Public Sector Superannuation Accumulation Plan (PSSAP)
The Public Sector Superannuation Accumulation Plan (PSSAP) is the superannuation fund available to public sector workers in Australia, and was established on 1st July 2005.
The majority of government employees can choose into which superannuation plan they pay their contributions; the Public Sector Superannuation Accumulation Plan is one of the options available, and is also the default fund for those who do not specifically choose a plan.
How does PSSAP work?
The Public Sector Superannuation Accumulation fund offers four options to its members, which depend largely upon the amount of risk that the employee wishes to take with their investments. Employees can invest in one of the plans, or choose to split their portfolios, with a combination of higher and lower risk products.
This is a very low risk plan, returning on average 4.08%; the plan is wholly based upon cash investment and the portfolio includes no risky investments.
This is a low to medium risk plan, with only 14% invested in equities; the returns are lower than the higher risk plans at 5.21%, but so too are the risks of negative returns.
This is the default plan in operation, and operates at a medium to high risk level with 53% of the portfolio invested in equities; since 1st July 2005, the average net return per annum has been 6.15%
This is a high risk plan with 71% of its portfolio based on equities; the return targets are higher, and since inception in 2005 the average return has been 6.46%.
Benefits of PSSAP
Like the majority of employees, a choice can be made with regard to which superannuation fund is chosen; there are significant benefits however to PSSAP which make it extremely competitive, and attractive to employees. The benefits include:
Contributions these are 15% of salary, much higher than the mandatory rate of 9.5%
Profits profits made are re-invested in this accumulating fund
Costs these are met by the Government employers, reducing the amount payable by the employee towards administration
Education the public sector actively promotes PSSAP by providing workshops and seminars, designed to educate and inform regarding superannuation plans
Which option should I choose?
It is important to remember that everybody has different personal circumstances; the decisions you will make as a young man or woman will differ to those that you will make when you are within ten years of looking to retire, and in order to obtain the best option, it is always advisable to obtain independent financial advice.
The Public Sector Superannuation Accumulation Plan provides superannuation services to employees of the Australian Government. It is a highly rated ‘profit for members’ plan, which has earned highest ratings for a Superannuation Fund within the industry. The plan offers an online account, as well as a range of income protection policies, along with easy access to financial advice and transition to retirement strategies.
The plan offers employees a range of risk-based options, enabling them to spread the risk of their investments in a way that best suits their personal circumstances.