The Retirement Benefits Office is rejecting nearly all applications by public servants who have resigned for late election to preserve superannuation benefits.
About 600 people have applied late to preserve their superannuation benefits rather than be paid out. Many of these filled out a form at the time of resigning saying they wanted the cash, only to realise later that either there was an option to preserve their fund for greater benefits later.
Most of these came to that realisation since mid-1988 when a new superannuation scheme was introduced and public servants, service wide, were being called upon to elect between the new and old scheme.
Many public servants who had resigned (especially those who had later rejoined) reviewed their position and realised that if they had elected to preserve their fund they would be a lot better off in the future. Some of them say that the form presenting the option was ambiguous. It gave three option in order: if you resign to take a rebate of personal contributions, if you are retiring to take a lump sum, in any event to preserve the benefits for future payout. They argue that once they read the second option which was for retirees only, they thought that the third option was also for retirees only and not for younger resignees. Or they thought that if they took the third option they would have been obliged to maintain contributions until retirement age.
Most of those caught were women leaving the public service to have babies.
So they applied for a late election to preserve benefits. That is they want to pay back any cash they got and rejoin the super scheme. They say the proof that the form was ambiguous lies in the fact a working party set up to review forms called for it to be revamped with more explanation.
The Retirement Benefits says it has so far reviewed 457 of 602 applications and rejected 90 per cent of them. The 47 it accepted were cases where people had sought extra information and been given misleading replies or where people had not actually asked for their cash refund.
A spokesman said it was a case of late applicants wanting the cash at the time but upon seeing the extra benefits later on had changed their mind. The election upon resignation system had been going on since 1971. More late elections had arisen since 1988 with the introduction of the the new super scheme, and now they were down to a trickle.
As to the form, he said all retirement-benefits forms had been revamped following new computerisation.