Automatic superannuation coverage for Govt employees

26/6/93

The State Government is to extend automatic superannuation coverage to all Government employees on implementation of the compulsory Superannuation Guarantee Charge.

Addressing a seminar of Government chief executive officers yesterday, Finance Minister Max Evans said the new charge had given the State the impetus to adopt simpler administrative arrangements for compulsory superannuation.

The Commonwealth legislation exempts employers from any obligation to make superannuation contributions to employees earning less than $450 a month, but Mr Evans said the State Government would make the payment anyway.

The Minister said the current non-contributory scheme would be replaced by a simpler scheme with benefits based on a straight percentage of salary.

Administrative savings flowing from the new arrangements allow the Government to extend the scheme to part-time and casual employees who earn less than the official cut-off point.

The move will result in a superannuation bonus for many employees, as contributions at an average rate of 4.5 per cent of salary for the current financial year will be backdated to July 1992.

Contributions will increase on a sliding scale until they reach a maximum of nine per cent of salary in about ten years' time.

Media contact: Max Evans 384 3921