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Indexation of Superannuation

Support for ACPSRO in Changing the Way Super is indexed

 

ACPSRO (Australian Council of Public Sector Retiree Organisations) is a body comprised of organisations representing the interests of people belonging to public sector defined benefit superannuation schemes that pay the defined benefit as an indexed lifetime pension. SA Superannuants is an affiliate of ACPSRO.

With the exception of one military pension scheme the defined benefit pensions of all ACPSRO affiliates are indexed to the Consumer Price Index (CPI) and for many years the organisation has been seeking a change which would see the pensions indexed on the same basis as the age pension.

Age pension indexation occurs in line with either CPI changes or wage increases, whichever is larger. For most of the last 30 years wages increased at a rate significantly greater than the CPI and so the age pension increased at a greater rate than defined benefit pensions. More recently wage growth has been relatively slow and there has not been much difference between the rate of increase in the age pension and that for defined benefit pensions. Over time, though it seems likely that wage growth, and therefore age pension growth, will run ahead of the CPI. So the policy of seeking age pension indexation for defined benefit pensions continues.

By mutual agreement of all its affiliates ACPSRO is concentrating its efforts on getting the Commonwealth Government to adopt age pension indexation for Commonwealth Superannuation pensions. It is considered unlikely that any state government will make this change without the Commonwealth Government having done so.

SA Superannuants has approached the South Australian government on the indexation issue and the response was that there would be no consideration given to moving away from CPI indexation for Super SA pensions while it still applied to Commonwealth superannuation pensions.