State Authorities Non-contributory Superannuation Act 1987

The Act defines its key terms in section 3. An employee is a person employed by an employer, but does not include an excluded person listed in Schedule 2. An employer includes the Crown, the Government, a Minister or other member of Parliament, and any authority specified in Schedule 1. Employment with successive employers counts as continuous employment. The definition of salary is central to benefit calculation. For non-executive officers, salary under section 4 includes remuneration, salary or wages payable in money, including certain shift allowances and other allowances of a kind included in the value of leave paid on termination of employment, but excludes overtime, bonuses, shift allowances beyond a prescribed amount, expense allowances, equipment allowances, and certain other categories. Weekly workers compensation payments for partial incapacity may also be treated as salary from a date determined by STC. For executive officers, section 4A provides a separate regime: the executive officer nominates a salary amount between the monetary remuneration and the total value of the remuneration package, and may elect to change that amount. Attributed salary is defined separately: for a full-time employee it is the salary, and for a part-time employee it is the salary that would be payable if the employee were employed full-time. The salary ratio is the employee’s salary divided by attributed salary; a full-time employee has a ratio of 1, a part-time employee has a ratio of at least 0.1 but less than 1, and an irregular employee is neither.

The basic benefit is calculated as F times Y, where F is the employee’s final salary (if death, retrenchment, or incapacity before age 55) or final average salary (in any other case), and Y is years of eligible service on a daily basis after the appointed day (section 22). Final average salary is the average of three attributed salary rates: on the exit date, on the preceding 31 December, and on the 31 December before that (section 21). Final salary is the attributed salary on the exit date. Eligible service is determined by regulations and excludes periods for which STC has determined contributions must not be accepted under section 18A, consistent with Commonwealth superannuation standards.

The Act distinguishes between contributing employees - those who contribute to an associated superannuation scheme or who have elected to contribute to the Fund under the State Authorities Superannuation Act 1987 - and non-contributing employees, who are not contributing employees (section 26C). Non-contributing employees receive a deferred accrued benefit under Part 4A, calculated under Schedule 4. The scheme also contains definitions for family law purposes in Part 4D, including employee spouse, non-employee spouse, payment split, and superannuation interest. The Act defines retire as ceasing employment on or after age 55 otherwise than by death, and resign as ceasing before age 55 otherwise than by death or invalidity as determined by STC. Retrenchment is defined in detail in section 3 as compulsory termination on grounds such as redundancy, completion of work, or reduction in workforce.

The Act directly affects employees of employers listed in Schedule 1, which is divided into three parts. Part 1 lists the Crown and other employers, including Public Service agencies, NSW Police Force, Health Administration Corporation, state-owned corporations such as Sydney Water and Hunter Water, universities, various trusts, and a large number of entities that have been added over time by order of the Governor under section 27. Many of these entries are limited to specific groups of employees, often those who were employed before a certain date or who transferred from another employer while remaining contributors to the State Superannuation Fund or State Authorities Superannuation Fund. Part 2 covers local government and other authorities (though the content of Part 2 is not reproduced in the provided text, it is referenced). Part 3 covers public health organisations within the meaning of the Health Services Act 1997.

The definition of employee excludes persons listed in Schedule 2. These include full-time employees who are eligible for a like benefit under another superannuation scheme; judges, associate judges, the Solicitor General, and the Director of Public Prosecutions; part-time or irregular employees who would otherwise receive dual benefits for the same service; executive officers who are optional members of the Aware Super Fund and who are not contributors to another statutory superannuation scheme; and persons who have made a conversion election under other Acts (unless that election has been revoked). The scheme is largely closed to new entrants after 8 December 1992, meaning its population is shrinking over time. The categories of employees who can still receive benefits are non-contributing employees who commenced before 1 July 1992; contributing employees as at 8 December 1992; employees who become contributing employees under specific provisions of the State Authorities Superannuation Act 1987; and employees exercising a transfer option under the Superannuation Administration Act 1996 (section 20A). Special provisions apply to firefighters under Part 4C, allowing regulations to make provision for death or incapacity benefits consistent with a firefighters award, and these provisions override other parts of the Act.

Executive officers have a unique salary nomination regime under section 4A, affecting how their benefits are calculated. Irregular employees are deemed when an employer certifies that the employee is unlikely to be a full-time or part-time employee for at least one year (section 7); they have separate contribution and benefit provisions under sections 17 and 22(2) and Schedule 4. The Act also affects spouses and de facto partners of deceased employees, who may receive benefits under sections 23(3) and 24(4), and non-employee spouses who may receive family law superannuation payments under Part 4D.

Employers listed in Schedule 1 have a duty to pay contributions to STC. For Part 1 employers (the Crown and other employers), section 14 requires payment of a percentage of each employee’s salary, the percentage being determined by STC with the concurrence of the Treasurer. For Part 2 employers (local government and other authorities), section 15 requires contributions at a rate determined by STC after actuarial advice and with the concurrence of the Treasurer, having regard to the full cost of liabilities for all Part 2 employers. For Part 3 employers (public health organisations), section 16 mirrors the Part 1 approach. Additionally, section 16A imposes an extra contribution of 0.25 per cent of salary for each relevant employee - those subject to wage limitations under the Statutory and Other Offices Remuneration Act 1975 or the Industrial Relations Act 1996 - payable to a fund managed by STC. Employers must provide information or evidence relating to employees as STC requires (section 28(1)). Failure to comply may lead STC to defer payment of a benefit (section 28(2)). Employers must also make deductions from an employee’s salary on STC’s written request to recover money owed to STC (section 32(2)).

STC has the duty to establish and maintain funds, accounts and reserves under sections 9 and 10, including employer reserves for each employer or group of employers. STC must pay employer contributions, income from investments, and Commonwealth co-contributions into the fund, and must pay from the fund administration costs, benefits, family law payments, and other amounts as required (section 9(3)). STC must establish a separate Commonwealth co-contribution account for each employee under section 10B, and an additional employer contributions account under section 10C. STC must adjust accounts and reserves for interest having regard to fund income (section 11). STC must investigate the state and sufficiency of funds at least every three years and report to the Minister (section 13). STC must give employees such information as it determines, having regard to the disclosure requirements that apply to regulated superannuation funds under the SIS Act (section 33A).

Employees have the right to receive a basic benefit, Commonwealth co-contribution benefit, and additional employer contributions benefit when they die, cease employment in circumstances compliant with the SIS Act requirements, or in other circumstances where payment is permitted or required under that Act (section 23). Employees may elect to preserve benefits on attaining age 65 (section 23A). They may request STC to purchase an annuity out of the benefit under section 25A. Disputes are handled under section 33B: a person aggrieved by an STC decision may dispute it, with notice to be served within two years of being notified of the right to dispute. The dispute is determined under the Superannuation Administration Act 1996. Employees must provide information or evidence that STC requires for benefit assessment, and may be required to undergo a medical examination (section 29). Failure to comply may allow STC to take action placing the claimant as nearly as possible in the position they would have been in had the information been provided (section 29(3)).

The Act provides STC with several mechanisms to recover money owing to it. Under section 32, STC may recover any money owing under the Act by an employee, employer or other person as a debt in a court of competent jurisdiction (except for unpaid contributions), by deduction from any amount payable under the Act to that person, or in the case of an employee by deduction from salary by instalments. The employer must, at STC’s written request, make such deductions and pay the amount to STC; the deduction is deemed to have been paid by the employee. Interest at a rate determined by STC is payable on any amount owing from when it became due until recovery.

If an employer fails to pay an additional payment required under section 10A (when the employer’s reserve is insufficient) within 14 days of written notice, the amount becomes a debt due to STC and may be recovered. Under section 28, if an employer fails to provide information or evidence that STC requires, STC may defer payment of a benefit to or in relation to the employee while the information is relevant to the right to receive the benefit.

For employees or claimants, section 29 gives STC the power to take action if the person fails to comply with a requirement to provide information, to authorise STC to obtain information from a third person, or to undergo a medical examination, or if the person provides an untrue statement. The action STC may take is that which would place the claimant as nearly as possible in the same position as if the information had been provided or the statement had not been untrue. This is a discretionary power, not a mandatory penalty. The Act does not create criminal offences for non-compliance; enforcement is primarily through civil debt recovery and the ability to adjust or defer benefit payments. Nothing in the Act prevents STC from making a payment on behalf of a person at their request (section 30(4)), and such a payment is deemed made to the person entitled.

The Act operates within a broader superannuation regulatory framework. It is explicitly subject to Commonwealth superannuation standards. Section 18A allows STC to determine that it must not accept contributions during any period necessary to be consistent with a relevant Commonwealth superannuation standard under the Superannuation Industry (Supervision) Act 1993. Contributions cannot be made for that period and the period is not included as eligible service. Section 23 ties the payment of benefits to compliance with the SIS Act: benefits are payable if the person ceases employment in circumstances in which a benefit is payable for the purpose of complying with SIS requirements for a regulated superannuation fund, or in any other circumstances in which a benefit may be paid under those requirements. The whole or part of a benefit must be paid if required under the SIS Act, and may be paid if permitted (section 23(2)-(2A)). The Act also references the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth) for Commonwealth co-contributions, and the Income Tax Assessment Act 1997 (Cth) for tax liabilities such as no-TFN tax (section 26AB).

Family law interactions are governed by Part 4D. The Act adopts definitions from Part VIIIB of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001. Section 27AI provides that nothing in the Act requires STC to pay a benefit to the extent it would contravene family law superannuation legislation, or prevents STC from paying or reducing a benefit as required under that legislation. Section 27AJ facilitates payment splits by requiring STC to pay or transfer the non-employee spouse’s entitlement. The reduction of the employee spouse’s benefit is provided for in section 27AK.

The Act interacts with workers compensation law: weekly workers compensation payments under the Workers Compensation Act 1987 are included as salary from a date determined by STC, subject to a cap in section 4(1A) so that the total of compensation and actual salary does not exceed the salary the employee would probably have earned but for the injury. The Act also references the Government Sector Employment Act 2013 for the definition of public service senior executive and salary arrangements, and the Police Act 1990 for police executive officers. The Succession Act 2006 is referenced for payment without grant of probate under section 31. The Superannuation Guarantee (Administration) Act 1992 (Cth) is referenced in Part 4A: section 26G requires STC to determine a minimum basic benefit to avoid a superannuation guarantee shortfall for certain non-contributing employees.

The Act also interacts with the Superannuation Administration Act 1996, which governs the administration of STC and provides for dispute resolution under section 33B. Transfers of preserved benefits to other funds are authorised under Part 4B, referencing the Aware Super Act 1992 and complying superannuation funds under the SIS Act. Privatisation provisions in Part 4AA allow the Minister to certify a transfer as a consequence of a Government privatisation initiative, with employer liabilities vesting in the Crown.

The Act commenced on 1 April 1988 and has been amended extensively. The marginal note to section 3 lists amendments from 1988 through to 2025. Key amending Acts include the Superannuation Legislation (Further Amendment) Act 1993, which inserted Part 4D and Schedule 5 savings provisions; the Superannuation Legislation Amendment Act 1997, which altered provisions for irregular employees and the closure of the scheme; the Superannuation Legislation Amendment (Same Sex Partners) Act 2000, which substituted the definition of spouse and inserted references to de facto partners; the Superannuation Legislation Amendment (Miscellaneous) Act 2001, which inserted Part 4B for transfer of preserved benefits; and the Superannuation Legislation Amendment (Family Law) Act 2003, which inserted Part 4D. The Superannuation Legislation Amendment Act 2005 inserted the Commonwealth co-contribution benefit provisions (sections 10B, 22A) and the restoration of death benefit provisions (section 26AA). The State Authorities Non-contributory Superannuation Amendment Act 2013 inserted the additional employer contributions benefit (sections 10C, 16A, 22B). The Act has also been amended by numerous statute law revision Acts and by orders under section 27 amending Schedules 1 and 2, as reflected in the extensive amendment history of Schedule 1, which runs from 1988 to 2026. The most recent amendments shown in the text are from 2025 (Act No 48, Sch 2.14) and 2026 (Schedule 1 amendments). The Act also contains its own savings and transitional provisions in Schedule 5, which validate actions taken before certain amendments and provide for the application of new definitions prospectively.

The Act itself does not name any court cases. It provides an internal dispute resolution mechanism in section 33B: an aggrieved person may dispute an STC decision and have the dispute determined under the Superannuation Administration Act 1996. Notice of dispute must be served within two years after notification of the right to dispute. This mechanism applies to decisions made before or after the commencement of section 33B (inserted in 2008), except those already in dispute. The Act also addresses competing claims for spouses’ benefits in section 24B: if a deceased employee has left more than one spouse or de facto partner, STC determines who receives the benefit or how it is apportioned. STC may withhold payment for 30 days after death. Any amount paid in good faith to a person purporting to be the spouse is taken to have been paid to the spouse. If no spouse exists, payment may be made to personal representatives or under section 31 (payment without probate). No other litigation-related provisions appear in the Act.

Several provisions require careful attention. First, the scheme is closed to new employees (section 20A). Practitioners must verify whether an employee was employed before 1 July 1992 or was a contributing employee before 8 December 1992, or falls within one of the other limited categories. Irregular employees are deemed under section 7 if the employer certifies they will not be full-time or part-time for at least one year; this deeming affects contribution and benefit calculations. Executive officers must nominate a salary within 28 days of appointment under section 4A(4); failure results in a default nomination equal to their monetary remuneration. The nominated salary cannot be less than monetary remuneration, and increases are capped at the percentage increase in the remuneration package. This can produce unintended consequences if the executive officer does not actively manage the nomination.

Benefits may be reduced by STC to offset certain tax liabilities. Section 26A requires STC to reduce benefits to offset income tax paid on employer contributions, but only for prescribed kinds of benefit and using a prescribed method. Section 26AB allows reduction for no-TFN tax. Section 26AA permits STC to increase a death benefit previously reduced under section 26A to obtain a tax deduction, but this is discretionary. These reductions can significantly affect the quantum of benefit received.

Preservation rules are strict. Section 24 requires preservation if the basic benefit is not otherwise payable. Once preserved, the benefit can only be paid in accordance with section 24, and payment may be deferred indefinitely until a condition of release under the SIS Act is satisfied. For non-contributing employees, a deferred accrued benefit replaces the basic benefit (section 26E), and the preservation event may be triggered by leaving the employer who employed them on 30 June 1992 (section 26F). Family law payment splits under Part 4D reduce the employee spouse’s benefit, and the reduction can apply to preserved or deferred benefits (section 27AK). The non-employee spouse’s entitlement is determined by STC, and if the non-employee spouse fails to nominate a fund within the prescribed period, the payment is transferred to the Aware Super Fund (section 27AJ(5)). Employers who cease to be in Schedule 1 due to privatisation may have liabilities vested in the Crown under Part 4AA, but the employer may still owe a net liability to STC as certified under section 27AB. The Act does not provide for this liability to be waived.

Employers must first ensure they are listed in Schedule 1, and that any limitations on their inclusion are observed. For each employee, the employer must pay contributions to STC. For Part 1 and Part 3 employers, the contribution is a percentage of salary determined by STC with Treasury concurrence (sections 14, 16). For Part 2 employers, the rate is determined after actuarial advice and must meet full cost liabilities (section 15). Contributions are calculated on the basis of contribution periods and must be paid within seven days after the last day of the contribution period (section 18(1)). The regulations may prescribe how salary is determined for part-time, irregular, leave without pay, secondment, or break-in-employment situations (section 18(2)). Employers must also pay an additional contribution under section 16A of 0.25 per cent of salary for each relevant employee subject to wage limitations, unless the employee is covered by a state industrial instrument that excludes the contribution from salary. The employer must provide such information or evidence as STC requires (section 28), and must make salary deductions on STC’s written request to recover money owing (section 32).

STC must establish and maintain funds, accounts and reserves as required, including separate employer reserves under section 10, Commonwealth co-contribution accounts under section 10B, and additional employer contributions accounts under section 10C. STC must adjust these for interest (section 11), and conduct actuarial investigations every three years (section 13). STC must give employees information determined under section 33A, having regard to regulated superannuation fund disclosure standards. STC must also give notice of decisions and the right to dispute under section 33B. STC must not accept contributions during any period inconsistent with Commonwealth superannuation standards (section 18A).

Employees must provide information or evidence STC requires for benefit assessment (section 29). If an employee fails to provide a tax file number, STC may be liable for no-TFN tax and may reduce the benefit accordingly (section 26AB). Employees should also nominate a salary if they are executive officers (section 4A), and should consider exercising any election to preserve benefits on attaining age 65 (section 23A). An employee who is eligible under another superannuation scheme for a benefit of the same kind may have their benefit preserved under section 24(2). Employees should also be aware that assignment or charge over a benefit is void (section 30), and that the benefit is not an asset in the employee’s estate for debt payment (section 30(3)). For family law matters, employees must notify STC of any payment split or flagging order, and the non-employee spouse must nominate a complying superannuation fund or RSA to receive their entitlement within the prescribed period (section 27AJ).