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SuperValuers Newsletter - March 2004
CSS and PSS Scheme Specific Factors
At long last, the wait is over. On Monday 8 March 2004, the scheme specific factors (SSF) for the 2 Commonwealth defined benefit public service schemes, the CSS and PSS were gazetted. This newsletter looks at the implications and next steps for practitioners.
Note that the military schemes - DFRDB and Military Super remain under the default valuation arrangements. The date of their introduction remains speculative but they are not expected in the immediate future.
Why were SSF Introduced?
The main reason is equity. The SSF addresses the design of the schemes whereas the default valuation factors are an average for all defined benefit schemes. The differences in the growth phase can be substantial ranging from a slight increase to 80% increase. The SSF more accurately reflect the true value of the superannuation interest. The CSS has the greater scope for substantial variations whilst the PSS is less marked ranging from 5% to 20%.
The differences in the payment phase (i.e. when the member is in receipt of a pension) are much more subdued. If the member is an invalid pensioner, the interest valued using SSF could reduce in value relative to the default factors.
What is the Operative Date of the SSF?
The date of effect is the date of gazettal, 8 March 2004.
Do I need to value the superannuation interest again?
If proceedings have been finalised using the default factors, there is no need to revalue the interest. It is clear though that in most cases, the differences in valuation will be relevant to at least one of the parties.
Can I use an existing Superannuation Information Form (Form 6) to value using SSF?
The inputs are quite different for the growth phase so an existing SIF cannot be used. For interests in the payment phase, the same information can be used and the largest difference will be for members on an invalidity pension.
What inputs do I need to value using SSF for the CSS and PSS?
For the growth phase, you can choose between:
- member statement
- call centre data (email Peter for details)
- superannuation information form (from ComSuper at a cost of $165)
The ideal is to value using a member statement. For the member, the call centre can provide information to value between member statement dates. For the non member, valuing between member statement dates would require a superannuation information form.
For the payment phase, the options are easier. You need annual pension payment and whether the pension is age, invalidity or a spouse pension.
When can I get a valuation using SSF?
Valuations are available now. You will be able to use our website - www.supervaluers.com.au - to do the valuations yourself from Monday 15 March.
Why should I use the website?
You can do your own valuation in less time than it takes to dictate instructions. Furthermore, the cost of the valuation is 20% less and there is no charge for subsequent valuations at different dates - i.e. there is no cost for additional valuations at date of separation, marriage, hearing etc. The website is fully supported.
What will it cost?
You can fax or post the instructions to me and the cost is $300 and $100 for extra dates. Alternatively, you can value using our website at $275 for the first date with subsequent dates at no charge.
What about the Separate Interest Bill?
It is still speculative when the Senate will debate the third reading.
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