Council to consider super in salaries claim

By Rod Brown

November Council will consider a proposal that would make superannuation a significant element of the next salary claim.

If carried, Federation will campaign for an amount equivalent to two per cent of salary to be paid in the form of additional employer contributions to superannuation. In addition, up to a further two per cent employer contribution would be provided based on equivalent voluntary contribution by members.

For those members who receive the minimum level of superannuation this would increase the level of superannuation contributions from the current nine per cent to at least 11 per cent and with maximum voluntary contributions would result in superannuation contributions of 15 per cent. For those in the older schemes there would be an additional lump sum benefit at the point of retirement.

Council has previously recognised that there is a disparity in the remuneration of teachers arising from the different superannuation arrangements for teachers in NSW. This disparity is most stark for the overwhelming majority of Federation members who receive the minimum level of superannuation when compared with the diminishing number of members in the older schemes.

Federation argues that minimum level of superannuation available to most members represent an inadequate provision for retirement income. The burden of this shortfall will fall most heavily on women, casual and temporary teachers including teachers with broken service or undertaking part time work.

The union has not finalised its position on superannuation. Federation recognises that the proposal going before November Council represents a significant shift from earlier salaries campaigns where debate has been about the quantum of a salary.

Superannuation has not been a consideration other than for those members in the older schemes who recognise that a salary increase influences pension entitlements from the date a salary increase comes into effect. For those in the newer schemes salary increases will only provide a significant benefit after many years of superannuation accumulation.

Other aspects of the current debate include consideration of seeking improved insurance cover within superannuation in the event that teacher members are medically retired and have either partial or total, permanent disability.

Finally, Federation will consider negotiating changed arrangements for salary sacrifice/flexible salary packaging. The current arrangements involve a private company, MacMillan Shakespeare, which has a contract with the Department of Education and Training to provide flexible salary packaging to teachers based on a fee charged to teachers who elect to package salary arrangements in a tax effective manner. Many teachers use this facility to provide for additional superannuation contributions as well as other facilities available within such a service. The debate on this issue is whether this facility should be provided by the employer without cost to individual teachers. Many other employers provide flexible salary packaging for employees without cost.

The debate at November Council presents the possibility of a major shift by the union in its approach to salary campaigns. It is important that the membership is engaged in the process of such a debate.

Rod Brown is a Welfare Officer.

For further information

November 2004 contents