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Public sector super funds are a type of super fund that are generally only available to people working in the public sector. This includes people working in government related roles. These funds operate in a similar way to standard retail or industry super funds, however they can sometimes have a few extra benefits and features which we'll outline in this guide.
Public Sector super funds come with certain features that benefit employees of federal and state government departments. These funds generally have lower fees with profits going back to their members rather than shareholders. In addition, some employers contribute more than the 9.5% compulsory superannuation guarantee towards super for employees in the public sector fund, which is a major benefit.
Generally, long-term members of public sector super funds have defined benefits funds while newer members tend to have an accumulation fund.
The Public Sector Superannuation Scheme (PSS) was established under the Superannuation Act 1990 exclusively for employees of the Australian Government. Since 1 July 2005, no new members have been allowed to join the PSS. However, if you’re a PSS preserved member or PSS invalidity pensioner, you may be able to rejoin the PSS as a contributing member.
The PSS is a defined benefit super fund with an accumulation component for any members with transferred amounts and/or super co-contributions.
Only contributing members can put money into their super or receive employer contributions. The benefit provided to contributing members of the PSS is defined by the final average salary and an accrued benefit multiple.
In the PSS, your employer makes contributions in two different ways:
If you invest with the PSS, you’ll receive a number of benefits that will help boost your retirement savings. Here’s a few of the benefits you receive:
To find out about the risks associated with the PSS, check out the infographic below.
Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.
For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your return by up to 20% over a 30-year period.
If you’re a member of the PSS, you don’t pay any administration, switching, exit or any other ongoing administration fees as these costs are covered by your employer (or your former employer if you’re a preserved member).
Death, partial invalidity and invalidity retirement benefits are available through the PSS to help protect your current lifestyle and provide for you or your family in the event of sickness, injury or death.
The calculation of an invalidity retirement benefit for contributing members under age 60 depends on a number of factors including:
A partial invalidity pension is a form of income maintenance. It’s paid as a pension when your salary is permanently reduced due to a medical condition. A partial invalidity pension is not paid where a member:
Death benefits are payable to your spouse and/or children should you die while you are a contributing member, a preserved member or after retirement provided you were receiving a PSS pension.
If you die while you are a contributing member and were not a limited benefits member, the pension payable to your dependants will be a percentage of the invalidity pensions that would have been payable had you retired on invalidity grounds.
Back to topA public sector fund is only available to public sector (government) employees, and in some cases, former government employees. You can’t choose a public sector fund although some of them let you choose to remain a contributing member when you leave the public sector.
In these circumstances, you may be able to arrange for your new employer to contribute to your public sector fund. As of December 2015, there are 19 public sector super funds.
From 1 July 2005, no new members are allowed to join the PSS. However, if you’re a PSS preserved member or PSS invalidity pensioner, you may be able to rejoin the PSS as a contributing member.
So if you’re trying to apply for a public sector super fund, most likely, you won’t be able to do it unless you’re a preserved member or PSS invalidity pensioner.
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I have been a member of the PSS since 2001. Due to injury/illness, I for the past 2 years I have not been able to return to work. I m on a Sickness Allowance payment from Centrelink for the past 26 weeks continuously. Due to the small fortnightly amount, and currently possessing nil assets, I need to access my super based on financial hardship. PSS says I qualify but first I require an ATO approval letter. I am not sure how to get this letter and the ATO website provides no clear way of obtaining this letter. Can you provide me with guidance on how I can obtain this letter so I can begin my early release application?
Hi Aaron,
Thanks for getting in touch with Finder. I’m sorry to hear about your situation.
To obtain the ATO approval letter, you would need to first create an account using the my.gov.au website. From there, you can then use an online form to apply for early access of your super.
For ATO to give you their approval, you would need to present digital copies of the required evidence of why they should approve your application. They accept photos of documents. You can then submit your application form and supporting documents to the ATO.
If the ATO approves the application, you will get a notification through your MyGov Inbox. The ATO will also notify your super fund about your approval.
If you are still having problems, please directly get in touch with ATO.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua