DATE OF ISSUE: 18 September 1991
WESTPAC STAFF SUPERANNUATION
INTRODUCTION
The purpose of this instruction is to advise of the policy to be applied when assessing the effect on pensions of commutations for the Westpac Staff Superannuation Scheme.
BACKGROUND
Employees of the Westpac Banking Corporation are entitled to superannuation which may be taken in the form of a pension which may then be commuted to a lump sum payment every seven years. The amount of the lump sum is calculated actuarially to provide the equivalent income stream to 5 years pension if it was invested.
POLICY
Current Department of Social Security policy is to disregard these commutations. In view of a divergence of opinion between the two departments and the complexities of lump sum commutations, it has been decided to refer this matter to the Investment Review Committee set up from the August 1991 Budget. In order not to disadvantage veterans, it has been decided as an interim measure to disregard the lump-sum resulting from commutation of Westpac pension, when assessing income for service pension purposes.
This policy will remain in force for up to two years pending deliberations which may be undertaken by the Investment Review Committee. If the IRC has not provided satisfactory solutions within the two year term of this policy, a further consideration of pension assessment in light of the information available at the time, may result in legislative changes.
Income from the subsequent investment of this lump sum should continue to be assessed in the normal way. Any cases already assessed holding the lump sum as income for 12 months should be retrospectively reassessed applying this instruction.
It should be noted that this instruction only applies to the staff superannuation scheme for employees of the Westpac Banking Corporation. Any other products which provide for multiple commutations should be referred to Income Support Branch in Central Office for a ruling on their assessment.
FELICITY BARR
A/G NATIONAL PROGRAM DIRECTOR
(BENEFITS)