Appendix 3
Comparison of death and ill-health benefits from the PCSS and AGEST
Details of the death and
invalidity arrangements for the PCSS are provided at Attachment A, and those for AGEST
are at Attachment B.
The following table summarises
the general features of the two arrangements.
Summary Table - Death and Ill-Health Benefits from the
PCSS and AGEST
|
PCSS |
AGEST |
Commencement
of cover |
Cover starts on day the MP becomes entitled to
parliamentary salary. |
Subject to certain conditions, automatic cover
commences when an employer contribution is received.
Member is able to opt out of automatic cover.
Also cover is not available for those over age 70. |
Benefits |
Death
A
pension is payable to an eligible partner equal to five sixths of the rate of
pension that the deceased member was being paid or is deemed to have been
payable. |
Death
Amount
in the member’s superannuation account plus death cover, if any. |
Invalidity
Applies
where the Parliamentary Retiring Allowances Trust is satisfied that the MP is
unlikely, because of physical or mental impairment, ever to be able to
perform the duties of an MP again.
At
least 8 years service or 3 terms1
Pension
equal to the retirement pension that the member would be entitled to. The
minimum pension would be 50% of backbench salary.
Less
than 8 years service or 3 terms1
60% or
more incapacity - pension of 50% of backbench salary.
30% to
60% incapacity – pension of 30% of backbench salary.
Less
than 30% incapacity - lump sum equal to three and one third times the
member’s contributions.
1
A
term occurs on the dissolution or expiration of the relevant house or the
expiration of the MP’s term of office. Senators, who are elected for six
years, achieve a term after completing three years and another term at the
completion of the six years. |
Invalidity
Applies
where the MP is totally and permanently disabled (TPD) within the terms of
the insurance policy (see page 18 of attached document).
The
TPD benefit comprises the amount in the member’s account plus any TPD Cover.
TPD
Cover is available either as:
-
unit
based cover,
where the level of cover decreases with age for the same level of premium; or
-
fixed
cover, where
the cost of obtaining the same level of cover increases with age. |
ATTACHMENT A
Death and invalidity arrangements
in respect of PCSS members
For the PCSS, the relevant
provisions relating to invalidity and death benefits are contained in Part V of
the Parliamentary Contributory Superannuation Act 1948.
Invalidity Retirement Benefits
under the PCSS
Members of the PCSS are entitled
to an invalidity benefit if the Parliamentary Retiring Allowances Trust is
satisfied that the MP is unlikely, because of physical or mental impairment,
ever to be able to perform the duties of an MP again.
Where the member has completed at
least eight years service or three terms he or she will be entitled to a
pension. The pension is based on the service completed by the member with the
minimum pension being equal to 50% of backbench salary.
Where the member has not
completed sufficient service or terms, the form and value of the invalidity
benefit will depend on the extent of the person’s incapacity in relation to
non-parliamentary employment.
The three
classes of invalidity are:
-
class 1 – 60 per cent to 100 per
cent incapacity, with a benefit of a non‑commutable pension of 50 per
cent of backbench salary, which is subject to review;
-
class 2 – 30 per cent to 59 per
cent incapacity, with a benefit of a non‑commutable pension of 30 per
cent of backbench salary, which is subject to review; or
-
class 3 – less than 30 percent
incapacity, with a benefit of a lump sum of three and one third times the
member’s own contributions.
Death benefits under the PCSS
Benefits payable to an eligible
partner
A reversionary pension is payable
to an eligible partner of a member. The reversionary pension is equal to five
sixths of the rate of the pension to which the member is being paid or would
have been entitled to be paid.
If the member died while a MP and
had not completed eight years service, he or she is deemed to have completed
eight years service for the purpose of calculating the amount of the pension.
Benefits payable
to orphan children
A reversionary pension is payable
to any eligible children of a member who dies while a MP or is being paid a
pension, provided the member is not survived by an eligible partner who is the
natural or adoptive parent of the child and who is entitled to a reversionary
pension.
To be eligible child, a child
must be under 16, or under 25 if a full-time student, and have been dependent
on the member, at the time of his or her death.
Benefits payable to a personal
representative
In accordance with the formula
specified in section 19AB of the Parliamentary Contributory Superannuation
Act 1948, a lump sum may be payable to the personal representative of a
deceased member who is not survived by an eligible partner or eligible child.
ATTACHMENT
B
Death and Invalidity Benefits for
MPs who are AGEST members
AGEST is the default fund for
parliamentarians who entered Parliament on or after 9 October 2004.
For AGEST members the benefits
payable on death or total and permanent disablement comprise the member’s
superannuation account balance plus any insurance cover that they have
purchased.
Specific information on insurance
cover available for members of AGEST can be found at pages 15 to 24 of the
AGEST Product Disclosure Statement dated 1 January 2009. The
relevant pages are attached.
If a Parliamentarian chooses a
fund other than AGEST, insurance will depend on the specific arrangements that
are available within that scheme.
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