POWERED BY MOMENTUM MEDIA
Taskforce rallies government for DB exemption
The Municipal Association of Victoria (MAV) has established a taskforce of councillors and council officers to lobby government to return to a state-managed superannuation scheme, removing the requirement of local councils to fully fund any shortfall in Vision Super's defined benefit scheme.
Local councils have been alerted to their portion of the $453 million liability, with councils accounting for $396.9 million.
Councils were warned off the impending shortfall up to six months prior to 25 June, when the full amount was determined by the Actuary. A growing number of councils have joined the taskforce as the true level of the shortfall has become apparent.
Bass Coast Shire Council has been hit for $4 million and says it will be lobbying the Government for a change in legislation.
"We are working with the MAV to campaign for a change in legislation, which is the only way we can ensure we won't have to top up a shortfall in the future. Both federal and state governments are exempt from fully funding their liability and we believe Local Government should be granted the same status," Bass Coast Council chief executive Allan Bawden said.
The Shire of Campaspe said it's the fourth time the council has been called on to fulfil its Vision Super DB obligations, with this year's $4.8 liability well above previous years. The council said the repayments did not address the problem of future shortfalls.
Local councils signed a legal agreement pledging the repayment of member benefits after Vision's DB scheme closed in 1993. At that time, the scheme had 38,000 defined benefit members and 7,500 lifetime pensioners.
The MAV - which has two members on the Vision board - has worked with the Australian Prudential Regulation Authority to spread the repayments over 15 years rather than the prescribed five years, with repayments scheduled to start on 1 July 2013.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Australian retirees could increase their projected annual incomes between 3 and 51 per cent by incorporating personal and household data into their retirement income strategies, according to new research.
The best interests duty and new class of adviser didn't make the cut for the pre-election DBFO draft bill; however, ASFA has used its submission to outline what it wants to see from the final package.
The peak body stressed that the proposed financial advice reforms should “pass as soon as possible” and has thrown its weight behind super funds providing a greater level of advice.
Economists from the big four banks have all predicted the RBA to deliver another rate cut during its July meeting; however, some admit the decision will be a close call.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
88.01 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
