New Scheme
April 19 2024
No one knows your New Scheme better than we do.
The New Scheme is exclusively for employees, including temporary employees, who joined the Victorian Public Service, Teaching Service, and participating agencies between 1 July 1988 and 31 December 1993. This Scheme also includes members who have transferred from other funds.
The New Scheme generally provides lump sum superannuation benefits on retirement, resignation, retrenchment, ill health, death, and disability pension.
The end benefit for defined benefit funds is calculated differently from the accumulation-style super that some of your peers may have. As a New Scheme member, your benefit depends on a number of elements such as: your salary, age, period of service, contribution rates and full or part-time employment status.
Your benefits are generally not impacted by investment performance.
Benefits and risks
There are a range of benefits of New Scheme membership, including:
- Your benefit is not impacted by investment performance
- You can make beneficiary nominations
- Benefits are payable on retirement, resignation, dismissal, retrenchment, death, and disability (provided you meet a release requirement)
There is the risk that your nominated contribution rate and/or period of service may not result in a high enough benefit to sustain you in retirement. However, there are ways to increase your final benefit.
How your New Scheme works
Throughout your working life, your employer will make contributions to your New Scheme on your behalf.
You may also choose to contribute to the fund, at rates of either 0%, 3%, 5% or, in certain limited cases, 7% of your after-tax salary.
If you choose to contribute from your pre-tax salary (known as salary sacrificing), the rates will be higher, to account for the 15% contributions tax. Find out more about contributions in the New Scheme Handbook on our PDS and handbooks page.
Your end benefit is calculated using a formula which takes into account a number of elements, including your:
- Salary
- Age
- Period of service
- Contribution rates, and
- Full- or part-time employment status.
Grow your super: for information on ways to increase your end benefit
Benefit options
Once you are eligible, you have a number of options, resulting in a lump sum payment. In limited circumstances, a pension may be payable.
You can transfer* your lump sum benefit into our award-winning Income Stream. This option provides a regular and flexible income in retirement.
Find out all about our Retirement Income Streams here
Disability benefits
New Scheme members who are under age 60 always have disability cover. After applying for a benefit, ESSSuper will determine whether you're eligible for:
- A temporary pension (with payments that don't reduce your retirement benefit)
- A permanent disability pension
- Commuting a permanent disability pension into a full or partial lump sum benefit, or
- An ill-health retirement lump sum benefit.
About temporary pensions
If you're eligible, a temporary pension may be payable:
- If it appears you're likely to substantially recover from your injury, disease, or infirmity
- For a maximum period of up to two years (as long as you don't finish employment and medical evidence supports continuation of the benefit).
ESSSuper will make a decision on a disability claim after you've attended at least two independent medical examinations with Board-approved doctors.
To learn more or complete an application form, please refer to our Claiming a disability benefit (defined benefit) fact sheet, available in the 'Looking after your loved ones' section of our Publications web page.
Partnering your New Scheme with an Accumulation Plan
You can open an Accumulation Plan today, even if you are still working.
There are some potential benefits to doing this, such as topping up your insurance**, consolidating your super*, increasing your end benefit, or accessing a Working Income Stream.
We recommend checking out the Accumulation Plan page or contacting us for further information about partnering your defined benefit with an Accumulation Plan.
Thinking about resignation?
If you decide to resign before age 55 you are entitled to:
- A refund of your contributions (and earnings), and
- A deferred benefit which is not payable until you reach your retirement age (and subject to preservation rules).
Some of your benefit may be payable to you, however, generally your benefit is subject to the preservation rules and you are unable to access it until you reach your preservation age which is between 55 and 60 depending on when you were born.
There are two options available for the preserved and deferred portions of your resignation benefit:
- Roll over the preserved portion of your contributions and interest to a complying super fund, and keep your deferred benefit in the New Scheme, or
- Convert your deferred benefit to a 'present day value' and combine this with the preserved portion of your contributions and interest and transfer this amount to a complying super fund. Please note if you convert your deferred benefit to a 'present day value' it will be a lower value than the deferred benefit that will be held in the New Scheme until you reach your retirement age.
Your entitlements and options are dependent on your circumstances, and the complexities can be confusing. It's important that you receive accurate information - remember, no one knows your New Scheme better than ESSSuper.
We can help you understand your options in detail, and if you need, we can refer you to our Financial Advisers†, who can advise you on which option is best for your personal situation.
We also run regular education events (in person or online) which can help you to understand your options in more detail.
Be in the know: Find out more about our advice† and education services today
Working part-time in the transition to retirement
As you approach retirement, it can be helpful to make changes at work to ease the transition.
One way to do this is by reducing your hours or changing to a more flexible role. To make the transition gradual, you can consider:
- Talking to your employer about your options, e.g. purchasing extra leave
- Discussing your needs with your family, and
- Meeting with a Financial Advisor† to make a plan.
If your super is in one of our State Super funds, reducing your hours is unlikely to have an impact on the Final Average Salary used to calculate your retirement benefit, although it will impact your benefits by reducing the rate at which your super accumulates. You can find out more in the relevant handbook available on our PDS and handbooks web page.
Planning for your future can be a daunting task, but you're not alone. Contact us for expert information and financial advice about your super from one of our Financial Advisers.† You may also benefit from meeting with a Member Education Consultant for general advice about your ESSSuper account.
On the other hand, if you want to increase your take-home pay before retiring, you could:
- Work extra hours at your current job
- Look for additional work outside of your current job (which may be subject to approval by your current employer), or
- Ask for a pay rise.
However, before taking any action to increase your take-home pay, it's important to consider:
- Talking to your employer about overtime options
- Checking your conditions of employment
- How much tax you will need to pay on any extra income
- The impact on your work/life balance.
Accessing your superannuation while working
If you'd like to reduce your work hours without decreasing your income, accessing your super while working could be an option. You may be able to access a transition to retirement pension such as our Working Income Stream to do this.
To access a Working Income Stream you need to:
- Have some or all of your super in an accumulation account (not a defined benefit), and
- Have reached your superannuation preservation age.
It's crucial to be aware that drawing on your superannuation while still working will mean having less money when you retire.
You can learn more about transitioning to retirement on the Government's Moneysmart website.
Thinking about retirement?
If you decide to retire after age 55 you are entitled to an Age Retirement Benefit. This is a lump sum benefit based on your:
- Final average salary
- Personal contribution rate, and
- Length of recognised service with your employer.
Generally, all of your benefit will be available to you on genuine retirement. However, some of your benefit may be subject to the preservation rules.
Your entitlements and options are dependent on your circumstances, and the complexities can be confusing. It's important that you receive accurate information - remember, no one knows your New Scheme better than ESSSuper.
We can help you understand your options in detail, and if you need, we can refer you to our Financial Advisers†, who can advise you on which option is best for your personal situation.
We also run regular education events (in person or online) which can help you to understand your options in more detail.
Be in the know: Find out more about our advice† and education services today
Exempt officers
Exempt officers are members who cease active membership of the New Scheme without having to terminate their employment with their current employer. They may be entitled to deferred benefits without terminating their employment.
Before exempting out of the New Scheme, you first need to:
- Confirm with your employer whether you're eligible to become an exempt officer.
- Receive exempt officer information/estimates from ESSSuper.
The formal eligibility requirements vary. Please refer to the New Scheme Handbook on our PDS and handbooks page or contact us for more details.
Thinking about retirement?
Contact us to discuss your options today.
Contact us