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Transition to retirement arrangements for Commonwealth Superannuation Scheme (CSS) members

Note that this page is under review. It has not yet been updated to reflect changes to the Public Service Act 1999 and Public Service Regulations 1999, or contained in the Australian Public Service Commissioner’s Directions 2013, that came into effect on 1 July 2013. Agencies may continue to use the guidance for reference, but should be aware that it may not reflect current legislative requirements.

The Government’s Transition to Retirement arrangements permit superannuation schemes to allow members who have reached their preservation age to start receiving their superannuation benefit whilst remaining employed by the same employer, provided that the benefit is paid in the form of an income stream, such as a pension which cannot be converted to a lump sum.

The Transition to Retirement arrangements require a change of employment status so that the employee ceases to be a CSS contributing member. In the APS, the only way to achieve such a change requires, as a first step, that the person resign from their ongoing APS employment status. The person would then need to seek to be engaged again as a non-ongoing part-time employee.

It should be noted that access to Transition to Retirement is not an entitlement. There is no obligation on an APS employee’s agency to agree to such an arrangement. Ongoing employees will therefore need to determine with their agency whether the agency is able or willing to assist the employee in accessing these arrangements.

CSS rules

The Australian Reward Investment Alliance (ARIA) Transition to Retirement Fact Sheet (http://www.css.gov.au/documents/factsheets/csf24.pdf) outlines the Transition to Retirement arrangements and refers to CSS rules as follows:

  • Prior to the 2005 changes, superannuation scheme members were not allowed to commence receiving their retirement benefits before age 65 until they had ceased their employment.
  • Now superannuation schemes have the option to offer Transition to Retirement if their rules allow.
  • The CSS governing rules have not changed since Transition to Retirement and therefore do not allow such payment to be made to contributing members.
  • However, under the current rules, in certain limited circumstances, members can cease their contributory membership of the CSS and become entitled to payment of a benefit whilst remaining employed by the same employer.

The Fact Sheet further outlines the limited circumstances in which the CSS offers these arrangements. Option 2, page 2 is relevant to APS employees and states that:

  • You are able to cease your CSS contributory membership if your employer allows you to change your employment conditions so that they are no longer eligible to contribute to the CSS, that is, become a temporary part-time or casual employee. Temporary part-time and casual memberships are not covered by the CSS.
  • Therefore, in this situation, it is possible for you to cease your CSS contributory membership even though you remain employed by the same employer.

Resignation and re-engagement

There is no power under the Public Service Act 1999 and subordinate legislation for an agency to change an employee’s employment status from ongoing to non-ongoing.

In order to access CSS Transition to Retirement arrangements an APS ongoing employee would need to end their ongoing employment by resigning and thereafter be re-employed in the APS on a non-ongoing part-time basis.

The rules that apply to Senior Executive Service (SES) and non-SES employees are the same.

Any non-ongoing engagement intended to allow the employee to access the Transition to Retirement arrangements will be subject to the Public Service Act 1999 and subordinate legislation requirements regarding non-ongoing employment:

  • non-ongoing employment opportunities for more than 12 months must be advertised in the APS Employment Gazette and an open selection process conducted with the decision based on merit,
  • initial non-ongoing engagements of up to 12 months must also be advertised if the engagement is to be extended beyond 12 months,
  • non-ongoing engagements cannot exceed 3 years in total unless the engagement is for a specified task, and
  • the engagement must be for a valid reason as specified in the Public Service Regulations.

It should also be noted that s.22(3) of the Public Service Act 1999 provides that the usual basis for engagement is as an ongoing APS employee.

Note: Information provided on Transition to Retirement arrangements and related considerations does not take into account the individual circumstances of employees, and should not be used as a substitute for specific professional or financial advice.

 

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