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Telstra Superannuation Scheme - AFR Story

11 November 2002

Telstra Superannuation Scheme

The front page story in today's Australian Financial Review referred to a " $3.4 bn unfunded super hole" in its headline, relating to amounts owed by the Commonwealth to the Telstra Superannuation Scheme (TSS).

The substance of the story is not new, and much of the material appears sourced from previous Telstra disclosures and statements in public documents such as our Annual Report.

Telstra's 2002 Annual Report confirms there is a surplus within the TSS, and all TSS obligations to its members are fully funded. The Annual Report provides further details relating to our superannuation position and arrangements.

The Commonwealth's obligations refer to the commencement of the TSS in 1990, when Telstra employees, then members of the Commonwealth Superannuation Scheme (CSS) were given the opportunity to transfer from the CSS to the TSS.

The Commonwealth is required by law to make payments to the TSS with respect to the obligations that the TSS assumed for benefits of transferring CSS members.

These amounts continue to be paid to the Telstra Superannuation Scheme from consolidated revenues in accordance with a schedule of quarterly payments under Ministerial Determinations pursuant to the Superannuation Act 1976.

The Commonwealth has not explicitly set aside funds to pay the full amounts owing to Telstra - this seems to be at the core of the media story - although this approach has been the normal policy of governments towards superannuation liabilities for many years.

The manner in which the Commonwealth chooses to fund its superannuation obligations to the TSS does not affect the funding position of the TSS.


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