Update: 26 March 2007
Important update on the revision of exit rates for members who have taken their benefit in 2005-06
Our review and compliance processes identified issues with accounting information used to calculate the default Fund exit rates in the 2005-06 financial year. This resulted in an understatement of investment earnings and a miscalculation of exit rates used for members taking their benefit in that year, for example taking a lump sum or certain pensions.
As soon as the miscalculation was confirmed by an independent actuary, we declared new exit rates and adjusted them on the PSS and CSS websites with effect from 29 June 2006.
We have been directing a lot of effort over the last several months to identifying all of the members who require a recalculation of their lump-sum or pension entitlements using the correct interest rate. However, due to the large number of cases and the complexity involved with the calculations, many of which require individual processing due to the complexity of the schemes, the task of recalculating and processing the additional benefit payments is taking longer than we had expected.
This process has taken longer also due to the resource demands required in ComSuper to deliver the changes to the taxation on superannuation benefits that will come into effect from July 2007, as introduced by the Government in the 2006 Budget.
While we continue to apply as many resources as possible to this project at this stage we do not have a precise date for the completion of all cases. It will take a number of months more to finalise all the necessary payments.
Please note that all additional benefit payments will include interest up to the new date of payment.
Some members who preserved their benefit and/or transferred to the Cash Investment Option during the last financial year may also have been affected by the incorrect exit rates. Adjustments have now been made to those members’ accounts. This was reflected in the equity figures in those members’ 2006 member statements.
Any error with members' benefits is not acceptable and we appointed independent advisors to review our processes. Various changes have now been made to reduce the risk that such errors occur again.
We apologise for any inconvenience this may have caused.
Update: 15 January 2007
Our review of all benefit withdrawals undertaken in the 2005-06 year is now complete and all members affected have been identified.
All members who received a lump sum only payment in 2005-06 have been contacted and payments are being made once members confirm their account details.
Members who switched to the cash investment option during 2005-06 will have received a letter advising them of the change to their account with their 2005-06 Member Statement.
We will be also mailing letters to members who received a pension or pension/lump sum in 2005-06, asking that account details be confirmed. Payment of these cases will commence when members have confirmed their details.
Again, any error with members' benefits is unacceptable and we regret any inconvenience this may have caused.
Update: 12 October 2006
All exit rates that were identified as incorrect have now been updated.
Exit rates to be revised for members who have taken their benefit in 2005-06
Our review and compliance processes have identified issues with accounting information used to calculate the default Fund exit rates in the 2005-06 financial year. This resulted in an understatement of investment earnings and a miscalculation of exit rates used for members taking their benefit in that year, for example taking a lump sum or certain pensions.
As soon as the miscalculation was confirmed by an independent actuary today, we adjusted the exit rates on the PSS and CSS websites with effect from 29 June 2006.
We will now review every withdrawal undertaken in the 2005-06 year to identify those members who have been affected. Members who have been affected will be personally contacted to arrange a payment of the additional amount. We are aiming to contact all affected members over the next few months.
Some members who preserved their benefit and/or transferred to the Cash Investment Option during the last financial year may also be affected and we will make appropriate adjustments to their account.
Any error with members' benefits is not acceptable and we have appointed independent advisors to review our processes.
