Frequently asked questions

If an ongoing APS employee wants to access Commonwealth Superannuation Scheme (CSS) Transition to Retirement arrangements, do they need to resign from their ongoing APS employment?

Yes. 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.

Transition to Retirement arrangements

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

The Government’s Transition to Retirement arrangements, introduced in 2005, 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.
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.

Considerations for APS ongoing employees

Other than a specific provision applying to Senior Executive Service (SES) employees (see below), 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.

Non-SES employees

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 12 months or over must be advertised and an open selection process conducted. Non-ongoing engagements cannot exceed 3 years in total unless the engagement is for a specified task. Initial non-ongoing engagements of up to12 months must also be advertised if the engagement needs to be extended beyond 12 months. 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.

SES employees

Considerations for SES employees are essentially the same as those outlined above. However, it should be noted that there is a provision included in the Commissioner’s Directions which does allow an ongoing SES employee to resign for the sole purpose of taking up an engagement for a specified term (i.e. non-ongoing), which could be used to achieve access to Transition to Retirement arrangements (see clause 6.3(2) of Commissioner’s Directions at http://www.apsc.gov.au/publications/directionsConsolidated.htm). Such an engagement would have to be on a part-time basis to satisfy Transition to Retirement requirements.

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.

Information