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Monday, 3 November 2003
Page: 21847

Mr Martin Ferguson asked the Attorney-General, upon notice, on 11 August 2003:

(1) Has the Government commissioned a report by the Government Actuary on the value of judges' pensions; if so, what value does that report place on those pensions.

(2) In respect of the recent increases in pay for Federal judges of 17 and 4 per cent, what is the estimated additional cost of maintaining judges' pensions per financial year for each of these salary increases.

(3) Is it the case that for 1999 the Government Actuary estimated that the Government's notional contributions to judges pensions were worth 51.7 per cent of judges' salaries; if not, what is the actual figure.

(4) If the Government's notional contributions to judges' pensions are equivalent to 51.7 per cent of judges salaries, is the total remuneration of High Court Judges $463,185, not $305,330, and the total remuneration of judges of the Federal and Family Courts $392,781, not $258,920.

(5) Were the figures on the Government's notional contributions to judges' pensions put before the Remuneration Tribunal before it determined salary increases for judges of 17 and 4 per cent; if not, why not.

Mr Ruddock (Attorney-General) —The answer to the honourable member's question is as follows:

(1) An actuarial review of the long term costs of the judges' pension scheme was conducted by the Australian Government Actuary in June 2000. A further review was conducted by the Actuary in July 2003. The July 2003 report estimated that the unfunded liability in respect of judges' pensions as at 30 June 2002 was $319.9 million.

The most recent estimate of unfunded liability in respect of judges' pensions, as at 30 June 2003, is $339.1 million.

(2) In November 2002 the Remuneration Tribunal determined a judicial salary increase of 7% for 2002-03 and flagged a further increase of 5% for each of 2003-04 and 2004-05, in addition to any increases determined in the Tribunal's annual reviews for those years. The 9% increase determined for 2003-04 represents the 5% flagged for that year and the 4% awarded by determination 2003/12 following the 2003-04 annual review.

The estimate of unfunded liability as at 30 June 2003 has been calculated on the basis of both the 7% judicial salary increase determined for the 2002-03 financial year and relevant assumptions relating to such factors as investment returns, retirement rates, mortality and invalidity rates of judges. Estimates in future years will pick up other salary increases as they become payable.

As the estimate of unfunded liability as at 30 June 2003 has taken into account the 7% increase for 2002-03 and no separate estimate has been prepared excluding that increase or including the increase for 2003-04 or the flagged increase for 2004-05, a figure estimating the `additional cost of maintaining judges' pensions', to which the honourable member refers, is not available.

(3) Yes. The 2000 report by the Australian Government Actuary estimated that the Commonwealth's notional contributions to judges' pensions were 51.7% of judges' salaries as at 30 June 1999.

(4) The Australian Government Actuary calculated a notional contribution amount of 55.3% of salary in the July 2003 report. If a `total remuneration' amount is calculated by adding this amount to judicial salaries then the total remuneration for High Court Justices (other than the Chief Justice) would currently be some $474,000 pa and the total remuneration for Federal and Family Court Judges (other than the Chief Justices of those courts) would be some $402,000 pa.

(5) The Australian Government Actuary's 2000 estimate of a notional pension contribution rate of 51.7% was considered by the Remuneration Tribunal as part of its determination of salary increases for judicial officers in November 2002. The July 2003 report had not been completed when the Remuneration Tribunal made determination 2003/12 in June 2003, applicable to 2003-04.