CHAPTER 5

25th Report of the Senate Select Committee on Superannuation
THE PARLIAMENTARY CONTRIBUTORY SUPERANNUATION SCHEME & THE JUDGES' PENSION SCHEME
TABLE OF CONTENTS

CHAPTER 5

CONCLUSIONS AND RECOMMENDATIONS

5.1 The Committee considers that the Commonwealth Judges' Pension Scheme has a greater role than just being part of a remuneration package for judges. The pension scheme assists in the underpinning of judicial independence. The Committee believes that secure and adequate judicial remuneration, during retirement as well as during service, is essential to judicial independence.

5.2 In the recruitment of judges, the pension scheme plays an important role. While remuneration is only one factor in a prospective judge's decision about whether to accept an appointment, it is true that, for many, judicial appointment entails a considerable financial sacrifice.

5.3 The Committee considers that senior barristers will remain the primary source of recruitment to the judiciary, at least for the foreseeable future. While the Commonwealth cannot match remuneration levels common at senior levels of the bar, the judges' pension scheme clearly assists in making judicial appointment more attractive.

5.4 In relation to the unfunded nature of the scheme, the Committee accepts the Australian Government Actuary's view that the relatively small size of the scheme means that it is not necessary to make the scheme fully funded. [2] The Committee is simply not persuaded that funding is an important issue, or necessarily relevant, in relation to this scheme.

5.5 Nor does the Committee consider appropriate the replacement of the scheme with an accumulation style superannuation fund. This would give rise to sensitive issues, such as the investment of judges' superannuation monies, which might be perceived to affect the independence of judges in deciding cases having economic consequences.

5.6 Clearly , the scheme is not ideal for all judges in all situations. What scheme possibly could be? However, the Committee is satisfied overall that the scheme is appropriate, and that no major transformation is warranted.

 

Conclusions and Recommendations

Conclusion 5.7:

The Committee concludes that the judges' pension scheme should be retained, with minor amendments as recommended below.

Conclusion 1.43:

The Committee takes the view, on the evidence it has received, that the judicial pension scheme does indeed have a greater role than just being part of a remuneration package. The Committee recognises that judicial independence is a guarantee of the impartiality of the judiciary, which underpins the federal nature of the Commonwealth, and the protection of individual rights. The Committee shares the widespread view that secure and adequate judicial remuneration, during retirement as well as during service, is essential to judicial independence.

Recommendation 3.1

The Committee recommends that the Judges' Pensions Act 1968 be amended to provide for an actuarially reduced life pension to be paid to a judge who retires under age 60 after ten or more years service, but who has attained the age of 55.

Recommendation 4.1

The Committee recommends that survivor and invalidity benefits continue to be paid to beneficiaries of the judges' pension scheme. However, as in the case of the parliamentary scheme, the Committee considers that the rules under which these benefits are paid should be reviewed to ensure they are in accordance with community standards.

Recommendation 4.2

The Committee recommends that the Judges' Pensions Act 1968 be amended to provide for an option for a judge to elect to have his or her pension commuted on retirement, or on death before or after retirement, to the extent that would provide a lump sum equal to one year of the yearly pension to which the judge was entitled at the date of the retirement or death.

If such an election is made, any pension subsequently payable to the judge, spouse or dependant, is actuarially reduced by the value of the commutation so that the total value of benefits paid is the same as if there had been no election.

(signed)

Senator John Watson

Chairman

 

 

Footnotes

[1] Evidence, Justice Davies, p. 39.

[2] The Actuary noted that the costs of the judges' pension scheme "actually is of no great financial consequence in the context of the Commonwealth's revenue" (Evidence, p. 86).