This section includes information about the effect on your unit entitlement (benefits) during periods of leave without pay (LWOP), part-time employment and long-service leave. You may also enter into a purchased leave arrangement with your employer which will directly affect your superable salary, contributions and benefit entitlements. If you are considering this option, we recommend you obtain financial advice.
LWOP is a period of leave during which you are not entitled to receive salary payments from your employer. For superannuation purposes, LWOP is categorised as either approved leave or ordinary leave. Your contributions to SSS remain payable during all periods of LWOP or secondment. Deferment of contributions while on LWOP is only permitted in special circumstances.
During periods of approved LWOP, the employer generally pays the employer contribution liability to the scheme. It is important to be aware that, to comply with scheme legislation, your benefits will be reduced proportionately for any period of maternity or sick leave that exceeds two years.
In regard to ordinary LWOP, an employer may grant LWOP subject to you reimbursing your employer for the cost of their contribution liability to SSS for the period of leave. This is an arrangement made between you and your employer. Your employer may not require you to meet its liability to SSS during certain periods of LWOP in excess of three months where you accept a permanent reduction in unit (benefit) entitlement. The amount of the reduction is based on the decreased service as a result of the period of leave.
Alternatively, if you elect to retain full unit entitlement you may be required by your employer to meet its liability to SSS during the period of leave. It is important that you check these conditions with your employer before beginning LWOP. Where a period of LWOP exceeds three months, an election should be completed by both you and your employer and then forwarded to the scheme administrator before the leave begins. The election form is called SSS Form 536: LWOP (part-time or full-time) member's election and is available from the STC website or from Customer Service. If an election is not received prior to the leave commencing, a permanent reduction is applied to your account.
For more information, please refer to SSS Fact Sheet 3: Contributions.
If you work part-time, your unit entitlement and contributions are adjusted on a pro rata basis. Your adjusted unit entitlement is determined with reference to the equivalent full-time salary for the position after applying a deduction factor.
It is important to realise that a reduction in unit entitlement for periods of part-time employment is permanent and will reduce the amount of the benefit you would otherwise have received if you had worked full-time throughout your membership.
If you change the hours that you work (such as from full-time to part-time), then a salary ratio factor is applied to your SANCS basic benefit service accrual rate.
For example: if a member employed full-time changes their working hours to half the normal hours of their position (and earns half the full-time salary), a salary ratio of 0.5 is applied to reduce the basic benefit service entitlement to six months (that is, 1 year of service x 0.5 salary ratio).
The value of any applicable Additional Employer Contribution (AEC) is also calculated based on the salary ratio.
The full-time equivalent salary is used to calculate the final average salary so as not to disadvantage the member for service days accrued at the full-time rate.
For more information, please refer to SSS Fact Sheet 4: Part-time employment and part-time leave without pay.
As long-service leave (LSL) is paid leave, so benefits are not affected and contributions remain payable.
Long service leave can be taken at double pay, single pay or half pay. Whichever way it is taken it is treated for superannuation purposes as if it had been taken at the single pay rate. Therefore, if you take long service leave at half pay, contributions remain payable at the full-time rate for the whole leave period.
An instance where LSL may affect entitlements is if you are a shift worker and your salary for superannuation purposes includes a loading which is determined by the number of shifts you worked in the 12 months prior to the salary reporting date. Whether a loading is applied to your base salary for superannuation purposes, of 0%, 10%, 15% or 20%, depends on the number of shifts you have worked in the 12 month period for which you have received a shift penalty.
If you take LSL in this period, you will not be working shift work and therefore will not be receiving shift penalties. This will potentially reduce or eliminate the loading applied to your salary for superannuation purposes. A reduction in the salaries reported at the previous two annual review days and/or at exit from the scheme will result in a lower benefit being paid. If you are entitled to any Additional Employer Contributions these will also be made based on your reduced salary.
For further information, see SSS Fact Sheet 1: Salary for superannuation purposes.
Purchased leave is a voluntary arrangement between you and your employer where you may 'purchase' additional leave by reducing your annual salary. The conditions under which such agreements can be made are generally set out in your Award or employment contract.
The benefits from SSS are based on your salary at or near to your exit from the scheme. If you purchase additional leave, your salary, including your salary for superannuation purposes, will be reduced to 96.15% if you purchase an additional 10 days leave and 92.3% of your salary if you purchase an additional 20 days leave. Your salary is reported annually to the scheme and is used to calculate the cost of your contributions for the following year. It is also used to calculate the value of your benefit at retirement, retrenchment, invalidity or death and the value of your preserved benefit if you resign.
Where a purchased leave agreement is in place, on your annual review day or when you exit the scheme, your employer will report your purchased leave salary for that year (that is, they will report the reduced salary as your superable salary). Your contributions and benefits will be based on the reduced salary which will result in a lower benefit being paid.
If you are entitled to any Additional Employer Contributions during a year when a purchased leave arrangement is in place these contributions will be made based on your reduced salary.
We recommend you seek financial advice before taking a period of purchased leave. An Aware Super financial planner can assist you in assessing the impact of purchased leave on your pension entitlement.
Your first appointment is free of cost or obligation and will give you a chance to consider creating a plan for you that is specific to your needs, goals and situation. There will be a fee for this personal financial plan, and the fee will be discussed with you before any work is commenced.
To find out more, call Aware Super on 1800 620 305 or visit retire.aware.com.au/statesuper
For more information, please refer to SSS Fact Sheet 1: Salary for superannuation purposes and SSS Fact Sheet 5: Purchased leave.
Note: Aware Financial Services Australia Limited (Aware Financial Services) (ABN 86 003 742 756) holds an Australian Financial Services Licence (AFSL number 238430) and is able to provide you with financial product advice. Aware Financial Services is owned by Aware Super Pty Ltd as trustee of Aware Super. State Super does not pay fees to, nor receives any commissions from Aware Financial Services for financial planning and member seminar services provided to State Super members. Neither State Super nor the New South Wales Government take any responsibility for the services offered by Aware Financial Services and its related entities, nor do they guarantee the performance of any service or product provided by Aware Financial Services and its related entities.