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Wednesday, 9 March 1966

Mr McMAHON (Lowe) (Treasurer) . - by leave - I am sure that all honorable members will be interested to learn how the work associated with the distribution of the surplus in the Commonwealth Superannuation Fund has progressed during the parliamentary recess. As my predecessor indicated when the enabling legislation was before the House late last year, the magnitude and complexity of this task is quite without precedent. It involves a complete reconstruction of contributors' records, to take account of the reductions in rates of fortnightly contribution; a reassessment of the state of -the fund at 30th June 1962, having regard to those new contribution rates and the new assumptions about the Fund's earnings in the future; and payments to contributors, to pensioners and to former contributors to the Provident Account.

The first payment, which honorable members may recall was foreshadowed in the second reading speech on the Superannuation Bill 1965, was an interim payment out of the surplus amounting to approximately $2 million to some 16,000 pensioners and I am happy to report that the target of commencing those payments before Christmas was realised. In fact, all the cheques were despatched within days of the Bill's receiving royal assent and in time to reach pensioners about a week before Christmas.

The next step has been the recalculation of the accounts of all those who have contributed to the Provident Account, which forms part of the Superannuation Fund, since 1st July 1957, to give each contributor the benefit of the higher interest earnings actually achieved since that date. Benefits from the Provident Account are payable on termination of service and there are some 7,000 who have ceased to be contributors since 1st July 1957. They are being notified of the amount to which they are entitled and, because of the changes in address that take place over the years, they have been asked to confirm their current address on the claim form which is being sent to them. Notifications for contributors who ceased duty prior to 1st July 1965 have already been issued. The notifications for those who have retired since that date are being issued progressively over the next few weeks. Cheques for the amounts involved, ranging up to $1,040 and totalling some $806,000 will be posted on return of the completed claim forms to the Superannuation Board. Payment will be made to the widow or other survivor of those who have died. To enable prompt action to be taken as those who are now contributing to the Provident Account retire in the future, the additional amounts of interest since 1st July 1957 are also being credited at the same time to their accounts. In total, the sum involved is $1,034,000.

At the same time, but as a separate computer process, work has been proceeding on the adjustments that flow from the reductions in rates of contribution to the Superannuation Fund which have effect from 1st July 1962. This necessitates repricing the fortnightly contribution payable for each individual unit of pension taken up by the 120,000 current contributors during the period since the Fund was established - more than 40 years ago -and involves many millions of separate calculations. At the same time the new fortnightly contribution is being converted to decimal currency.

These new fortnightly rates of contribution for units held at 30th June 1965 will be introduced in the near future. The Superannuation Board has already circularised departments and statutory authorities to enable them to prepare for this task. Refunds of excess contributions will be calculated to 17th March and the new fortnightly rates of contribution will apply from 31st March 1966 onwards. The total to be refunded will amount to approximately $12,000,000 with individual payments averaging about $60. The arrangements for deductions from salaries at the new rates and for the individual refunds of excess contributions collected since 1st July 1962, will be made through normal departmental pay procedures.

The next step under the terms of the Superannuation Act 1965 is the recalculation of the surplus at 30th June 1962. The necessary statistical data for the actuarial calculations is being produced from the computer in association with these other calculations and the actuarial work of revaluing the fund and reassessing the surplus is expected to take about three months. The distribution to contributors of their share of the surplus assets at 30th

June 1962 and the final distribution of surplus to pensioners will then be made.

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