Legislative changes to Local Government Superannuation

By Jodie Jenings, Senior Consultant/Senior Workforce Advisor, Legal and Workforce

The Queensland Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024 was passed by parliament on 23 May 2024, and introduces changes to the Local Government Act 2009, that came into effect on 1 July 2024, relating to yearly contributions for permanent Local Government employees.  

The relevant provision of the Bill, for Local Government, which can be found here: Local Government Act 2009

Part 3, Division 3 – Amendment of Local Government Act 2009

Clause 100 (Page 91)

220A Amount of yearly contributions—permanent employees 

(1) A permanent employee of a local government or local government entity (each an employer) must make a yearly contribution to the relevant fund for the employee. 

(2) The amount of the yearly contribution is the amount prescribed by regulation. 

(3) However, if the permanent employee is not a defined benefit member, the employee may change the amount of the yearly contribution to a particular rate of the employee’s salary. 

(4) For subsection (3)— 

(a) the rate may be 0%; and 

(b) the employee must give the employer notice of the change. 

(5) Despite subsection (1), the permanent employee need not make the yearly contribution if the employer makes the contribution, in accordance with the employee’s remuneration agreement, as well as the yearly contribution the employer is required to make under section 220. 

(6) If subsection (5) applies, despite any other Act the employer may deduct all or part of the yearly contribution from— 

(a) the permanent employee’s salary; or 

(b) any money the permanent employee owes to the employer. 

(7) If subsection (5) applies and the permanent employee changes the amount of the yearly contribution under subsection (3), the change takes effect at the start of the employee’s first pay period, after notice of the change is given under subsection (4)(b), by which the employer can practicably implement the change. 

(8) If the permanent employee is required under an industrial instrument to make superannuation contributions, the superannuation contribution required under the industrial instrument is not in addition to the yearly contribution the employee is required to make under this section. 

(9) Subsections (1) and (5) are subject to section 220B. 

Summary

Subject to an industrial instrument requiring a permanent employee to make superannuation contributions (as noted in subsection (8) above), the amendment gives all current ‘accumulation’ permanent employees of a Local Government or Local Government Entity the ability to opt out of the mandatory 6% contribution, by giving council notice in writing and will take effect at the start of the employee’s first pay period, after notice of the change is given.   

Employees may nominate to council a percentage in which they would like to contribute which can be 0%, this also includes those currently contributing under a financial hardship exemption.   

Definition of Permanent Employee as outlined in the Local Government Act 2009 – Section 216B

An employee of a local government other than the Brisbane City Council is a 

"permanent employee" of the local government if— 

(a) the employee has been continuously employed by the local government for at least 1 year; or 

(b) the employee has been continuously employed by the local government for less than 1 year but has elected to be a permanent employee for this part by notice given to the local government. 

Therefore, if an employee elects to become a permanent employee of council prior to 1 year of continuous employment, they will be eligible to receive the 12% yearly contribution as prescribed in the Loal Government Regulation 2012 – Section 375.   

Employees are encouraged to continue to make personal contributions to their Superannuation funds to achieve the best possible retirement outcome and before taking action to change their contribution, Peak Services recommends seeking financial advice. 

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If you have any questions relating to this change, please contact us on 07 3000 2148 or at peaklegal@wearepeak.com.au