Hall urges action on super blowout

WESTERN Tiers MLC Greg Hall has called on the government to adjust the provisions of the state's $5.3 billion unfunded superannuation scheme in order to slow its growth 

``This is a debate which has to be had now,'' Mr Hall said yesterday.

``Head-in-the-sand tactics will lead to an enormous financial burden on future generations to fund the scheme unless changes are made.

``Given the state of the budget, its time our electioneering politicians let Tasmanians know what they intend to do to at least slow the rate  at which future unfunded super payments grow, and how they will reduce the compounding nature of the problem.''

The unfunded superannuation scheme for public servants was closed off to all new entrants in 1999 when the liability was just $1.2 billion.

 Latest figures revealed last week put the liability at about $5.3 billion and rising, even though it has been closed for 14 years. The growing liability is equivalent to a debt of $10,400 for every Tasmanian.

Successive governments had put money aside to contain the debt, but in recent years the government has been using these savings to prop up annual budget expenditure 

Two years ago the government officially closed down the savings account and said public servants in future would be paid out their super  as they retired.

The expensive nature of the now defunct unfunded scheme is that it is a defined benefits scheme. This means public servants are paid out what is promised to them from the outset.

Their superannuation is quarantined from any periodical shocks such as the recent global financial crisis. This is one of the reasons why the scheme has been so expensive.

Mr Hall alluded to this when he said public servants were staying on as long as they could to maximise their windfall.

Since 1999 all new public servants have been required to choose their own super' scheme, and only receive Commonwealth superannuation guarantee contributions from their employer like everybody else.

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