Public sector super funds

A public sector super fund is a superannuation fund for public sector employees. Public sector employees work in local government, the Commonwealth and State public services, public healthcare, emergency services, and the defence forces. Some public sector funds are defined benefit funds (final benefit is based on a formula and years of service – for more information on defined benefit funds click here), and some public sector defined benefit funds are known as untaxed schemes.

Untaxed schemes or untaxed super funds are where a benefit has not been subject to contributions tax or earnings tax because the government does not make an actual cash contribution during the working life of an employee. The final benefit from an untaxed scheme or fund is based on a formula and paid from consolidated revenue at retirement. Untaxed funds only affect about 10% of the population: most super funds are taxed funds, that is, super contributions are paid regularly and investment earnings are allocated regularly and all industry, retail and corporate super funds are taxed funds.

Some public sector funds are also taxed funds, and only certain public sector funds fall into the category of untaxed funds (or untaxed schemes) (for more information on taxed schemes, see types of superannuation funds and for more information on how taxed and untaxed schemes are taxed see the following SuperGuide articles:

• Retiring before the age of 60: the tax deal
• Tax-free super for over-60s, except for some