News

D&D settlement explained (Pt 3)

June 6, 2002

Options for SASS members

The State Authorities Superannuation Scheme (aka “the middle scheme”, or SASS) operated between July 1985 and December 1992, when it was replaced by FSS. Only permanent firefighters who joined the Brigades in that period were eligible to join SASS, and there are now approximately 650 members in that scheme.

Unlike FSS, SASS does provide a PPI benefit. However, that benefit was effectively eroded by subsequent Commonwealth superannuation laws which require that lump sum super payments like the SASS PPI benefit must be preserved. In other words, you can’t get your hands on any of the PPI benefit until you reach retirement age. Generally, the only exceptions to this preservation rule are for death and TPI lump sums, and non-commutable lifetime pensions (like SSF).

Unlike FSS members, SASS members will be afforded three D&D options:
1. opt out of the new D&D arrangements altogether and pay nothing extra;
2. be covered by the new D&D arrangements for PPI only at a cost of 0.5%; or
3. be covered by all of the new D&D arrangement at a cost of 1.5% of salary.

All of these options depend on each SASS member’s choice with regard to the SASS “Additional Benefit Cover” (ABC). ABC is an insurance option available to SASS members, although once you join it you can’t opt out of it. It costs participating members around $90 per year, and provides for enhanced benefits in the event of death or TPI (but not PPI).

As part of the proposed D&D settlement, the Government will bring forward legislative amendments in the Spring session of Parliament which will allow SASS members a once-only opportunity to exercise one of the above three options. Whilst the Union’s officials cannot and will not be recommending any particular option, we’ve provided the following example to give individual SASS members a better idea of their choices. This example is based on an actual 45 year old Senior Firefighter who joined SASS in 1989, and who has the Additional benefit Cover. His last annual superable salary (as determined by SASS) was $46,683 as at 31 December 2000.

Option One

If this member chose to stay with the SASS Additional Benefit Cover, then he would continue to pay for that cover ($83.94 last year) but wouldn’t pay anything for D&D. He would receive $293,197 from SASS in the event of death or $277,717 in the event of TPI (either on or off-duty), but in the event of PPI (either on or off-duty) then he wouldn’t be entitled to any the D&D agreement’s PPI benefits, and his SASS PPI benefit of $128,823 would have to be preserved until he reached age retirement age in another 15 years.

Option Two

If he chose to be covered for the D&D agreement’s PPI cover only, and as a result therefore stayed covered for death and/or TPI by the ABC under SASS, then he’d have to pay 0.5% of salary ($233.42) for the D&D and $83.94 for the ABC benefit.

He would receive $293,197 from SASS in the event of death or $277,717 in the event of TPI (either on or off-duty), but would receive no additional D&D benefit. In the event of PPI, his SASS benefit of $128,823 would still need to be preserved, although he would also beimmediately entitled to the D&D agreement’s PPI cover, which would be:

• for on-duty PPI, $200,736; or

• for off-duty PPI, $93,366. 

(Note 1 – both PPI examples above presume immediate exit rather than any redeployment or retraining).
(Note 2 – theD&D agreement’s PPI benefit will be an insurance-type lump sum rather than a superannuation benefit, and unlike the SASS benefit will therefore be able to accessed immediately.)

Option Three

If he chose to abandon the ABC cover under SASS altogether, thereby opting for full D&D cover instead, then he would pay the 1.5% cost of the full D&D cover ($700.25) but would longer pay the ABC cover of $83.94.

From SASS he would receive the standard (ie non ABC) of $144,429 in the event of death, or $128,854 in the event of TPI (either on or off-duty) plus the additional D&D death or TPI benefit, which would be:

• for on-duty, an additional $560K; or

• for off-duty, an additional $250K. 

In the event of PPI, his SASS PPI benefit of $128,854 would again need to be preserved, although he would immediately qualify for the D&D agreement’s PPI benefit, which would be:

• for on-duty PPI, $200,736; or

• for off-duty PPI, $93,366. 

(Note 1 – both PPI examples above presume immediate exit rather than any redeployment or retraining).
(Note 2 – theD&D agreement’s PPI benefit will be an insurance-type lump sum rather than a superannuation benefit, and unlike the SASS benefit will therefore be able to accessed immediately.)

My apologies go to all members if this explanation appears confusing, however the issue is complex (as is the negotiated agreement generally) and it is all but impossible to explain it any more simply in a notice such as this. Members with any queries should email the Union office or, better still, attend one of the forthcoming SGM’s.

Chris Read
State Secretary