Super salary

Super salary

Your super salary (derived from your actual salary) is important because:

Generally speaking, the higher your super salary, the higher your FAS will be, and the higher your final PSS defined benefit is likely to be.

This is subject to the 10-year rule and your Maximum Benefit Limit.

More information

Can my super salary ever reduce?

No, your super salary cannot reduce from a previously set amount*. If your actual salary reduces, your super salary will not reduce, helping to maintain your retirement benefits at generally the level you would had received had your salary not fallen.

For example, if your salary is $80,000 per annum and you receive a higher duties allowance of $5,000 for one year, your new salary and super salary will be set at $85,000. After one year, your actual salary reverts to $80,000, but your super salary will remain $85,000.

Your super contributions will continue to be paid on your former (higher) salary. Keep in mind you can change your personal contribution rate at any time.

Your super salary will also continue to increase when it is higher than your actual salary. It will be indexed by movements in the Average Weekly Ordinary Time Earnings (AWOTE). 

*Note: Your salary can reduce if you have a break in service that results in a new period of membership. It can also reduce if your salary is reported incorrectly by your employer.

How is my super salary worked out?

Your super salary is likely to be set out in a certified agreement or Australian Workplace Agreement. Otherwise, it is your basic salary plus any recognised allowances.

Recognised allowances cover events including higher or extra duties, responsibility for staff, equipment or premises, and performance of special tasks. Allowances not recognsied include those for overtime, accommodation, travel and bonus or performance pay.

If in doubt, please speak to your personnel section.

To view your super salary, login to Member Services Online or check your Member Statement.

How is my Final Average Salary (FAS) worked out?

Your FAS, which is used to calculate your defined benefit, will be your average super salary on your last three birthdays before you end your PSS contributory membership.

For example, Sarah retires after her 55th birthday. The last three birthday salaries reported were $80,000, $90,000 and $100,000. Her FAS will be calculated as: ($80,000 + $90,000 + $100,000) divided by 3 = FAS of $90,000.

In certain circumstances the FAS calculation may be different, for instance:

If you work part time, your equivalent full-time salary is used to calculate your FAS.

If you are involuntarily retired (retrenched or made redundant), the calculation of your FAS differs to the above calculation (average on last three birthdays). Your final salary will be incorporated on a pro-rata basis depending on how many days have passed since your last birthday.

For example, John is retrenched 100 days after his birthday on a salary of $100,000. His three previous birthday salaries were $80,000, $85,000 and $95,000. His FAS calculation will be: ($80,000 x 265/365) + $85,000 + $95,000 + (100/365 x $100,000) divided by 3 = $88,493.15.

Only your salary while working for a PSS participating employer is counted. Salaries outside the Australian Public Service and other participating employers have no bearing.

Please contact us to discuss the calculation of your FAS.

How does an increase in my actual salary affect my super salary and final benefit?

How does an increase in my actual salary affect my super salary and final benefit?

Any salary increase will generally have a positive impact on your defined benefit. Your FAS will be higher, so your final benefit is also likely to be higher. If you do get a pay rise, your new super salary will not take effect until your next birthday. Your member contribution amount will also be reset at that time to the highest super salary you had received in the past 12 months.

Remember, you can change your contribution rate at any time.

How does a fall in my actual salary affect my super salary and final benefit?

Your super salary cannot reduce from a previously set amount. In other words, it can never reduce; it can only increase. This helps to maintain your retirement benefits at the level you would have received had your salary not fallen. Therefore, your benefit will be adversely affected only if you contribute less, for instance if you can’t afford the higher contribution rate.

You may receive a partial invalidity pension if you suffer a permanent reduction in your salary due to a medical condition. Your former salary and work hours will then be maintained for the calculation of your final defined benefit.

How does going part-time affect my super salary and final benefit?

Reducing your work hours will not affect your super salary because it cannot reduce from a previously set amount (your super salary can never be lower).

However, part-time work is likely to affect your benefit. Your Benefit Multiple will be calculated on a pro-rata basis by dividing your part-time hours by your full-time hours.

Your Accrued Benefit Multiple (eg from past full-time work) will generally not change.

Your contribution rate will only change if:

  • you are a part-time member on your next birthday, or
  • you elect to increase or decrease your rate.

Reducing work hours also reduces your potential invalidity and death benefits.

However, in the case of a partial invalidity pension, your fortnightly contributions will be paid at your now reduced rate. But you continue to accrue benefits at your previous rate. Your income will be supplemented by a pension because you no longer work full-time for medical reasons.