the savings in reforms to improve member superannuation data, IT infrastructure, and ComSuper’s defined benefit scheme administration systems.  When implemented, it is expected that these improvements will generate further savings of around $3 million a year.
 
Lindsay Tanner said the Government is committed to ensuring governance arrangements for its superannuation schemes are effective and consistent with the broader superannuation industry.

“In an effort to modernise the governance structure for ComSuper, the role of the Commissioner for Superannuation will be replaced with a Chief Executive Officer effective 1 July 2010.”

These reforms follow on from the October 2008 announcement which outlined the Government’s plans to merge the boards of Australian Reward Investment Alliance (ARIA), the Military Superannuation and Benefits Scheme (MSBS) and the Defence Force Retirement and Death Benefits Scheme (DFRDB) to form a single trustee board on July 2010. The new board will be trustee of the main civilian and military super schemes and will have the requisite skills to govern in the best interests of all members. Importantly, civilian and military interests will continue to be represented on the new board.

Lindsay Tanner said: "Consolidation will bring more than 650,000 members and pensioners under a single trustee board, establish a greater pool of assets for investment purposes and apply best practice management approaches across all the schemes."

“The introduction of these changes reflects the ongoing work within the Government to review and where necessary, reform its own business operations, internal governance and structures just like anybody else.”
 
“The Rudd Government will continue to work on reforming the Australian Government superannuation schemes to ensure that they are best placed to deliver more sustainable and cost-effective superannuation services in the best interests of their members and ultimately, better value to the taxpayer.”

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