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STATE SUPER

SAS Trustee Corporation

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State Superannuation Scheme (SSS) EMPLOYER EASY REFERENCE GUIDE

POOLED FUND

2004/05

REPORT TO MEMBERS

www.statesuper.nsw.gov.au www.statesuper.nsw.gov.au

Table of Contents

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1. Table of Contents ..................................................................................................................................2 2. Introduction and Overview .....................................................................................................................3 3. Employer Contacts ................................................................................................................................4 4. Employer's Responsibilities ...................................................................................................................5 5. Unit Entitlement and Superannuation Salary ........................................................................................6 5.1 Unit Entitlement ....................................................................................................................6 5.2 Reserve Units................................................................................................... ...................6 5.3 Superannuation Salary. ........................................................................................................6 6. Annual Adjustment Day (AAD) and Annual Review Day (ARD) ............................................................7 7. Contributions ........................................................................................................................................9 7.1 Employee contributions ........................................................................................................9 7.2 Employer contributions ........................................................................................................11 7.3 Optional employee contributions to First State Super (FSS) ..............................................11 7.4 Leave without pay (LWOP) .................................................................................................12 7.5 Part-time employment .........................................................................................................14 7.6 Salary reduction ..................................................................................................................15 7.7 Secondment ........................................................................................................................16 7.8 Casual Employment .............................................................................................................16 7.9 Members aged 65 to 70 .......................................................................................................16 8. Benefits ................................................................................................................................................17 8.1 Basic Benefit ........................................................................................................................19 8.2 Commonwealth Government Co-contributions ....................................................................19 8.3 Deferred Benefit...................................................................................................................20 8.4 Compulsory benefit preservation .........................................................................................20 9. Exits.................. ....................................................................................................................................21 9.1 Employment transfer ............................................................................................................21 9.2 Continuity of membership ....................................................................................................21 9.3 Resignation or Dismissal .....................................................................................................22 9.4 Retirement ...........................................................................................................................22 9.5 Retrenchment ......................................................................................................................22 9.6 Medical retirement ...............................................................................................................23 9.7 Death ...................................................................................................................................23 9.8 Members aged 70 ................................................................................................................24 10. Commonwealth Taxation......................................................................................................................25 10.1 Employer contributions tax.................................................................................................25 10.2 Contributions surcharge tax ...............................................................................................25 11. Tax File Numbers .................................................................................................................................26 12. The Billing System ...............................................................................................................................27 12.1 Statement of Account .........................................................................................................28 12.2 Invoice ................................................................................................................................30 12.3 Remittance Advice .............................................................................................................32 12.4 Employer Reserves ............................................................................................................32 12.5 Employer Merge .................................................................................................................33 12.6 Employer Oncost ...............................................................................................................35 13. Forms ..................................................................................................................................................37 13.1 Employer forms ..................................................................................................................37 13.2 Member forms ....................................................................................................................37 14. Publications & Seminars .....................................................................................................................39 14.1 Publications ........................................................................................................................39 14.2 Pre-Retirement Seminars ..................................................................................................40 15. Glossary ..............................................................................................................................................41

Reasonable care has been taken in producing the information in this guide, which gives a general interpretation of the provisions of the State Superannuation Scheme (SSS). SSS is governed by the Superannuation Act 1916 and the Superannuation Administration Act 1996. SSS is also subject to Commonwealth superannuation and tax legislation and may be affected by the State Authorities Non-contributory Superannuation Act 1987 and other NSW laws. If there is any inconsistency between information in this guide and a relevant Act, the relevant Act will prevail to the extent of any inconsistency. SSS Employer Easy Reference Guide 2 None of the SAS Trustee Corporation, its directors or officers warrants the accuracy, reliability or completeness of the information in the guide and, to the extent permitted by www.statesuper.nsw.gov.au law, all of them exclude liability for any decision taken on the basis of information shown in or omitted from the guide. Nothing in the guide is to be regarded as personal advice. EmployersJanuary 2007 and Members should seek professional advice before making decisions which may affect their future.

Introduction and Overview

Introduction

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This Employer Easy Reference Guide is designed to help you, as an employer, respond to the requirements of superannuation legislation. As superannuation is a complex area, our aim is to simplify the administration process and give answers to frequently asked questions. This Guide does not cover all legal requirements or situations which can arise for employers or employees in relation to superannuation. More information about scheme benefits, rules and other superannuation issues for employers and members is provided via Fact Sheets. The Fact Sheets are available from the website at www.statesuper.nsw.gov.au or from your Employer Relationship Officer.

Scheme Overview

The State Superannuation Scheme (SSS) was established by the NSW Government on 1 July 1919, under the Superannuation Act 1916. SSS was closed to new members from 1 July 1985. The SSS is a `defined benefit' scheme, which means that benefits are based on a specified formula. SSS members contribute towards units of fortnightly pension throughout their membership. Contributions and benefit entitlements are directly related to a member's unit entitlement which is determined by a member's superable salary, age, sex and length of contributory membership. The amount of pension payable for each unit held at retirement age is $5.50, with the employer contibuting $3.30 (3/5) and the employee contributing $2.20 (2/5). Normal retirement age is 60, except for female members who elected on joining to retire at age 55. Although the scheme is essentially a pension scheme, lump sum options are available. Members of SSS also receive a 3% non-contributory defined superannuation benefit (known as the Basic Benefit) for all service since 1 April 1988. There is a glossary of terms used in this Guide on page 41.

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Employer contacts

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The SAS Trustee Corporation (STC) is the Trustee of the State Superannuation Scheme (SSS) and the State Authorities Non-contributory Superannuation Scheme (SANCS). STC has appointed Pillar Administration (Pillar) as the administrator of SSS and SANCS. There is an Employer Relationship Officer from Pillar available to assist you. The Employer Relationship Officer is Marianne Dimitrievski. Enquiries to Pillar's Employer Help Line Phone: 02 4253 1426 Fax: 02 4253 1542 Email: [email protected]

Stay informed

When employers are affected by legislative or other changes to SSS and SANCS rules, the Trustee keeps you up to date via: · the half yearly Super Update newsletter, · your Employer Relationship Officer, and · a Fax Bulletin. If you are not receiving this information, or if your contact person or address details change, please let the Employer Relationship Officer know.

More information and services

For more information visit the website at www.statesuper.nsw.gov.au The website also has a dedicated employer area that has: · an email link to your Employer Relationship Officer, · a link to the Pillar Employer Services to enable the transfer and download of employee data, · copy of publications and recent communications to employers, and · employer and member forms that can be printed out.

Visit the website at www.statesuper.nsw.gov.au

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Employer's responsibilities

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As an employer, your responsibilities include complying with relevant superannuation legislation. Some of these responsibilities are: · Reconciling SSS employee payroll deductions against those invoiced. · Deducting and paying contributions as invoiced and on time. · Providing timely advice of changes of employee details including details of changing jobs within the NSW public sector. · Providing an employee's tax file number to Pillar when authorised to do so by the member. · Completing the Annual Adjustment and Annual Review Day process. · Providing complete and accurate details regarding employees who have terminated employment for any reason or who have reached age 70. · Providing complete and accurate details when an employee requests payment or deferral of a SSS benefit. · Providing complete and accurate details when an employee dies. · Paying optional member personal contributions to First State Super (FSS), or any other nominated complying superannuation schemes.

Note: This is not a complete list of every responsibility an employer has in relation to superannuation. It summarises the main requirements.

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Unit Entitlement and Superannuation Salary

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5.1 Unit Entitlement

The number of units to which a member is entitled determines the size of the benefit that a SSS member will receive upon retiring from the scheme. Contributions are paid on the basis that payments for a unit will be completed by maturity (i.e. normal retirement) age. Unit entitlement depends on salary and movements in the Consumer Price Index. A member is entitled to 1 unit for each $260 of superable salary. Each member is also entitled to an additional number of units (approximately 24 more units at March 2006) which is adjusted each year by inflation. Generally a member cannot contribute for more units than the number to which they are entitled.

5.2 Reserve Units

Members contributing for their full unit entitlement may elect to contribute for up to 8 reserve units. After a member has contributed to reserve units for at least 10 years (or at least 1 year if the member is aged 50 or over), they may substitute a reserve unit for each new or previously abandoned units that becomes available. Reserve unit contributions are deducted from member's salary every four weeks and remitted by the employer in the same manner as the normal units. However, reserve unit contributions are maintained in a separate account.

5.3 Superannuation Salary

An employee's superannuation salary, or superable salary, is the salary that employee contributions are calculated on and is often different to an employee's award or contract salary. Superannuation salary should include allowances that are paid on termination of employment (such as unused annual and long service leave), plus loading for shift work, but does not include overtime. The value of any approved employment benefits should also be included. These are non-cash benefits provided to employees (except for SES staff) through flexible salary sacrifice packaging arrangements approved for inclusion in superannuation salary by the Public Employment Office, Premier's Department. Superannuation salary and shift work loadings are defined in the Superannuation Act 1916. See www.legislation.nsw.gov.au for more information. Superannuation salaries are reviewed every year, based on the member's applicable Annual Review Day. See section 6, on page 7.

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Annual Adjustment Day (AAD) and Annual Review Day (ARD)

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Each year, every SSS member is given the opportunity to commence contributing for any additional units to which they may have become entitled, together with any units which they may have previously abandoned. A member is not required to contribute for units that would increase their total contributions to more than 6% of salary. If the member is contributing at or over 6% of salary, they are able to elect to abandon optional units or, if they have previously abandoned units, to take them up from their AAD. An election to abandon additional units must be made within 2 months of the member's ARD. Unit entitlement is determined according to the salary being paid on the ARD with any consequential adjustment of contributions occurring from the first pay day on or after the AAD. The actual dates of review and adjustment are related to a member's month of birth as follows: Month of Birth January to June July to December Annual Review Day 28 July 9 February Annual Adjustment Day 21 October 5 May

Employer Responsibility

To commence the ARD process, Pillar provides each employer with a detailed list of SSS contributors who are due for review. The employer is required to do the following: · Add any existing eligible contributors who have recently transferred to the organisation and whose names are not included on the list. · Indicate any recent exits, showing the reason for the exit and date of exit. · Indicate any changes of name. · Add the location code for each contributor listed if applicable. The code will be printed on the ARD notices to aid distribution of those notices where a home address is not held by Pillar. · Add the annual salary for superannuation purposes actually being paid at the ARD for each contributor listed. · Total all salaries provided on the list.

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Annual Adjustment Day (AAD) and Annual Review Day (ARD)

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Note: · The review salary is the salary that is paid on the ARD. Any salary increases that occur after the ARD are taken up at exit or the next ARD. Pillar requires employers to provide updated salary details immediately after the ARD, i.e. immediately after 9 February or 28 July each year. For contributors in part-time positions, the attributed annual full-time salary for the position/classification should be shown, as well as the annual part-time salary. If a member is on leave without pay (not approved LWOP), the salary to be advised to Pillar is the salary that was paid to the member immediately prior to the commencement of leave without pay. The salary to be provided, in respect of each member of the NSW Government's Senior Executive Service (SES), is the salary nominated for superannuation purposes by the member under the Government's SES policy.

· ·

·

Employer Responsibility

After Pillar receives the salary information, an ARD notice is issued to eligible members/employees. The ARD notice tells the member of their current unit entitlement and holding, and of their new unit entitlement based on the salary information received from the employer. Returned election forms are processed by Pillar and rate adjustment schedules showing the new contribution rates for members are provided by electronic file to the employer. This information can also be obtained by file download from the employer section of the website. Details of electronic formats can be obtained from the Employer Relationship Officer. The employer is then required to adjust the member's personal contribution rate accordingly, effective from the first pay day on or after the AAD.

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Contributions

7.1 Employee contributions

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The minimum employee contribution level is 6% of annual salary or the rate applicable to the full number of units appropriate to that salary, whichever is the lesser. The rate of contribution for each unit is determined by: · the contributor's age next birthday at the AAD; · the contributor's sex; · for a woman, whether an election was made to retire at age 55 or 60; and · whether the contributor became a scheme member before or after 1 July 1963. SSS employee contributions should be deducted from members' salaries in accordance with the Rate Adjustment Schedules provided to the employer by Pillar. All employee contributions are payable to the scheme via the employer on a superannuation (four weekly) period basis. · To calculate the four weekly superannuation period rate, multiply the member's salary by 0.06 and divide this amount by 13. · To determine what the rate is as a percentage of salary, multiply the rate by 13 to get the annual contribution amount, then divide this amount by the member's salary. Employee contributions must be paid to Pillar within 7 days after the end of each superannuation period. Any changes to deductions made in the previous period are to be shown on the Employee Variation/Change of Personal Details Notification Sheet.

Note: Scheme legislation allows for the charging of interest on late paid contributions.

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Contributions

The following table shows details of the 13 superannuation periods: Period 1 2 3 4 5 6 7 8 9 10 11 12 13 Start 1 July 29 July 26 August 23 September 21 October 18 November 16 December 13 January 10 February 10 March 7 April 5 May 2 June End 28 July 25 August 22 September 20 October 17 November 15 December 12 January 9 February 9 March 6 April 4 May 1 June 30 June

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If an employer wishes to change their remittance frequency, other than on a four weekly period basis, they should contact their Employer Relationship Officer.

Contributions not payable

Contributions to SSS are payable up to the end of the superannuation period prior to that in which a member's exit from employment takes place.

Changes to standard rate

Any change to a contributor's standard contribution rate will normally be actioned at the AAD in response to the Rate Adjustment Schedule we send you prior to that day. However, there are a number of reasons why a member's contributions may vary throughout the year, such as reduction in salary, arrears recovery, etc. You will be notified of any variations that are to be made to a contributor's deductions, and these variations are to be included on the Employee Variation/Change of Personal Details Notification Sheet for the relevant period submitted.

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Contributions

7.2 Employer contributions

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Pillar invoices employers, who are not funded by NSW Treasury, for employer contributions to SSS and for the Basic Benefit component of SANCS. The amount billed for employer SSS and Basic Benefit contributions is included on the monthly invoice employers receive for employee SSS contributions. See section 12, The Billing System on page 27 for more information about how the invoicing process works.

Note: In certain circumstances, a SSS member may also be a contributing member of First State Super (FSS). An employee may be working for the same employer doing different jobs and receiving separate remuneration, or working for two different employers. In both cases, the second job or job not covered by SSS will attract Superannuation Guarantee contributions which will be made to FSS unless the employee nominates another complying superannuation scheme for that purpose.

7.3 Optional employee contributions to First State Super (FSS)

In addition to their contributions to SSS, members may also make superannuation contributions to FSS. Eligible employees may elect to pay to FSS in the following circumstances: · Top-up (post-tax) contributions to boost their personal superannuation savings. · Contributions on behalf of a spouse as defined in the FSS legislation. · Salary-sacrifice contributions on a pre-tax basis (such contributions are treated under the tax and preservation rules as employer contributions and are subject to 15% contributions tax and reported as surchargeable contributions if made prior to 1 July 2005). Application forms and more information about optional contributions to FSS are available from Customer Service or the First State Super website at www.firststatesuper.com.au Optional contributions to FSS do not affect the amount of an employee's SSS contribution or superannuation salary.

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Contributions

7.4 Leave without pay (LWOP)

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LWOP is a period of leave during which the employee is not entitled to receive payment of salary from the employer. For superannuation purposes, LWOP is categorised as either Approved Leave or Ordinary Leave. Pillar must be notified of all cases of ordinary LWOP exceeding 5 consecutive working days. The Employee Variation/Change of Personal Details Notification Sheet should be completed and forwarded to Pillar. For part-time LWOP, complete the employer section of LWOP (Part-time or Full-time) Members election, SSS 536). Employee and employer contributions remain payable to Pillar during all periods of LWOP, regardless of the type of leave. Member benefits are reduced proportionately for any period of maternity or sick LWOP that exceeds 2 years. Employees should be made aware of the conditions applying to contributions payment. They should be instructed to contact Pillar's Contact Centre prior to going on LWOP in order to make arrangements for payments of contributions. Employee contributions continue to be due for the whole period of LWOP and can only be deferred in special circumstances. Special circumstances will extend to a person who is on leave without pay and has provided satisfactory evidence that during the period of leave financial hardship would occur if the payment of the member's personal contributions were required to be paid. SSS form 536 `LWOP - Member's Election' provides further details on deferment of contributions. Where contributions are deferred, interest is charged on arrears until they have been paid. Benefit cover also continues during such periods of leave.

Part-time LWOP

A member who takes any form of LWOP on a part-time basis may elect to be treated as a parttime employee for a period of the leave (see 7.5 Part-time employment). This option is available, irrespective of whether the part-time LWOP is ordinary LWOP or approved LWOP eg - maternity leave or extended leave taken at half pay. Some members may choose this option in order to reduce the amount of their personal contributions to the scheme, however as a result their end benefit will also be lower. A member on part-time LWOP who does not make an election to be treated as a part-time employee for the period of leave should be treated in the same way as a member who is on full-time ordinary or approved LWOP (see table on page 13).

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Contributions

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Ordinary LWOP Holidays or annual leave

The following table summarises the differences in treatment between approved leave and ordinary leave. Approved LWOP Types of LWOP Sick leave Maternity leave Secondment, Workers compensation Military Leave Study Leave Circumstances approved by the STC No - unless sick leave or maternity LWOP exceeds two years.

Employer advice required?

Contributions payable?

Can a member elect to permanently reduce unit entitlement?

Yes, employee and employer contributions are payable. However, for sick leave and maternity LWOP contributions are payable for the first 2 years only. No.

Yes, for LWOP in excess of 5 days. Use the Employee Variation/Change of Personal Notification sheet. For part-time LWOP, complete the employer area of LWOP (part-time or full-time) members election, employee form SSS 536. Employee and employer contributions remain payable for the whole period.

Yes. The employer may require the employee to pay the employer's contributions liability for the whole period of the leave (generally when the leave exceeds 3 months). If the employee is unable to pay the employer's liability, the employee may take a permanent reduction in unit entitlement. Employees are to complete the LWOP (part-time or full-time) ­ member's election, SSS 536 form and send it to Pillar. Yes, however only where special circumstances exist and is subject to approval. Interest is payable at the fund earning rate until the contributions are paid. The Basic Benefit does not accrue for any period in excess of 5 days.

Can employee contributions be deferred? Basic Benefit

Yes, however only where special circumstances exist and is subject to approval. Interest is payable at the fund earning rate until the contributions are paid. The Basic Benefit accrues for the first 2 years only for maternity and sick LWOP.

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Contributions

7.5 Part-time employment

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The following rules apply to SSS members who work part-time in the ordinary sense, and to those who take LWOP on a part-time basis and elect to be treated as a part-time employee for superannuation purposes: (a) The member's unit entitlement and contributions are adjusted on a pro rata basis. Contributions paid prior to the change to part-time employment are used to buy fully paid units in the scheme - the member does not have to make any further contributions for these units. The adjusted unit entitlement is determined having regard to the equivalent full-time salary for the position after a deduction factor is applied. Member contributions are payable in respect of the difference between fully paid units and the adjusted unit entitlement.

(b)

The employer must advise Pillar of any change in the member's basis of employment on the Change in hours worked, E STC 222 form i.e. if the basis of employment has changed from full-time to parttime; part-time to full-time or part-time to part-time (where the salary ratio changes). Salary ratio = part-time salary/attributed full-time salary The following information is to be included on the Change in hours worked, E STC 222 form: · New attributed (full-time) salary The full-time salary, or where the new basis of employment is part-time, the salary payable if the employee held an equivalent full-time position. All allowances for superannuation purposes are to be included in this figure. · New part-time salary The actual part-time salary payable to the employee.

Note: If a member changes from full-time to part-time during the year, the employee contribution changes from the beginning of the period in which the changes occurs. If the member changes from part-time to full-time during the year, the employee contribution remains at the part-time rate until the next AAD.

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Contributions

7.6 Salary reduction

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If an employee's salary is reduced, to an extent that it also reduces their unit entitlement, contributions for units above the new entitlement will continue to be payable and must be paid from their salary unless the employee requests otherwise within 2 months of the date on which the reduced salary was first paid. Employees can make a request to reduce unit entitlement by completing the Choice of contribution rate on reduction in salary, SSS 529 form. Although contributions remain payable at the higher rate (subject to an employee's election), units above the new entitlement will not attract a benefit in the event of retirement or death, unless the reduction in salary resulted from ill-health, or some other reason considered by STC to warrant retention of the benefit entitlement in respect of the excess units. Employees can apply to Pillar to remain covered for the higher entitlement. If approval is given, they must continue to contribute for the higher number of units. Where an employee's application has the employer's support, the employer must attach a statement confirming the reason for the salary reduction and stating the employer's support of the application.

Members aged 55+

Members 55 years and over who have a salary reduction of at least 20% can defer their SSS entitlements based on their higher salary. The member must apply to Pillar to defer their benefit within 2 months of the salary reduction and attach a certificate from the employer verifying their age and the amount of salary reduction. The benefit is deferred with the benefit amount being based on the final average salary immediately before the salary reduction. This applies to both the SSS and Basic Benefit. Contributions cease to be payable to SSS from the date of effect of the member's election. However, the member can immediately join the State Authorities Superannuation Scheme (SASS) and accrue benefits in that Scheme. The member will then begin to accrue Basic Benefit in respect of the lower salary. Members who require further information about this option can contact Customer Service on 1300 130 096 or employers requesting further information can contact Pillar's Employer Helpline on 02 4253 1426.

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Contributions

7.7 Secondment

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When an employee is seconded to another employer, employee contributions remain payable. The `new' employer is required to pay monies back to the original employer, as the original employer continues to be billed for the employee liability. There is also provision under the Act for the unit entitlement to be related to the salary paid by the organisation to which the employee is seconded where that organisation is not an employer participating in the scheme. To enable SSS electronic processing to be updated without any problems, seconded employees will be treated as transfers. The applicable code to include on the Employee Variation/Change of Personal Details Notification Sheet is "T" for transfer.

7.8 Casual employment

There are no specific provisions for casual employees in SSS. Any change in employee hours or circumstances, is to be notified in terms in the salary ratio method, ie the employer will need to complete the Employee Variation/Change of Personal Details Notification Sheet for the period in which the change occurs.

7.9 Members aged 65 to 70

The basic procedures that apply to employees aged 65 or more are: (a) (b) (c) employee and employer contributions must continue to be paid to SSS for employees who do not choose to exit from the scheme after reaching age 65, contributions remain payable up to an employee's 70th birthday, providing the employee continues to work at least 10 hours per week, an employee aged between 65 and 70 may, however, choose to exit from SSS and receive payment of, or defer their accrued benefits. In these cases, it will be necessary for the employer to pay Superannuation Guarantee contributions to First State Super (or another complying superannuation scheme), contributions and benefit accrual must cease at age 70.

(d)

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Benefits

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Benefit payable A withdrawal benefit consists of the member's contributions and interest, and an additional component based on the number of years of contributory service (subject to a minimum of 10 years service). The member may choose to defer their benefit entitlement in the scheme to be payable at a later date from 55. Spouse/partner and children's benefits are forfeited if a member elects to take immediate payment of their withdrawal benefit.

SSS is a defined benefit scheme which provides a pension with a lump sum option on retirement. Normal retirement age is 60, except for female members who elected on joining to retire at age 55. An early voluntary retirement benefit is available for members from age 55 with a normal retirement age of 60. Other benefits are also payable on resignation, discharge, retrenchment, invalidity or death. The table below summarises the types of benefits payable: Type of exit Resignation, Discharge or Dismissal prior to age 55

Early Voluntary Retirement between age 55 at 60 Normal Age Retirement at age 60 Aged 65-70 Scheme Exit

A pension is payable at a reduced rate if the member has contributed to the scheme continuously for 10 years. Female members contributing for retirement at age 55 cannot voluntarily retire with a pension prior to that age. A lump sum option is available within a prescribed time period. A full pension is payable at or after age 60 (age 55 for female members contributing to retire at that age). A lump sum option is available within a prescribed time period. A member aged between 65 and 70 may choose to exit from SSS whilst still working and receive payment of, or defer, their retirement benefits (see Section 7.9 Members age 65 to 70, page 16, about the employer's on-going contribution liability for such employees). If the member is not eligible for an age retirement benefit (ie is less than age 55), a retrenchment lump sum or pension is available. Alternatively the benefit may be deferred. If the member is eligible for early or normal retirement (generally from age 55), the appropriate retirement benefit is payable. A special deferred aged 55 retirement benefit is an option available only to members who are retrenched between 50 and 55. This option allows members to defer payment of their age 55 retirement benefit until they reach that age. To exercise this option, the following conditions must be met: · the member must have the employer's agreement; · the member must pay the personal contributions that would have been payable on their units up to age 55; · the additional cost of the employer component of the benefit is charged to the employer reserve.

Retrenchment

Invalidity (Medical) Retirement

A full pension is payable at exit with a lump sum option becoming available from age 55. If the option is not taken at age 55, then a second option to commute arises at age 60. If the member is under age 55, the pension paid is subject to review and may be discontinued under certain circumstances. See section 9.6 Medical retirement on page 23 for more information.

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Benefits

Type of exit Death of a Contributor Conditions With surviving eligible spouse/de facto partner Benefit

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Two-thirds of the contributor's pension entitlement at time of death, is payable to the eligible spouse/de facto partner, with a lump sum option at age 55 or on pension commencement, whichever is later. If the option is not taken at age 55, then a second option to commute arises at age 60. Entitlements as above are payable to any eligible spouse/de facto partner, plus a pension for each child under the age of 18, or between the ages of 18 and 25, where the child is enrolled in full-time study with a Trustee approved education institution. A withdrawal benefit is payable to the estate, or a refund of contributions is payable to the estate and a child pension is payable to each eligible child as outlined above, or a withdrawal benefit is also payable to the estate. A withdrawal benefit is payable to the personal respresentatives of the estate.

Death of a Contributor

With surviving eligible children

Death of a Contributor

With surviving eligible children (no spouse/de facto partner)

Death of a Contributor

With no surviving eligible spouse/de facto partner or children

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Benefits

8.1 Basic Benefit

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The Basic Benefit is additional to the SSS benefit. It accrues at the rate of up to 3% of final average salary or final salary depending on the mode of exit, for each year of service from 1 April 1988. Periods of ordinary LWOP greater than five consecutive days do not count as service for Basic Benefit purposes. The Basic Benefit is fully paid by employers. The Basic Benefit scheme was effectively closed to new members from 1 July 1992. It was replaced for new employees by FSS. That is, employer (Superannuation Guarantee) contributions for new employees were paid to FSS, unless the employee nominated another complying superannuation scheme for that purpose. The following table summarises the salary used to calculate the Basic Benefit depending on the type of exit. Exit type At or after age 55 Retrenchment, partial and permanent invalidity, total and permanent invalidity or death prior to age 55 In other circumstances of exit prior to age 55 (for example, resignation) Salary used to calculate the benefit Final average salary Final salary

Final average salary

Part-time employment

If an employee changes the hours that they work, (eg from full-time to part-time), then a salary ratio factor is applied to the Basic Benefit service accrual rate. For example: A member previously working full-time, changes their working hours to half the normal hours of that position (and correspondingly earning half the full-time salary), a salary ratio of 0.5 is applied to reduce the Basic Benefit service entitlement to 6 months (i.e 1 year of service x 0.5 salary ratio). The full-time equivalent salary is used to calculate the final average salary so as not to disadvantage the member for service days accrued at the full-time rate.

8.2 Commonwealth Government Co-contributions

Co-contributions are made by the Commonwealth Government to match personal contributions made into superannuation funds by eligible persons. Co-contributions can be accepted into SSS, and they, together with the Basic Benefit form the State Authorities Non-contributory scheme (SANCS) benefit.

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Benefits

8.3 Deferred Benefit

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A member may elect to defer immediate payment of the withdrawal benefit on resignation, dismissal, discharge or retrenchment. The benefit is deferred in SSS and is payable: · on a member's eligible retirement age; · as a result of total and permanent invalidity, or death; · on financial hardship or compassionate grounds (subject to conditions and payment limits); · on retirement from the workforce (subject to certain conditions). Because it contains the employer financed component of the accrued benefits, the value of the deferred benefit may be considerably higher than the withdrawal benefit immediately payable.

8.4 Compulsory benefit preservation

Commonwealth provisions generally require part of a contributor's superannuation benefit to be preserved until ceasing employment from age 60 or permanent retirement from the workforce at or afer the member's preservation age, which is between ages 55 and 60. The benefit will be paid earlier than the preservation age in the event of the member's invalidity or death. Payment on the basis of financial hardship or compassionate grounds may also be approved. A member may choose to receive payment of their deferred withdrawal benefit at any time, subject to Commonwealth preservation rules. However, the member will forfeit a large portion of the employer financed component of the benefit, as well as reversionary and child pension rights.

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Exits

9

In all cases of employee exit, the employer should complete the Employee Variation/Change of Personal Details Notification Sheet for the period in which the exit occurs. The employee should complete either the Application for payment or deferral of a SSS benefit form, SSS 512 or the Continuity of scheme membership form, STC 238. Until advice of an employee's exit is received by Pillar, the employer will continue to be billed monthly for both employee and employer contributions.

9.1 Employment transfer

This applies to employees who transfer from one billing location to another within the same employer, or between Government Departments or other employers that have common funding arrangements e.g. Consolidated Revenue Departments. A good indication that a transfer has occurred is that the member has maintained their full leave entitlements on commencement with the new employer. For superannuation purposes, these employees may generally be treated as if there has been no break in employment and automatic continuity of SSS membership usually applies. The original (previous) employer is billed for its SSS funding liability up to the end of the month prior to transfer. The new employer is billed for the full calendar month in which the transfer takes place. The original employer is to show the employee as a `transfer out' on the Employee Variation/Change of Personal Details Notification Sheet and the new employer is to show the employee as a `transfer in' for the relevant period.

Note: The transfer cannot occur unless the application is in writing and is made within 3 months of the employee's transfer.

9.2 Continuity of membership

A member cannot qualify for a transfer if they cease employment with a SSS employer and start work with an unassociate SSS employer or, if they have a break in employment between the two employers. However, they may apply for continuity of their membership. Continuity will be approved provided the member commenced their new employment within three months of the day on which they exited the previous employment. The following conditions must also be satisfied in order to claim continuity of membership: · all benefits paid to the member (plus interest) must be refunded to the scheme; · all contributions which accrued during the break in service (employer and employee) must be paid for by the member; · the election to continue membership must be made within 3 months of the exit date. Alternatively, the member may apply for payment or preservation of their benefit.

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Exits

9

Mobility provisions with Local Government/Energy Industry Schemes

On 1 July 1997, Local Government and Energy Industry employees (LG & EI) were transferred across from SSS (and SANCS) to new schemes established for local government and certain electricity industry employers. Members who were transferred under these arrangements are able to resume membership in SSS if they cease employment with a LG or EI employer and commence new employment in the NSW Public Sector. Similar conditions apply as on previous page Continuity of membership.

9.3 Resignation or Dismissal

A withdrawal benefit is payable when a member resigns or is discharged or dismissed from employment prior to early retirement age.

9.4 Retirement

A normal retirement benefit is payable when a member exits after having reached age 60 years (or age 55 years for a woman who elected to contribute at rates for retirement at that age) after having completed 10 years of service with one or more employers. An early voluntary retirement benefit is payable when a member whose normal retirement age is 60, exits after having reached age 55 and after having completed 10 years of continuous scheme membership.

9.5 Retrenchment

A retrenchment benefit is payable where a contributor's employment has been: (a) compulsorily terminated by the employer on the gounds that: (i) the employer no longer requires the contributor's services and, on termination of the contributors service, does not propose to fill the contributor's position; (ii) the work which the contributor was engaged to perform has been completed; or (iii) the amount of work that the employer requires to be performed has diminished and, as a consequence, it has become necessary to reduce the number of employees employed by the employer; or (b) terminated as a result of the acceptance by the contributor of an offer by the employer of retrenchment made on a ground specified in paragraph (a).

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Exits

9.6 Medical retirement

9

A SSS member can be medically retired on a pension with acceptable supporting evidence that the member is unable for medical reasons to undertake the duties for which they were employed. The test applied is one of partial invalidity. Public service employers are required to refer employees to Healthquest to assess the member's ability to undertake the duties of their position. Pillar will process the medical retirement application upon receipt of the exit form and relevant medical retirement certificate from Healthquest. However, some employers are not required to use Healthquest. Those employers who do not use Healthquest must forward to Pillar the exit advice and relevant medical reports which support the decision to medically retire the employee. If insufficient medical information is provided, it will be necessary to refer the member to an independent medical specialist who will provide the required information to Pillar to enable a decision to be made.

Pension review

A person under age 55 and is in receipt of an invalidity pension will have their pension reviewed every five years or such shorter time as the Trustee may determine. The review takes into account the pensioner's continuing incapacity to perform duties which are identical, or similar, to those the pensioner performed immediately before retirement. If, as the result of a medical review, the pensioner is assessed as being able to perform duties identical, or similar to, those the pensioner performed before the most recent invalidity pension approval, arrangements are made for the member's reemployment: · with the employer from whose service the pensioner was retired, · or with any other employer under the SSS Act. Pillar must advise the pensioner that, in view of the availablity of an appropriate position, payment of the pension will cease, whether or not the pensioner accepts the available position. However, if suitable employment cannot be found, payment of the invalidity pension is continued.

Note: Immediate payment of the superannuation benefit (ie preserved component of a pension, plus Basic Benefit and Co-contribution amounts) is not payable unless the member has reached the Commonwealth preservation age or provides sufficient medical evidence that supports total and permanent incapacity.

9.7 Death

A spouse or de facto partner benefit may be payable on the death of a current member or pensioner. A same sex partner may qualify for this benefit. Pension may also be payable to the child/children of the deceased.

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Exits

9.8 Members aged 70

9

Whilst an employee may choose to continue working after reaching age 70, their contributory membership of SSS must cease when they attain that age. Premiers Department Circular 99-49 requires that a superannuation loading must be paid as part of an employee's salary to all employees 70 years and over. The loading should be equal to the compulsory employer Superannuation Guarantee amount, which is currently 9% of salary. Contact the Premier's Department if you have any questions regarding this matter.

Note: As the SSS scheme is designed to maximise benefits at the scheduled retirement age, if a member elects to remain in the scheme after this age then they should be encouraged to speak with Pillar to obtain details regarding their benefits, and then contact their financial adviser.

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Commonwealth Taxation

10

Scheme legislation authorises the reduction in a members (gross) benefit to offset Commonwealth taxation provisions applying to superannuation funds. The reduced benefits are then subject to standard income tax provisions.

10.1 Employer contributions tax

Since 1 July 1988, Commonwealth tax at the rate of 15% has been payable on employers' superannuation contributions. Members meet the cost of this tax through a reduction in their employer-financed benefits paid in respect of service from 1 July 1988 (except where an employer-financed death benefit is paid to the dependants of a deceased member - in these cases, a credit is obtained on the contribution tax paid and no benefit reduction applies). However, the benefit reduction is offset by lower personal tax payable when a member receives a benefit.

10.2 Contributions surcharge tax

The Commonwealth contributions surcharge tax commenced on 21 August 1996 and was payable where a member's taxable income plus employer superannuation contributions exceeded the annually adjusted income threshold. The surcharge tax in a defined benefit scheme like SSS is not payable to the ATO until part or all of the benefit leaves the scheme. Until then, the surcharge tax accumulates in a debt account that is increased at the Commonwealth 10 year Treasury bond rate each 30 June. Effective from 1 July 2005, the surcharge tax will not be payable on employer superannuation contributions made after this date. However, any surcharge debt a member had prior to 30 June 2005 will remain in SSS and will continue to accrue interest until the debt is paid. The ATO will continue to issue surcharge assessment notices for the 2004-05 year and for prior financial years.

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Tax File Numbers

11

SSS members do not have to provide their Tax File Number to Pillar. However, if a member does not do so, any lump sum benefit paid to the member will have PAYG tax deducted at the highest marginal tax rate rather than at superannuation concessional rates. If any employee requests you to do so, it is important that you promptly forward the Tax File Number provided by the employee to Pillar. That is, where the employee has answered yes at question 2 on the Tax File Number Declaration form. Alternatively, employees can provide this information to Pillar on the Tax File Number collection form, STC 204 or by telephoning Customer Service on 1300 130 096.

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The Billing System

12

Non Treasury funded employers will generally be invoiced for both SSS employer and Basic Benefit contributions each month. The SSS billing advice is generated at the beginning of each calendar month, following the end of month update. The billing advice serves three main purposes: · it is a billing document instructing you to pay your SSS and Basic Benefit employer contributions, · it is Pillar's official advice of any variations to the Basic Benefit contribution rate due to a change in employee circumstances, such as a salary change or a change in hours worked, and · it also provides details of members exiting from employment that you may need to use for audit purposes. The invoice will advise you of the total amount payable and that amount must be paid within seven days after the last day of that particular month.

Note: On-budget Treasury funded employers are not required to pay the employer funded contributions for SSS or Basic Benefit, as Treasury remits these contributions directly to Pillar.

The billing advice

The monthly billing advice to employers is in two parts: 1) Statement of Account: This is the first page of the billing document which incorporates the total of the preceding month's invoice along with details of payments received during the month, and the balance of the amount outstanding to Pillar. Invoice: This details the changes to be made in contribution payments to Pillar in the current month, including retrospective adjustments in relation to previous months.

2)

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The Billing System

12.1 Statement of Account

12

Employer Code Z15000

The following diagram shows the components of a Statement of Account issued monthly.

FINANCIAL ACCOUNTANT DEPARTMENT OF CASTLES LOCKED BAG 23 WESTERN HILLS NSW 2000

STATEMENT OF ACCOUNT AS AT 31/07/2004 Non Invoice Transactions For The Month SSS Payment Received 01/07/04 SANCS Payment Received 01/07/04 Total OPENING BALANCE July 04 01/07/04 Invoice

Ref No. 12988 Ref No. 12989

-21,614.30 -6,438.77 -28,053.07 24,541.95 28,594.74 -28,053.07 25,083.62

1 2

-Invoice

3

Non invoice transactions ­ see above CLOSING BALANCE August 2004 Invoice 1255 31/07/04 -DETAILS ATTACHED

4 5

21,518.74

Z15000 DEPARTMENT OF CASTLES WESTERN HILLS

Outstanding as per Statement July 2004 Invoice 1255 25,083.62 21,518.74 46,602.36

7

6

SSS Amount 22,418.59

SANCS Amount -899.85

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The Billing System

The Statement of Account continued

12

An example of a Statement of Account is shown on the previous page and it includes the following: 1. Details of payments received during the month - in this case July (shown as a negative) along with details of which invoices these funds have been allocated against (Note: For on-budget Treasury funded employers, this will also include monies paid directly from Treasury). Total received = $28,053.07. 2. Opening balance due to Pillar at the beginning of the month preceding the invoice (quoted as the first day of that month), i.e. $24,541.95. Therefore, if we are dealing with the August invoice, the opening balance on the statement is at 1 July. 3. The total of the invoice of the previous month, i.e. $28,594.74. 4. The closing balance of the amount due to Pillar before adding the current month's invoice, i.e. $24,541.95 + $541.67 = $25,083.62. 5. The amount due in respect of the current month's invoice, i.e. $21,518.74. 6. A summary of the outstanding amount including the current month's invoice, incorporated in a tear-off stub that can be attached to the remittance forwarded to Pillar. A Remittance Advice, E STC 206 form may be used as an alternative to the stub (see Remittance Advice on page 32). 7. The total amount due to Pillar, i.e. $25,083.62 + $21,518.74 = $46,602.36.

Note: In the event of an employee transfer, the original employer is billed for its SSS funding liability for the full superannuation period in which the transfer takes place. The new employer is billed from the start of the next superannuation period. For example: If a member transfers on 25 July, the original employer would make contributions for period one (i.e. 01/07 to 28/07) and the new employer would commence contributions for period two (i.e. 29/07 to 25/08).

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The Billing System

12.2 Invoice

12

Z15000 SANCS

The following diagram shows an example of a monthly invoice (which is the first page . following the Statement of Account).

FINANCIAL ACCOUNTANT DEPARTMENT OF CASTLES LOCKED BAG 23 WESTERN HILLS NSW 2000 MEMBER NUMBER 1 NAME 3,959.50 Exit Exit Exit Exit Leave Leave 28/04/2004 28/04/2004 02/07/2004 02/07/2004 10/07/2004 05/05/2002 37,091.00 43,260.00 42,000.00 49,646.00 36,364.00 36,364.00 3,523.90 -77.27 -90.13 87.50 103.43 -1.51 -75.76 TRANS EFFECTIVE TYPE DATE

SALARY (F) (P)

THIS MONTH

PREV MTH ADJMENT

OPENING BALANCE 123456 345678 987654 456789 135790 235689

SMITH DENNIS JOHN CITIZEN JOHN ALAN JONES HELGA THOMPSON BILL MEMBER DAVID

HOLLY DARREN PETER

-1,822.82 -53.30 -132.24 -37.38 -38.37 -2,339.64 -4,423.75

}

4

2

0.025 x SALARY

SANCS EMPLOYER CONTRIBUTION SSS EMPLOYEE STD CONTRIBUTION (Optional) SSS EMPLOYER CONTRIBUTION 1.60 * SSS STD (Optional) INVOICE FOR August 04 NO. 1255

899.85 14,011.62 22,418.59 21,518.74 5

3

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The Billing System

An invoiced explained

An example of an invoice is shown on the previous page and it includes the following:

12

1. Opening balance due to Pillar at the beginning of the month preceding the invoice (quoted as the last day of that month). Therefore, if we are dealing with the August invoice, the opening balance on the invoice is at 31 July, i.e. $3,959.50. 2. A one-line entry in respect of each employee indicating changes to the Basic Benefit contributions. Arrears/refunds are billed on a on-off basis because they are adjustments to previous month's contributions only. Listed are the possible types of adjustments used on an invoice to identify the types of transactions that result following a change to a member's current or retrospective dollar contribution rate. For instance, in the example invoice, members have an adjustment listed due to "Exit" which is used when a member's billing has ceased. Transaction types: Exit ­ reinstatement appear as exits with a negative value. Leave Merge Part-time Salary Transfer 3. After allowing for all changes, Basic Benefit contributions are calculated as a percentage, i.e. 2.5% of the salaries of all contributory members = $899.85. The Basic Benefit contributions are credited to a separate reserve established to meet future SANCS liabilities. 4. The SSS employer contribution is shown in this section of the invoice, i.e. $22,418.59. 5. Invoice total including all items referred to in 3 and 4 above, being the amount to be paid to Pillar in respect to the current month, which is shown as a debit on the Statement of Account, i.e. $21,518.74.

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The Billing System

12.3 Remittance Advice

12

Employers are requested to send a Remittance Advice, E STC 206, form to Pillar when they make their contribution payments. The advice specifies how the remittance is to be allocated. Forms are available from the website at www.statesuper.nsw.gov.au or from the Employer Relationship Officer. Employers who pay their invoices by cheque should include the Remittance Advice or invoice stub with their payments. Where payments are made by direct deposit or EFT, the Remittance Advice may be sent to Pillar via fax or email. The fax number is (02) 42 53 1558 and e-mail address is [email protected] Employers will need to arrange with their depository bank to pay contributions to SSS as follows: Name of bank: Bank Account Name: Bank Address: Bank Account Number: Bank State Branch (BSB): Commonwealth Bank of Australia STC Superannuation Schemes General Account 48 Martin Place, Sydney NSW 2000 1022 6181 062 000

Employer contributions are credited to the employer reserve account on the actual date the funds are received by Pillar.

12.4 Employer Reserves

Pillar does not store SSS employer contributions on an individual member basis. Employer contributions are credited to reserve accounts maintained by Pillar. Employers are classified as either: Part 1 - The Crown and other employers Part 2 - Local Government and other authorities, or Part 3 - Public health organisations.

Note: The Local Government and Energy Employer Order 2002 relocated all Part 2 employers to Part 1. Each employer in Part 1 has a separate reserve. There is a single reserve for all Part 3 employers. Legislation requires that most employers make a monthly payment to fund this reserve. However, many employers fund at a higher rate than specified on the invoice and some fully fund their liabilities, either voluntarily or because it is required by legislation. The employer's contributions are adjusted to take into account periods of LWOP and changes in the number of hours worked by an individual employee. Employer reserve accounts are adjusted for investment earnings, taxation and administration costs, and the amount of emerging benefits. Any deficiencies in funding are required to be met by the employer of the consolidated fund as appropriate.

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The Billing System

Funding holiday requests

12

Requests for a funding holiday should be referred (with supporting documentation) to the STC for consideration. Generally, these requests should be made at the end of the employer's financial year. Where employer contributions are not paid by Treasury, a Reserve account statement (the rolled up billing system RUBS account) is sent to Part 1 employers periodically. An example of the statement is shown on page 34.

Note: Funding holidays do not apply to SES employees. Where an employer has been granted a `funding holiday', superannuation deductions must continue to be made on behalf of SES employers.

12.5 Employer Merge

The need to merge accounts may occur as a result of a government initiative, or can be requested if an employer has multiple cost centres and wishes to consolidate them. Employers must be of the same `Part' classification (see Reserve Accounts). The merge occurs at the beginning of the month following processing. Employers wishing to merge accounts at a specified date therefore need to provide advance notice.

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The Billing System

An example of a Reserve account statement

12

REPORT : SSS0007 PAGE : ZZ OF ZZZ

DATE : DD/MM /YY STATE SUPERANNUATION SCHEME TIME : HH:MM: SS PAGE : 1 COMPANY POOLED SSS EMPLOYER AND SANCS RESERVE ACCOUNT STATEMENT (Month Year) *** Employer Code ­ XXXXXX *** SSS EMPLOYER RESERVE XXX XXX XXX XXX XXX XXX

BASIC BENEFIT XXX XXX XXX XXX XXX XXX

TOTAL

OPENING BALANCE AS AT (START DATE) CONTRIBUTIONS RECEIVED MANUAL ADJUSTMENT TRANSFERS FROM EMPLOYER TRANSFER TO EMPLOYER LUMP SUM BENEFIT PAID: : WITHDRAWALS RETRENCHMENTS NORMAL RETIREMENTS EARLY RETIREMENTS DEATH INVALIDITY (PERM) INVALIDITY (TEMP) COMMUTED PENSION EMERGED BENEFIT INTEREST PAID DEFERRED BENEFITS PAID PENSION: PAYMENTS PAYMENT REVERSALS

XXX XXX XXX XXX XXX XXX

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

TRANSFERS FROM MEMBERS RESERVE TRANSFERS TO DEFERRED BENEFITS RESERVE EXTRAORDINARY: RECEIPTS PAYMENTS

DISTRIBUTION INTEREST EMERGED BENEFIT INTEREST TRANSFER IN MANAGEMENT CHARGES CONTRIBUTION TAX ALLOCATIONS SURCHARGE TAX ALLOCATION CLOSING BALANCE AS AT (END DATE)

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The Billing System

12

The entries, which appear on the reserve account statement and an explanation of the terms used, are as follows:

Statement Entry

Transfers to deferred benefits reserve Extraordinary receipts Extraordinary payments Distribution interest Emerged benefit interest transfer in Management charges Contribution tax Surcharge levy (15% capped) Closing balance

Description

The Basic Benefit in respect of members that elect to have their benefit deferred. Amounts remitted to the administrator not related to the monthly billing system processed as an extraordinary receipt (e.g. An amount to cover a deficiency in the previous statements). Special charges not related to benefit payments (e.g. contingent charges). Interest based on the investment earnings of the fund is given if the Account is in credit, and charged if the Account is in debit. However, negative earnings for a month can result in the opposite. Interest credited to the employer reserve to offset `Emerged benefit interest paid'. Employer's portion of administration expenses. Commonwealth tax payable on contributions. The amount of surcharge above the 15% cap on the amount charged to the member (restricted by legislation). Balance at the end of each month, carried forward as the opening balance for the next month.

12.6 Employer on-cost

When a contract employee commences employment, the employer must decide whether the employee has to pay the employer cost of superannuation contributions as part of their package. If so, the employer on-cost is deducted from the employee's pre-tax salary, which is based on their superable salary. No adjustment is made to the employee's SSS account. Any on-cost amount which is in excess of what Pillar has billed can either be held by the employer or forwarded to Pillar. Any pre-tax contributions paid to Pillar that are in excess of the normal billed employer contributions should paid as "extraordinary" payments to the employer reserve.

Note: Pillar's method for calculating the employer on-cost for contract employees is the same method that is used for SES members.

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The Billing System

Employer on cost percentage

12

The employer on-cost percentage should be requested from Pillar when calculating the salary component of the employee's contract. The value is actuarially determined and does not vary from year to year. The employer on-cost percentage is determined by the employee's age on joining the scheme and gender. The on-cost percentage is also dependent on whether the employee joined the scheme before or after 1 July 1963. The formula for the calculation of the on-cost amount takes into account the number of days (if any) between the employee's birthday and the date of commencement of the contract of employment. A maximum percentage of 27.5%, plus the 2.5% Basic Benefit liability. After an employee has reached the scheme's normal retirement age, the employer on-cost become as zero, with the 2.5% Basic Benefit remaining payable. The formula to calculate the maximum nominated superable salary is: MAX = T-S divided by (1.025 + C) T= S= C= is the total remuneration package any other employer on-cost superannuation arrangement (which in most cases will be nil). the package on cost value from the employer on cost table

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Forms

13.1 Employer forms

E SSS 503 Advice of SSS member ceasing employment or aged 65 and over wishing to be paid a benefit E STC 200 Supplies of forms required E STC 206 Remittance Advice E STC 222 Change in hours worked (CIHW) E STC 223 Member's taking full-time ordinary LWOP (for more than 5 consecutive days) Employee Variation/Change of Personal Details Notification

13

To be used to advise of members ceasing employment, or for members over 65 who are still working but wish to be paid their benefit. To be used for ordering your form stocks. To be used when remitting contributions to Pillar. To be used to advise when a member changes employment status so that the accrual of entitlements and contribution rates (if applicable) can be adjusted. To be used to advise about any employees who have applied for and been granted more than 5 continuous days of full-time ordinary LWOP. To be used to advise any changes that occur to a member's record. To be remitted with the SSS electronic processing in the relevant period.

The following tables list the forms available via the website or by contacting Customer Service

13.2 Member forms

SSS 511 To be completed by the member to claim payment or to Application for payment (or deferral) of defer a benefit. benefits on retrenchment SSS 512 Application for payment or deferral of SSS benefits SSS 513 Declaration of member's dependant SSS 515 Application for payment of a previously deferred SSS benefit SSS 521 Election to commute SSS pension to lump sum SSS 529 Choice of contribution rate on reduction in salary SSS 536 LWOP (Part time or full time) members election SSS 537 Payment of contributions while on leave without pay (LWOP)

SSS Employer Easy Reference Guide www.statesuper.nsw.gov.au January 2007

To be completed by the member to claim payment or to defer a benefit. To be completed by the member's dependants for payment of spouse/partner, student or child pension. To be completed by the member to claim payment of a previously deferred benefit. To be completed by the member to commute SSS pension to lump sum. To be completed by the member if they wish to reduce the number of units for which they are currently contributing. Employer needs to complete section on the back of the form before giving form to member to complete. To be completed by full-time employees intending to commence more than 3 months ordinary LWOP, or parttime employees commencing any form of LWOP. To be completed by the member for contribution payments while on LWOP.

37

Forms

13.2 Member forms continued

STC 204 Tax File Number collection STC 207 Change of personal and banking details STC 226 Certificate of enrolment full time study STC 227 Certificate of incapacity STC 228 Confidential medical report on incapacity STC 232 Mobility application to transfer membership from LGSS or EISS to SSS

13

To be completed by the member when providing their tax file number to the scheme. To be completed by the member when their personal details require updating. To be completed by full time students (over age 18) when applying for payment of pension benefits. To be completed by 2 medical practitioners if a member exits on the grounds of incapacity. To be completed by the member and member's medical practitioner. This forms part of the member's application for payment on the grounds of incapacity. To be completed by members applying to transfer membership from LGSS to EISS to SSS. This form is available to members on request.

The following tables list the forms available via the website or by contacting Customer Service

STC 235 To be completed by the member to advise what they want Chief or Senior Executive Officer to do with accrued benefits from SSS. -- your choice about your existing accrued contributory benefit and Basic Benefit STC 238 Continuity of scheme membership To be completed by the member if they are leaving their present employment and commencing a new job with another SSS employer within 3 months.

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Publications & Seminars

14.1 Publications

14

There are a number of publications available to help employers and members understand more about SSS and superannuation issues, including -

· Super Views · Annual Report and Report to Members (previously Annual Report Highlights) · Investment Performance and Update

The following Fact Sheets provide detailed information about the benefits available from SSS.

Number 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 SSS Title

Salary for superannuation purposes Unit Entitlement Contributions Part-time employment and part-time leave without pay Break in employment Normal retirement benefit Early Voluntary retirement benefit Invalidity Retirement benefit Death of a scheme member before retirement Death of a scheme member after retirement Child pensions ILD PENSIONS CPI Adjustment of your pension Exchanging your pension for a lump sum Resignation (withdrawal) benefit Retrenchment Benefit Optional Deferred Benefit Taxation Contributions and Benefits up to age 70 Contributions Arrears

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Publications and Seminars

14

Number 1 2 4 5 6 7 8 9 10 11 12 13

STC Title

Information about the Commonwealth Contributions Surcharge Tax Early release of superannuation benefit on grounds of severe financial hardship When can I be paid my superannuation benefits? Retiring or resigning? What you need to know for payment of your benefit Early release of a superannuation benefit on compassionate grounds Complaints, Disputes, Appeals and Freedom of Information (FOI) Calculation of superable salary oncost liability and membership options for members of the Chief and Senior Executive Service (SES) Freedom of Information and Privacy Statement Basic Benefit Reasonable Benefit Limits (RBLs) Payment of surcharge assessments received after being paid a benefit or pension commencement Information about the Commonwealth Government's Superannuation Co-contributions

14.2 Pre-Retirement Seminars

Pre-Retirement Seminars are held on a regular basis for members nearing retirement age. Invitations are automatically issued to these members. Members can obtain information about the seminars by emailing [email protected]

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Glossary

Abandoned Units

15

Units to which a member is entitled but for which they have elected not to contribute. New units which accrue to a member can be abandoned on an Annual Adjustment Day if their contributions exceed 6% of salary. The State Superannuation Scheme's governing statute, the Superannuation Act 1916. Four-weekly advice of payroll deduction variations to SSS member contributions for normal and reserve units. The Notification of variation - 4 weekly advice, SSS 508 form, is the advice sheet. The annual statement issued to members in the second half of the year showing their accrued benefit entitlements in SSS. The day on which each member's entitlement to additional units is reviewed, to be adjusted from their Annual Adjustment Day. This day is 9 February for members born in the second half of the year and 28 July for others. The day from which any adjustments to a member's contribution rate, following the Annual Review Day, will take effect. This day is 5 May for members born in the second half of the year and 21 October for others. Productivity-type superannuation benefit accrued by SSS members in addition to their contributory scheme benefits. Calculated at 3% of final average salary or final salary, depending on the mode of exit, for each year of service from 1 April 1988. It is fully employer-financed. Made by the Commonwealth Government to match personal contributions made into superannuation funds by eligible persons. The exchange of all or part of a pension benefit for a lump sum. The number of units for which a member is contributing. The difference between a member's unit entitlement and contributed units is generally the number of abandoned units. An employee who is a member of the SSS. A benefit that is based on a member's final or final average salary upon exit of employment. The formula for calculating a defined benefit may (as in the case of SSS) also take into account the member's length of membership and level of contributions made. The age of 55 years (for a person contributing for retirement at age 60 years), provided they have 10 years continuous membership in the scheme. A method for employers to send and receive data (securely and efficiently) via Pillar's website. The employer's reference code for an employee, often known as the serial number. Pillar can accept up to seven characters in this code.

Act Advice sheet

Annual Benefit Statement Annual Review Day

Annual Adjustment Day Basic Benefit

Commonwealth Government Co-contributions Commutation Contributed units

Contributor Defined benefit

Early retirement age E-Business Employee number

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Glossary

Employer code

15

The SSS 6 character identification number issued by Pillar. This is the reference code for the employer's accounts and for employee contributions remitted via advice sheets. It is important that this code is used on all SSS forms and correspondence. The date that the employee ceases employment with an employer. The annual salary for superannuation purposes paid or payable to a member at their exit date, as specified in the Act. The superannuation scheme established by the NSW Government to cover all new public sector employees from 8 December 1992. FSS accepts employer Superannuation Guarantee contributions required to be made under Commonwealth legislation (which may include contributions for SSS members who have such an entitlement in respect of employment separate to that relevant to their SSS membership). A FSS Easy Reference Guide for employers is available from Pillar. An invalidity benefit is payable from the scheme where a member is retired on the grounds of invalidity or physical or mental incapacity to perform their duties as determined by the STC. Also known as ill-health or breakdown benefit. Each member has a six digit number which is unique and does not change for their period of continuous membership of the scheme. It is also known as the file number or superannuation number. Age 60 years, or 55 years for a woman contributing to retire at that age.

Exit date Final salary First State Super (FSS)

Invalidity benefit

Member number

Normal retirement age Pillar Reduced value units Reserve units Roll Salary Salary Ratio

Pillar Administration, the contracted scheme administrator for SSS. Abandoned units at exit which retain some benefit, the cost of which is met by the employer. Also known as non-contributed units. Units for which a member contributes in advance, in order to substitute them for ordinary units at a later date. The list of SSS members forwarded to employers prior to the relevant Annual Review Day, for update of annual salaries. The annual amount, for superannuation purposes paid or payable to a member, as specified in the Act. The ratio of the annual part-time salary to the annual full-time salary (i.e. part-time salary divided by full-time salary). The salary ratio for full-time employees is 1 and the salary ratio for part-time employees is less than 1. The State Authorities Non-contributory Scheme includes the Basic Benefit and Commonwealth Government Co-contributions.

SANCS

SSS Employer Easy Reference Guide www.statesuper.nsw.gov.au January 2007

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Glossary

SASS

15

The State Authorities Superannuation Scheme is another scheme administered by Pillar on behalf of the STC. It closed to new members on 19 December 1992. A SASS Easy Reference Guide for employers is available from Pillar.

SES Shortfall benefit Spouse/De facto partner

Senior Executive Scheme employees. See Superannuation Guarantee Benefits. A spouse means the widow or widower of the member. A de facto partner is a person who, at the time of the member's death, was living with the member in a de facto relationship within the meaning of the Property (Relationships) Act 1984. A de facto partner may be a person of either the opposite sex, or if the deceased died on or after 19 January 2001, the same sex. The SAS Trustee Corporation (the scheme Trustee) as constituted by the Superannuation Administration Act 1996. Since 1 July 1992, member's employer-financed benefits have been automatically increased by the scheme administrator, where necessary to meet Commonwealth Superannuation Guarantee requirements. That is, to avoid a shortfall in the provision of at least the required minimum employer financed benefits. There are 13 four-weekly SSS superannuation periods each year. The dates of the periods are fixed and period one commences on 1 July each year. Employee contributions deducted from salaries should be forwarded to Pillar within seven days of the end of each period. Also known as a contribution period. See 7.2 Employee Contributions/Advice Sheets for the start and end dates of each period. The number of units of pension for which a member is entitled to contribute based on the salary for superannuation purposes.

STC Superannuation Guarantee Benefits

Superannuation period

Unit entitlement

SSS Employer Easy Reference Guide www.statesuper.nsw.gov.au January 2007

43

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SSS Employer Reference Guide

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