Review of Pension Indexation Arrangements in Australian Government Superannuation Schemes
On 21 August 2009 the Minister for Finance and Deregulation, the Hon Lindsay Tanner, announced that the Government fully supports the findings and recommendations of the review of Pension Indexation Arrangements in Australian Government Civilian and Military Superannuation Schemes.
The review was conducted by Mr Trevor Matthews, MA, FIA, FIAA, ASA. Mr Matthews’ report includes a comprehensive examination of the purpose of pension indexation in occupational superannuation schemes and considers whether the current Consumer Price Index (CPI) pension indexation methodology in the schemes should be changed.
Mr Matthews concluded that pensions from the Australian Government civilian and military superannuation schemes continue to be indexed against the effects of inflationary price increases. He recommended that those pensions should continue to be indexed by the CPI as the most suitable index to protect pensions against inflationary price increases available at this time.
Mr Matthews also recommended that, if a robust index which reflects the price inflation experience of superannuants better than the CPI becomes available in the future, the Australian Government should consider its use for indexing Australian Government civilian and military superannuation pensions.
More details may also be found on the Department of Finance and Deregulation's website.