Superannuation (State Public Sector) (Scheme Administration) Amendment Bill 2021
Plain English Summary
Overview
This bill enables the merger of QSuper and Sunsuper into Australia's second largest superannuation fund, with around $200 billion under administration. It retires the QSuper Board as trustee, moves the trust deed out of legislation to allow a new corporate trustee structure, and ensures the merged fund must remain headquartered in Queensland.
Who it affects
Queensland public servants, especially those with defined benefit superannuation entitlements, and Sunsuper members whose benefits will transfer into the merged fund. The bill also protects Queensland jobs by requiring the merged entity to be based in the state.
Key changes
- QSuper and Sunsuper merge to create Australia's second largest super fund (~$200 billion), with all Sunsuper member benefits transferring into the merged fund
- The merged fund must be based in Queensland - its CEO, majority of directors, and key staff must ordinarily reside in the state
- Defined benefit entitlements for public sector employees are protected in law - the trustee cannot change DB rules without actuarial confirmation of no impact or the Minister's consent
- Superannuation contribution rates for state public sector employees will be set by regulation, with existing rates continuing for up to one year during the transition
- The QSuper Board is converted from a statutory body to a proprietary company to handle any remaining liabilities from its time as trustee
Bill Story
The journey of this bill through Parliament, including debate and recorded votes.
▸Committee1 Sept 2021View Hansard
Referred to Economics and Governance Committee
The Economics and Governance Committee examined the bill over six weeks, receiving nine submissions and holding a public briefing with Queensland Treasury. All submitters supported the bill or specific provisions. The committee unanimously recommended the bill be passed, finding it compatible with fundamental legislative principles and human rights. The bill facilitates the merger of QSuper and Sunsuper into a $200 billion superannuation fund while preserving defined benefit entitlements and requiring the merged entity to remain headquartered in Queensland.
Key findings (5)
- All nine submitters, including unions, industry bodies and the funds themselves, supported the bill's passage
- The Queensland Police Union and Maurice Blackburn raised concerns about Sunsuper's TPD Assist insurance product, though this was outside the scope of the bill
- The committee found the bill's residence requirements for the merged entity's directors and CEO to be a reasonable limitation on freedom of movement, given the economic significance of keeping the fund in Queensland
- Defined benefit entitlements for public sector employees would continue to be protected in legislation, with the state's funding guarantee preserved
- The committee was satisfied that moving the trust deed from subordinate legislation to a non-statutory instrument was justified, given ongoing Commonwealth regulatory oversight of superannuation funds
Recommendations (1)
- The committee recommends the Superannuation (State Public Sector) (Scheme Administration) Amendment Bill 2021 be passed.
Committee report tabled
▸Second Reading26 Oct 2021View Hansard
▸24 members spoke23 support1 mixed
As Treasurer, introduced and championed the bill to facilitate the QSuper-Sunsuper merger, emphasising it would create Australia's second largest super fund, protect defined benefit entitlements, and anchor 2,000 jobs in Queensland.
“The proposed merger of these two funds will create the second largest superannuation fund in the country, will serve two million members, will manage $200 billion of members' funds and will anchor 2,000 jobs in Queensland.”— 2021-10-26View Hansard
As Deputy Leader of the Opposition, confirmed the LNP would support the bill, describing the merger as a landmark moment for Queensland's financial services industry that would deliver efficiencies and better outcomes for members.
“At the outset, let me confirm that the opposition will be supporting the bill today.”— 2021-10-26View Hansard
As chair of the Economics and Governance Committee, outlined the committee's inquiry process and the unanimous recommendation to pass the bill, emphasising Queensland's fully funded defined benefit scheme and the benefits of the merger.
“I commend the bill to the House and encourage all members to continue to support both the passage of this bill and also in their general public lives a strong superannuation scheme that puts in place savings for the future of every Queenslander and every Australian.”— 2021-10-26View Hansard
Supported the bill but raised concerns about board composition, the number of union representatives, and questioned the government's management of the defined benefit fund. Sought clarification on life insurance arrangements for members of both funds.
“The bill is well worth supporting to see this new arrangement put in place and I, along with my colleagues, will be supporting the passage of this bill.”— 2021-10-26View Hansard
As a committee member, outlined the legislative changes required to facilitate the merger, emphasising APRA's encouragement of fund consolidation and the benefits of economies of scale including lower fees and better member services.
“This is a merger that began in a memorandum of understanding back in 2020 which required close examination and due diligence due to the legislative requirements that any mergers of funds must be in their members' best financial interests.”— 2021-10-26View Hansard
Supported the bill, noting it would create a fund rivalling AustralianSuper in size and citing stakeholder support including from the Chamber of Commerce & Industry Queensland and LGIAsuper.
“In simple terms, the merger of QSuper and Sunsuper, two large Queensland based superannuation funds, makes sense because it will reduce fees for members.”— 2021-10-26View Hansard
Supported the bill as a committee member, highlighting Queensland's fully funded defined benefit scheme and the Palaszczuk government's conditions for supporting the merger, including member protection and the fund remaining based in Queensland.
“All of this means increased account balances for members, higher retirement incomes and a boost to economic activity in Queensland which is what Labor government does well.”— 2021-10-26View Hansard
Supported the bill but criticised the government for raiding the defined benefit fund and warned against board appointments being driven by union connections rather than skills. Urged caution to ensure insurance products meet member needs.
“We will not be opposing this bill, which seeks to merge QSuper and Sunsuper and will create the second largest superannuation fund in Australia.”— 2021-10-26View Hansard
Supported the bill, distinguishing between profit-for-members funds like QSuper and Sunsuper and retail funds, and highlighting the government's satisfaction that merger benefits would be passed on to members through lower fees and higher returns.
“The merged fund will continue to be the Queensland government's default fund. I, of course, declare that it is my superannuation fund, as it is for most members in here.”— 2021-10-26View Hansard
Supported the bill but warned against being dazzled by promises of economies of scale, cautioned the government against using superannuation funds as a piggybank, and recounted a history of Labor governments raiding superannuation-related funds.
“We will wait to see if the promised benefits are delivered. We will wait to see if the IT systems work out. We will wait to see whether or not the customer service is better.”— 2021-10-26View Hansard
Supported the bill, emphasising the fund's headquarters remaining in Brisbane and the economic benefits for Queensland, including anchoring 2,000 jobs and attracting further business investment.
“How good is superannuation? I think at the moment it has a quoted value of around $3.3 trillion. It makes a great contribution to our quality of life and the quality of our investments.”— 2021-10-26View Hansard
Supported the bill, highlighting the safeguards for defined benefit entitlements and the benefits for thousands of public sector workers in his local community including health professionals, teachers and first responders.
“The safeguards in this bill mean that the defined benefit entitlements of these public sector workers cannot be reduced and that a statutory framework for workers' contribution levels will be retained.”— 2021-10-26View Hansard
Supported the bill while drawing attention to the gender superannuation gap, noting women retire with 42 per cent less superannuation than men, and urged the new board to take strategic direction in addressing this disparity.
“The gender pay gap—of 14.5 per cent for full-time work, rising to 30 per cent when part-time work is included—has changed little over the past two decades.”— 2021-10-26View Hansard
Supported the bill, praising the union movement's role in establishing superannuation and expressing pride that Queensland would be home to the second biggest super fund in the country.
“This bill will create the second biggest super firm in our country. That is something that Queensland should be proud of.”— 2021-10-26View Hansard
Raised concerns about the rushed six-week inquiry and criticised Sunsuper's TPD Assist insurance product as inferior to industry standard, arguing the bill should ensure no worker is worse off from the merger. Did not explicitly oppose but highlighted significant shortcomings.
“Without this, as Maurice Blackburn sets out in its submission, we risk a fund which has the Queensland government as a trustee and provides outcomes for injured workers which are well below both industry standard and community expectations.”— 2021-10-26View Hansard
Supported the bill, emphasising the importance of the merged fund retaining profit-for-members status and the particular importance of superannuation security for women who retire with 47 per cent less super than men.
“Women currently retire with 47 per cent less superannuation than men.”— 2021-10-26View Hansard
As a former superannuation board member, supported the bill and detailed the Productivity Commission's evidence for economies of scale in fund mergers, noting the government's six conditions for approving the merger.
“The decision by QSuper and Sunsuper to merge is financially sound. It will give the merged fund increased capacity in its investment decisions.”— 2021-10-26View Hansard
Did not oppose the bill but stressed the importance of ensuring board members are experienced and well credentialed rather than Labor and union appointees, citing APRA and Productivity Commission guidance on board governance.
“I do not oppose the bill.”— 2021-10-26View Hansard
As a former chair of Sunsuper and QSuper board member, strongly supported the bill, recounting the history of the proposed merger dating back to a McKinsey report in the late 1990s and praising the economies of scale and fee reductions it would deliver.
“Not only is it the second largest superannuation fund in Australia; it is the second largest fully funded superannuation fund in Australia. This is absolutely outstanding.”— 2021-10-26View Hansard
Supported the bill enthusiastically, noting the due diligence process had been debated for nearly two years and listing the executive team and board members of the new merged fund.
“It is with the pride of a true Queenslander that I support this historic merger of two Queensland based superannuation funds.”— 2021-10-26View Hansard
Supported the bill but expressed concern about the overrepresentation of union nominees on the new board (6 of 13), the loss of parliamentary oversight over board appointments, and argued for representation from non-Labor-aligned employee associations.
“It concerns me greatly that we have gone from a situation where we have equal representation of employer and employee organisations to a situation now where we have an over-representation of unions.”— 2021-10-26View Hansard
Supported the bill as a QSuper defined benefit fund holder and Queensland Teachers' Union member, highlighting the history of compulsory superannuation and the merger's alignment with broader industry consolidation trends encouraged by APRA.
“Today around 15.6 million Australians currently have a super account and as a result of recent federal government legislative reform, from 1 July 2021 to 1 July 2025 the superannuation guarantee will increase from 9½ per cent to 12 per cent.”— 2021-10-26View Hansard
Supported the bill, praising the Treasurer's insistence that the fund remain headquartered in Queensland and criticising the federal LNP's record of undermining superannuation including delayed contribution increases and early access during COVID.
“This merger also benefits Queensland by strengthening our Queensland financial sector which, of course, has been traditionally dominated by southern capitals.”— 2021-10-26View Hansard
Supported the bill, criticising the federal government's handling of superannuation during COVID including the $42 billion in early withdrawals predominantly affecting low-paid and female workers, and praising Queensland's wage theft laws.
“What kept the Australian economy going was workers dipping into their superannuation funds to the tune of $42 billion.”— 2021-10-26View Hansard
▸In Detail26 Oct 2021View Hansard
Amendment to clause 2 (Commencement) to insert reference to new part 2A, and insertion of new part 2A amending the Governors (Salary and Pensions) Act 2003 to allow future governors to elect either the same superannuation arrangements as a public sector employee or a governor's pension.
Consequential amendments to Schedule 1 relating to the Governors (Salary and Pensions) Act definitions for State public sector employee and membership declarations.
Assent date: 18 June 2024