Family Law - Public Sector Superannuation

Understanding the Public Sector Superannuation Scheme (PSS)

The Public Sector Superannuation Scheme (PSS) was introduced in 1990 to provide defined benefit superannuation entitlements to Commonwealth Government employees. It replaced the earlier Commonwealth Superannuation Scheme (CSS).

The defined benefit structure of the PSS closed to new members on 1 July 2005, and only accumulation interests are available to new employees joining the public sector after that date.

Structure of Retirement Benefits

PSS members receive a retirement benefit comprised of three main components:

• Member Component – Contributions made by the employee, plus interest

• Productivity Component – Employer contributions mandated under the scheme, plus interest

• Employer-Financed Component – A defined benefit calculated based on the employee’s final average salary, length of membership, and contribution rate

Upon retirement, these benefits may be taken either as a lump sum, an indexed pension, or a combination of both.

Family Law Valuation – Alternate Methods

In May 2004, alternate valuation methods were approved for use in Family Law matters involving the PSS. However, trustees of the PSS do not provide a formal valuation. This means parties involved in separation or divorce proceedings must obtain an independent valuation using the family law information package supplied by the scheme.

To access this information, a Form 6 application must be submitted. As of now, the scheme charges $150 per calculation date requested.

The PSS website offers extensive resources to support this process, including:

• Application instructions

• Family law fact sheets

• Sample court orders

What Happens to the Non-Member Spouse’s Interest?

Once a superannuation interest is split under family law, the non-member spouse’s entitlement cannot be transferred to another superannuation fund. Instead, it becomes an associate interest within the PSS.

These funds remain preserved in the scheme and are only accessible when the non-member spouse meets a condition of release, such as reaching retirement age or permanent incapacity.

Key Links and Information

• Website: www.comsuper.gov.au

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.