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MAV plans phase two of defined benefit shortfall plan
The Municipal Association of Victoria is gathering additional councillors and council officers for the second-phase action of its Defined Benefit Superannuation Taskforce.
The taskforce was launched last year to assess strategies that could reduce the risk of a future call on councils and employers.
In a report late last year it identified a suite of recommendations to reduce the risk of a future call including a salary rate movement cap for Vision Super's defined benefit members and a plan to direct implementation of those recommendations in the second phase of the taskforce.
New task force members will also drive advocacy efforts to exempt the councils from funding any future shortfall, waiving or rebating contributions tax and maintaining communication with Vision Super.
In January, MAV said Vision Super's defined benefit (DB) scheme should be removed from the Superannuation Industry (Supervision) (SIS) Act or be exempt from some SIS requirements if it would reduce the burden of future calls on employers.
Councils have been called on to fund the DB shortfall on four occasions — but last year's shortfall of $453 million with $396.9 million payable by councils and due on 1 July 2013 set a record and prompted many councils to lobby the Government to amend legislation.
The taskforce was formed in July last year to lobby the Government to remove the burden on local councils to fully fund shortfalls arising from Vision's DB scheme by returning to a state-managed scheme.
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