The Federal Government has passed legislation that will reform the governance of Commonwealth military and civilian superannuants through improved control arrangements.

 

The Senate passed a set of three bills that will consolidate the trusteeship of the Commonwealth’s main military and civilian superannuation schemes, with an aim to modernise the governance of administration of these arrangements.

 

Minister for Finance and Deregulation Senator Penny Wong said the trustee consolidation was an important reform that will benefit all scheme members.

 

“The establishment of Commonwealth Superannuation Corporation (CSC) as the consolidated trustee will help secure increased superannuation benefits for thousands of military and civilian scheme members,” Senator Wong said.

 

The set of legislation passed with the support of the Australian Greens and Senators Steve Fielding and Nick Xenophon..

 

The Minister Assisting on Deregulation and Public Sector Superannuation, Senator Nick Sherry, said the changes will combine more than 680,000 members and pensioners, with funds totalling more than $21 billion. 

 

“Consolidation of the funds will produce a more efficient trustee operation and better services for all members,” Senator Sherry said.

 

The Federal Government has said that scheme members, particularly serving and former Defence Force personnel, will benefit from an increase in investment scale, including better investment returns and lower fees.

 

These changes will enable the Military Superannuation and Benefits Scheme to produce better financial returns. Modelling suggests members of the Australian Defence Force could receive up to a $95,000 increase in their superannuation benefit if net investment returns are improved by 0.5%.

“These reforms will deliver financial benefits for more than 90 per cent of current serving members in the ADF,” Mr Snowdon said.

 

The reforms do not alter the superannuation entitlements of civilian and military superannuation scheme members.  These are governed by separate legislation. The new governance arrangements will commence on 1 July 2011.