The basic benefit, AEC & SANCS

As a contributory member of PSS, you will also be entitled to receive a 3% non-contributory defined superannuation benefit (known as the basic benefit) for all service since 1 April 1988. In addition, eligible members are entitled to Additional Employer Contributions (AEC), Commonwealth Government co-contributions and Low Income Superannuation Contributions (LISC). The Basic Benefit, AEC, co-contributions and LISC are all payable from the State Authorities Non-contributory Superannuation Scheme (SANCS).

Basic benefit

The basic benefit is payable in addition to your PSS pension. It is fully paid for by your employer and accrues at up to 3%* of either your final average salary or your final salary for each year of service from 1 April 1988, or from your employment commencement date if later.

Your final salary is your actual salary at the date you cease employment, and is used to calculate your basic benefit in the event of death in service or invalidity retirement before you turn 55. In other circumstances, your final average salary will be used – that is, the average of your salaries at the date you cease employment and at 31 December in the two previous years.

Generally, a period of leave without pay (LWOP) of more than five days will not count as service for the accrual of your basic benefit.

Please refer to STC Fact Sheet 10: Basic benefit for more information.

*Due to tax payable by the fund on employer contributions since 1 July 1988, the basic benefit is effectively paid at around 2.55% per year of service.

Additional employer contribution

The Additional Employer Contribution (AEC) account is an accumulation style superannuation benefit which employers make contributions into each month for eligible employees. If you are an eligible employee, your employer will contribute the equivalent of 0.25% of your salary for the 2013–14 financial year and 0.5% of your salary for the 2014–15 and later financial years. This rate may change should the Superannuation Guarantee rate change. Only PSS members whose employment after 30 June 2013 was subject to NSW Public Sector Wages Policy are eligible to receive AECs.

Each monthly contribution is allocated to a member’s AEC account with contribution tax of 15% being deducted. The contributions accumulate in the AEC account and are adjusted for investment earnings each month, with the balance of the account  payable as a lump sum benefit at exit. If a benefit is deferred the AEC account is rolled into the basic benefit account and will, from that time, form part of the deferred basic benefit account.

For further information on the AEC refer to STC Fact Sheet 20: SANCS Additional Employer Contributions (AEC) account.