How does LWOP impact my SASS account?
LWOP falls into two categories prescribed leave and non-prescribed leave.
Prescribed leave and SASS
Prescribed leave includes periods of approved sick leave or maternity leave without pay, periods when an employee is receiving periodic workers compensation payments or on secondment with another employer. Your obligations to SASS and those of your employer continue as if you were not on LWOP.
While on leave you still need to continue contributions at the rate you have nominated, which is between 1-9% of your superable salary. As your employer can’t deduct these from your normal pay, you will need to pay these directly to your employer who will forward them to schemes administrator, Mercer.
The advantage of continuing your contributions is that they will be directly adding to and growing your personal account and contributed points. This is particularly important if you have not yet reached 180 accrued benefit points and maximised the points your employer is making available for you toward the employer financed component of your benefit.
If continuing your personal contributions to SASS is causing you financial hardship while you are on leave, then you can request that they be reduced to as low as 0% by writing a letter to the scheme administrator. Just be mindful that this will also impact your employer financed benefit because you will not accrue benefit points for this period.
Your employers’ obligations also continue while you are on prescribed LWOP. They continue to make benefit points available for you to accrue at 6 benefit points per year of full-time service up to a maximum of 180 points, and your basic benefit and Additional Employer Contribution (AEC) if eligible will also continue to accrue.
Importantly only the first 2 years of continues LWOP for maternity leave or sick leave is treated as prescribed leave. Periods in excess of 2 years are treated as non-prescribed (see below).
Non-prescribed leave and SASS
Leave that doesn’t fall under the definition of prescribed leave is considered non-prescribed and is LWOP that you might take for a holiday as an example.
The impact to your contributions and your employer obligations will depend on the duration and the timing of the non-prescribed LWOP.
If the period of leave commences or finishes part way through a calendar month then your membership continues as if you were continuing working for that month. Contributions are payable, and if you have not yet reached the maximum 180 points your benefit points continue to accrue and your employer will continue to make available points for you.
If the period of leave is for the entirety of a calendar month, then contributions cease for that month, and benefit points don’t accrue.
As an example a member who commences leave on the 15th of September and returns to work on the 10th of December, they will be required to continue contributions as normal for September and December, but will not pay contributions for October and November.
Whatever the duration or timing of the non-prescribed LWOP, the basic benefit and AEC will stop accruing after the 5th business day.
Tip:
If you have not yet reached maximum 180 points, it’s important to keep in mind that your benefit points (employer or employee) will not accrue for whole months where contributions are not payable. This means it will take you longer than 30 years of full-time service to accrue 180 points.
Is there a difference to my SASS account if I have a regular leave without pay arrangement of 1 days a week compared to working part time?
The impact on your SASS benefit and account will be the same whether you reduce your working week by 1 day through a regular leave without pay arrangement with your employer or by switching to part-time work. In either case, your employer must notify State Super of the change in your working hours, which will prompt a salary ratio to be applied to your account for that period of service.
The salary ratio is used to determine:
- Your contributions to SASS.
- The rate at which you accrue points.
- The points your employer will make available for you to accrue.
- Accrual of the basic benefit and additional employer contribution (AEC), if applicable.
Instead of the 6 points allocated by your employer each year (up to a maximum of 180), the annual points will be adjusted by the salary ratio during the period it applied.
For example, if you work one day less each week:
- Your salary ratio will be: 0.8.
- Your maximum employer points per annum: 4.8 (6 multiplied by 0.8).
If you have not yet reached 180 accrued benefit points, and you have periods of service where a salary ratio of less than 1 is applied, it will take you longer than 30 years of service to reach the 180 maximum accrued points milestone.
If you are already at 180 accrued benefit points, the salary ratio will not impact your points but will still affect the rate of accrual of your Basic Benefit and Additional Employer Contribution if applicable.
The full-time superable salary will continue to be used in the calculation of your benefit when you cease to be a contributing member whether that be on resignation, retirement, medical retirement, redundancy, or death.
