News
27th October, 2019
Amendments to the Emergency Services Superannuation Act pass through Parliament
The VAU is pleased to inform members that the improvements to your Emergency Services Superannuation Scheme which we have lobbied for over many years finally passed through the Victorian Parliament last week via the Superannuation Legislation Amendment Act 2019 (Vic).
The specific improvements that have been made to the Emergency Services Superannuation Act 1986 (Vic) are listed below.
IMPROVEMENTS TO ESSS
1. Reaching the maximum multiple
When you reach the maximum multiple, you will now receive additional Employer Contributions to be paid into the ESSSuper Accumulation Plan. These contributions will be back dated to 1 July 2019, or the date you obtained your maximum benefit multiple if this was after 1 July 2019. Your employer will commence at a rate of 3% of your actual salary and will increase this contribution to 12% of your actual salary by the 2026/27 financial year.
2. Higher superable salaries will be maintained
If your salary is reduced on or after 1 July 2019 for any reason, your higher superable salary will be automatically maintained, unless you elect otherwise. Contributions are still payable on the superable salary that has been maintained.
3. Contributions will be calculated on a fixed superable salary
As at 1 July each year, your superable salary will be used to calculate the contributions payable for the 12 months commencing 1 September each year. Contribution amounts payable from 1 September 2019 will be based on your superable salary at 1 July 2019 and will be fixed for the following 12 months unless you change your contribution rate or time fraction. This is aimed at reducing the administrative burden of calculating superable salaries and avoiding miscalculations.
4. Transition to retirement
ESS Defined Benefit members can now access part of their Defined Benefit entitlement, once they reach preservation age, to commence a ‘Transition to Retirement Pension’. As part of this process, an eligible member may transfer between 20% and 50% of their Defined Benefit entitlement to an ESSSuper Working Income Stream. If you elect this option, your accrued multiple will be reduced to reflect the amount transferred to the Working Income Stream. The Working Income Stream will enable eligible members to transition to retirement by supplementing their salary with regular pension payments as they move into part-time work.
5. New changes for members on unpaid parental leave
Members on unpaid parental leave will now be able to elect a contribution rate for up to 12 months with payment deferred until they return to work.
Upon your return to work, ESSSuper will contact you to make arrangements for any outstanding payment accrued while on leave. These payment options include lump-sum payments or additional regular deductions from your pay.
Previously members on unpaid parental leave were deemed to be nil contributors for the first 12 months.
6. New contributions rate
There are now two additional catch up rates for operational DB members of 9% and 10%.
Where a member’s average contribution rate is less than 7% over their total period of membership, they will now have access to two additional catch-up rates. This will allow members benefits to accrue at a faster rate.
For a limited time eligible members may request to have the higher rates apply from 1 July 2019. If backdated, members will be liable for contribution arrears.
Moving forward
The VAU together with other Emergency Services Unions will continue to lobby for further improvements to the ESSS Scheme. We will also work to improve other superannuation schemes that apply to members at ESTA and NEPT to ensure member’s superannuation entitlements and savings are as flexible and beneficial as possible.
In Solidarity,