Summary of 2002-2003
Report to Members of the Police Superannuation Scheme
The information below is a summary of the Report to Members for 2002-2003 which was recently forwarded to you with your Member Benefit Statement as at 30 June 2003.
Police Superannuation Board
The Police Superannuation Board is responsible for the administration
of the Police Superannuation Scheme. Funds SA is responsible for the
management and investment of the Police Schemes.
Police Superannuation Fund
The market value of the Police Superannuation Fund as at 30 June
2003 was $228 million compared to $233 million as at 30 June 2002.
Funds SA is responsible for the management and investment of the assets
of the Police Superannuation Fund. The decrease in the market value
of the Fund resulted from significant negative returns from world
share markets over the past financial year.
Investment Return
For the 2002-2003 financial year Funds SA achieved investment returns,
on a money weighted basis (net of investment fees), of negative 0.7
per cent for the Pension Scheme and negative 0.3 for the Lump Sum
Scheme. The past financial year was very challenging for investors,
globally. The negative investment returns resulted from negative returns
from world share markets.
The following table shows the investment returns (after fees) achieved
by Funds SA over the past five years.
| INVESTMENT RETURNS |
| SCHEME |
1999 |
2000 |
2001 |
2002 |
2003 |
5years annualised |
| PENSION |
9.5% |
16.9% |
3.2% |
-5.3% |
-0.7% |
4.4% |
| LUMP SUM |
10.3% |
17.0% |
3.0% |
-5.2% |
-0.3% |
4.7% |
Crediting Rates
As the Pension and Lump Sum schemes provide defined benefits upon
retirement, invalidity and death, these benefits are not affected
by crediting rates. Crediting rates affect benefits payable to members
who resign prior to age 50 and elect to take a cash withdrawal benefit
equal to the balance of their member contribution account.
Member Contribution Accounts
The crediting rate policy for member contribution accounts is based
on the average of the net rates of return (money weighted return net
of investment fees and the Board’s administration costs) over the
previous three years.
The Board declared end of year crediting rates, for the Pension and
Lump Sum Scheme Divisions, of negative 1 per cent to be applied to
member contribution accounts as at 30 June 2003.
| MEMBER CONTRIBUTION ACCOUNT CREDITING RATES |
| SCHEME |
1999 |
2000 |
2001 |
2002 |
2003 |
5years annualised |
| PENSION |
14.3% |
13.0% |
9.8% |
4.9% |
-1.0% |
8.1% |
| LUMP SUM |
14.0% |
12.9% |
9.9% |
4.8% |
-1.0% |
8.0% |
Voluntary Contribution and Roll Over Accounts
The crediting rate policies for voluntary contribution and roll over
accounts are based on the net rates of return (money weighted return
net of investment fees and the Board’s administration costs), as advised
by Funds SA, as at 30 June each year. The Board declared end of year
crediting rates, for the Pension and Lump Sum Scheme Divisions, of
negative 0.8 per cent and negative 0.4 per cent respectively to be
applied to voluntary contribution and roll over accounts as at 30
June 2003.
VOLUNTARY CONTRIBUTION ACCOUNTS AND ROLL OVER ACCOUNTS
CREDITING RATES |
| SCHEME |
2002 |
2003 |
| PENSION |
-5.3% |
-0.8% |
| LUMP SUM |
-5.4% |
-0.4% |
Membership
The Police Superannuation Scheme is closed to new police officers
and as at 30 June 2003 had a total of 2,674 contributors and 167 preserved
members and 1,119 pensioners. There were a total of 102 exits (100
contributors and 2 preserved members) during 2002-2003.
Employer Contribution
During 2002-2003 a total of $23.3 million ($22.7 million in 2001-2002)
was deposited into the Police Employer Account to meet the Government’s
proportion of benefit payments. As at 30 June 2003 the balance of
the Police Employer Account stood at $173.1 million, compared with
$179.8 million as at 30 June 2003.
Benefit Payments
During 2002-2003 the pension and lump sum benefits paid to members,
spouses and children totalled $38.5 million ($37.8 million 2001-2002).
The Government’s prescribed proportion of benefit payments during
2002-2003 was $28.5 million ($28.7 million 2001-2002). The Fund’s
prescribed proportion of benefit payments during 2002-2003 was $10
million ($9.1 million 2001-2002).
During 2002-2003 a total of $1.1 million ($1.5 million in 2001-2002)
was paid by the Fund to the 33 members who resigned and elected to
take a cash withdrawal benefit (a refund of personal member contributions
plus accrued interest).
Merry Christmas and happy New Year
The Police Superannuation Board and staff wish all serving and retired
members and their families a merry Christmas and a happy New Year.
Member information
For information regarding superannuation, contact the Police Superannuation
Office or refer to the website above. Access to the website is now
available on the SAPOL Intranet under Services, Business Service,
FMSB. Group information sessions can be arranged upon request.
