Introduction
In 2006, TFS reduced superannuation payments for new employees to the minimum superannuation guarantee level, which at the time of writing is now 10%.
TFS employees generally fall into one of three categories with regard to superannuation.
Employed before 1999 defined benefits scheme, which had contributions of 14% comprised of an existing 11% contribution and an additional 3% paid in super with was gained by trading off a pay rise in the 80s.
People who were employed between 1999 and 2006 or people who partly opted out of the defined benefit scheme received 14%, with 11% contribution to the defined benefit scheme and 3% being contributed to an accumulation fund if the employee also contributed 2%.
People who were employed after 2006 receive the superannuation guarantee rate, currently 10% contribution to their chosen accumulation fund. These employees do not have the option to contribute 2% and receive an additional 3% in employer contributions.
It should be noted that not all TFS personnel fall into one of these two categories, but the vast majority of members do.
The 5% reduction in superannuation accumulation means Firefighters cannot afford to retire early as they have done in the past. Unfortunately, Firefighters are rarely able to continue to effectively perform fire fighting and rescue duties right up to the age of 67, which means there is an emerging generation of Firefighters who will not be able to work to 67 and also will not have enough superannuation to retire early.
Firefighters should not be forced to retire into poverty.
Fixing the Issue
While TFS has not yet made a commitment to find other work for Firefighters who are no longer able to work on the front line, the only viable solution is to restore higher superannuation payments.
The superannuation guarantee (the minimum super payment) is legislated under federal law. The Public Sector Superannuation Reform Act 2016 (Tas) requires that the minimum payment will be made for State Service employees in Tasmania, with exception for some workers who were employed before 1 March 2006.
This presents two viable options. We can put pressure on the state government to change state legislation or we can put pressure on the federal government to increase the minimum legislated payment for first responders to allow for early retirement due to the physical nature of emergency response.
State Government
The EBA provides an opportunity to negotiate an increase to superannuation payments, which depending on the legal status, might need to sit in a separate document. It is expected that the government will not agree to increase superannuation payments unless significant pressure is placed upon them through industrial action and community campaigns.
If members are not able to secure increased superannuation payments in the current EBA negotiations, members should consider that the next EBA will roughly coincide with a state election, which will allow members to apply additional pressure on the government with respect to the superannuation policy and law reform.
Federal Government
The UFU has successfully lobbied Tasmanian Labor and Australian Labor to include increased superannuation for first responders in their respective policy platforms. This does not automatically mean that Labor will implement this into law if they are elected to government, additional lobbying will be required should they win government.
Liberal governments generally oppose increases to superannuation.
The Greens are likely to support changes to superannuation.
Ultimately, for this legislation to pass both houses of parliament, it is likely that we would need to see a Labor government, either with control of the Senate or with cross-bench members in the balance of power who are supportive.
This process would be difficult and we would be very reliant on the support of Fire, Ambulance and Police unions from across the country for support to get this over the line.
UFU Working Group
If you would like to be part of the UFU Super Working Group, contact stephen@ufutas.com
Firefighters in other jurisdictions have also seen changes to superannuation benefits as defined benefit schemes were rolled up. Similar jurisdictions like the NT are also on the SG rate, but SA Firefighters get 4% above the SG rate and ACT Firefighters get 2% above the SG rate, with an additional 1% if they contribute 3%.
Useful Information
67 – The Aged Pension eligibility age for those born after 1957. Superannuation can be accessed before this age.
34 – The percentage of Aged Pension recipients who are considered to live in poverty by international standards, with home ownership being a major factor as the need to pay rent greatly reduces disposable income.
60 – The age superannuation can usually be accessed. Superannuation can sometimes be accessed earlier if certain criteria are met regarding financial hardship.
83 – The average life expectancy in Australia is 82.9 years (2019)
38 – The average number of years of service before retiring (SA MFS Firefighter stats 2019)
63 – The average age of retirement is 62.6 (SA MFS Firefighter stats 2019)
20 – The number of years the average Firefighter will rely on superannuation for financial security after retirement. This is also correct as an average for exceptional Firefighters.
6 – The number of years that your super is expected to exceed your life expectancy if you retire at 67. (Australian Super Calculator)
0 – The number of years that your super is expected to exceed you life expectancy if you retire at 63. (Australian Super Calculator)
50 – The percentage of Firefighters starting in the 2021/22 financial year who are expected to run out of super during retirement if they retire at 63 and additional contributions are not made.
10 – The minimum superannuation payment percentage required by state and federal legislation. Note: federal legislation does not prevent higher amounts of superannuation being paid. In Tasmania, it is unclear if legislation allows for higher payments of superannuation and this should be changed so that the legislation clearly allows for higher superannuation to be negotiated in good faith.
Legislation and Useful Links
Public Sector Superannuation Reform Act 2016 (Tas)
