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

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.

For members of the Commonwealth Superannuation Scheme (CSS), the Transition to Retirement arrangements require a change of employment status so that the employee ceases to be a CSS contributing member. In the Australian Public Service (APS), the only way that an ongoing APS employee can 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 part-time non-ongoing APS employee.

It should be noted that access to Transition to Retirement is not an entitlement from an APS employment perspective. There is no obligation on an APS employee’s agency to agree to engage a person as a non-ongoing APS employee solely to allow them to access the arrangements. Ongoing employees will therefore need to determine with their agency whether the agency is able and willing to assist the employee in doing so.

CSS rules

The Commonwealth Superannuation Corporation’s Transition to retirement fact sheet contains further information on these arrangements from a superannuation perspective.

The Fact Sheet points out that while the CSS governing rules do not expressly allow for Transition to Retirement, currently, and 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 you 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 (the PS Act) or subordinate legislation for an agency to change an APS 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.

SES employees

For ongoing Senior Executive Service (SES) employees, clause 2.14 of the Australian Public Service Commissioner’s Directions 2013(the Directions) provides that an agency head may engage a person who is an ongoing SES employee to perform duties as a non-ongoing SES employee without complying with the usual merit selection requirements that apply to longer term non-ongoing engagements (i.e. specified term or specified task engagements of more than 12 months).

The outcome of such a decision would be that the person would come within the CSS Transition to Retirement arrangements, provided such an engagement was on a part-time basis.

The Directions provide that in order for this provision to operate:

  • the person is to be engaged for a specified term or specified task; and
  • the person resigns as an ongoing SES employee in order to commence the engagement as a non-ongoing SES employee for a specified term or specified task; and
  • the engagement as a non-ongoing SES employee for a specified term or specified task is at the same classification as the person’s current SES classification, or is at a lower SES classification.
  • An engagement of a person as an SES employee for a specified term in accordance with clause 2.14 of the Directions is subject to the maximum time limit of 5 years imposed on such engagements as set out in Public Service Regulation 3.4.

Non-SES employees

For ongoing APS employees at classifications below the SES, any non-ongoing engagement intended to allow the employee to access the Transition to Retirement arrangements will be subject to the PS Act and specific requirementsregarding non-ongoing employment set out in subordinate legislation, in particular the Directions and the Public Service Regulations.

  • Where it is proposed to engage a person as a non-ongoing APS employee for a specified term or specified task of more than 12 months (or extensions of shorter periods of employment which result in the engagement extending beyond 12 months), the vacancy must be advertised in the Public Service Gazette and a competitive selection process conducted with the decision based on merit – see section 10A of the PS Act and Part 2.1 and clause 2.12 of the Directions1;
  • an engagement of a person as a specified term or specified task employee for a period of 12 months or less, and the engagement of persons for duties that are irregular or intermittent, must be made in accordance with clause 2.12 of the Directions; and
  • regulation 3.5 of the Regulations sets out the circumstances in which an agency head can engage a person as a non-ongoing employee for a specified term or for the duration of a specified task and imposes certain time limits on specified term engagements.

It should also be noted that the APS Employment Principles as set out in section 10A of the PS Act provide 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.

1 Note that there are currently Interim arrangements for the APS recruitment in place in the APS which limit the advertising of vacancies as open to persons who are not ongoing APS employees or ongoing Parliamentary Service employees.

Page ID: 7002

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