I attended a function last week put on by the Superannuated Commonwealth Officers’ Association (SCOA) and the Defence Force Welfare Association.
Both organisations have concerns about the way Commonwealth superannuation is indexed and I share their concerns.
Back in June, Senator Nick Sherry, Minister for Superannuation & Corporate Law, announced a review of the indexation of Australian Government Super schemes. The review is looking at:
* Whether the purpose of indexation in these schemes meets the obligations of the Australian Government as an employer; and
* Whether indexation of superannuation pensions by growth in the CPI, over a specified period, is an appropriate measure and/or whether there are more appropriate measures.
SCOA have put the problem succinctly in the following graph:
The current indexation method is linked to the Consumer Price Index. SCOA are proposing this be changed to Male Total Average Weekly Earnings (MTAWE) or CPI, whichever is greater. The impact of having indexation based on CPI alone is that public sector and defence force superannuates are having their living conditions eroded which in turn is producing a ripple effect throughout our community.
Moving to a more equitable indexation method is a change that I wholeheartedly endorse, and one that I hope is recommended and implemented through Senator Sherry’s review.
