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Additional contributions

When it comes to your retirement, it’s the little things that make a big difference – from what you save, to what you contribute. Learn about how you can contribute more to your super here.

You don’t have to contribute extra to super, however doing so may be a good idea as your retirement savings may need to last you 20 years or longer. Even small regular amounts can grow to have a bigger impact on your retirement over a long investment period.

As a PSS contributor, you are able to contribute to increase your PSS benefit, or choose to make additional contributions into a PSSap Ancillary account.

Growing your PSS benefit

PSS Retirement Benefit

The longer you contribute to PSS and the higher your contribution rate, the greater your final PSS retirement benefit is likely to be. That's because PSS provides you with a defined benefit determined by a set formula. It's calculated using the following three factors:

1.   your rate of personal fortnightly contributions

2.   your Final Average Salary (FAS); and

3.   your length of PSS contributory membership.

You can't contribute to PSS if you do not work for a PSS participating employer. 

To again be eligible to contribute to your PSS account, you must have a PSS preserved benefit entitlement at the time you rejoin the Australian Public Service or another PSS participating employer.

Personal fortnightly contributions 

You can choose to contribute between 2% and 10% of your super salary, or at a 0% rate. Your contribution rate is based on your gross fortnightly super salary and is deducted from your after-tax pay.


Your Benefit Multiple (part of a set formula to determine your PSS benefit) accrues according to your rate of contribution. It grows each fortnight with each contribution you make.

Member contributions are classed as non-concessional contributions for tax purposes.

Contributions and benefit growth

The below table shows how much your Benefit Multiple will increase each year dependent on your fortnightly contribution rate. This table is for full-time members only. Part-time members will receive a pro-rata multiple accrual based on their part-time hours.

Contribution rate

(% of salary)

Accrued Benefit Multiple p.a

(if you have satisfied the 10-year rule)

Accrued Benefit Multiple p.a

(if you have not satisfied the 10-year rule)

0%

0.11

0.11

2%

0.15

0.15

3%

0.17

0.17

4%

0.19

0.19

5%

0.21

0.21

6%

0.23

0.22

7%

0.25

0.23

8%

0.27

0.24

9%

0.29

0.25

10%

0.31

0.26

What is the maximum Benefit Multiple I can accumulate?

There is a limit to the Benefit Multiple that you can accumulate which is determined by the Maximum Benefit Limit (MBL). The MBL that applies to you depends on your Final Average Salary.

Average Salary

MBL – From 1 July 2018

Less than $73,500

$735,000

$73,500 and over

10 times average salary


For example:

Steve’s final average salary is $62,339. This means his maximum benefit in PSS is $735,000 or, a Benefit Multiple of 11.79 times his salary (i.e. $735,000 divided by his average salary of $62,339).

Anne’s final average salary is $85,000. This means her maximum benefit in PSS is $850,000 (i.e. a Benefit Multiple of 10 times her average salary of $85,000).

Where can I get additional information?

You can access the iEstimator through our Member Services Online to assist you in understanding the impact that making additional contributions can have on your final PSS benefit.

Contributions into super generally must remain within super until you retire and reach preservation age, so you need to weigh up the costs and benefits of additional contributions, taking into account your objectives, financial situation and needs, before making any financial decisions regarding your super.

PSSap Ancillary

Personal After Tax Contributions

Additional personal and spouse contributions can be made via BPAY, cheque and money order. Please note that contribution caps apply – if you exceed the cap, you may have to pay extra tax. Please refer to the Australian Tax Office website for more information on contribution caps.

CLAIMING TAX DEDUCTIONS

You may be able to claim a tax deduction for personal (after-tax) contributions made into your PSSap Ancillary account. Any amounts claimed as a tax deduction will have 15% tax deducted and be counted towards your concessional (before-tax) contribution cap. For further information about personal after tax contributions refer to the Australian Tax Office website.

Salary Sacrifice

Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account.

WHAT ARE THE BENEFITS OF SALARY SACRIFICING?

Salary sacrifice payments are before tax contributions which are taxed at 15% on entry to your account. This means that you could pay less tax on salary sacrifice contributions than you would pay if you took that same amount as ordinary income. 

DOES IT MEAN I GET PAID LESS EACH FORTNIGHT?

If you salary sacrifice super contributions you will have less take home pay each fortnight. However, this may be a tax effective way to save for your retirement if your personal tax rate is greater than 15% as the amount going into your super may be more than the amount your take home pay is reduced by.

The amount you decide to contribute is entirely up to you, so you can make sure it’s affordable and within your budget.

THINGS YOU NEED TO KNOW
  • The higher your income tax rate, the more benefit you get. The benefits for those earning less than $37,000 per year are limited.
  • There is a cap on before-tax super contributions. See more information on contribution caps via the Australian Tax Office website.
  • Your employer may also have a cap on the amount you are allowed to salary sacrifice. Be sure not to exceed this amount.
  • You should talk to your employer to make sure that you understand whether salary sacrificing amounts into super will impact on any other element of your remuneration.
  • Contributions into super generally must remain within super until you retire and reach preservation age, so you need to weigh up the costs and benefits of salary sacrifice, taking into account your objectives, financial situation and needs, before making any financial decisions regarding your super.

HOW DO I SET IT UP?

1.   Check whether your employer allows you to salary sacrifice into super. Most employers allow salary sacrificing but it’s best to confirm with your personnel/HR section.

2.   Complete the Apply to join PSSap as an Ancillary Member form.

3.   Instruct your employer to deduct your nominated salary sacrifice amount from your regular pay. Once it’s set up, the nominated amount will automatically be deducted from your salary and deposited into your PSSap Ancillary account until you ask them to stop. 


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