AUSTRALIA - The Labor party has tabled in the Senate secret correspondence between Telstra and the T3 sales taskforce over the cut in pension benefits facing Telstra employees.
The tabling of the discussion follows yesterday's revelation that 1800 Telstra employees currently paying into the Commonwealth Superannuation Scheme (CSS) would lose their superannuation benefits once the government completes the sale of A$8bn of its 51% share in the telecoms company (approximately a third of its holdings in the company) and hands its remaining shares over to the Future Fund.
According to shadow minister for superannuation Nick Sherry, the finance minister, senator Nick Minchin, had previously promised in the Senate on 7 September that "superannuation conditions would continue" for Telstra workers once the partial flotation (the third for the company, hence the title T3) and share transfer had taken place.
However, the T3 prospectus states: "Telstra employees who are members of the CSS will cease to be eligible employees for the purpose of the Superannuation Act, 1976, and will no longer be entitled to contribute to the CSS".
The Labor party tabled what it described as "secret" correspondence between Telstra and the T3 sales taskforce in which Telstra argued there was "a compelling case in support of Telstra's CSS members remaining in the CSS" and said its "legal advice is that the Deed of Release under which the Commonwealth assumed liability for Telstra's CSS members is a legally binding document on the three parties".
Both Telstra and the government face possible legal action on the part of Telstra employees over the "illegal" pension cuts.
The sale of Telstra is due to take place this month or the next and has been said by prime minister John Howard to be necessary to address the conflict of interest caused by the government being both regulator and major shareholder of the company.
The Co-operative Group's Somerfield Pension Scheme has completed a buy-in with Pension Insurance Corporation (PIC), insuring the benefits of its pensioner members.
Caroline Rookes CBE and Michele Hirons-Wood have joined The Pension Superfund's board of trustees to focus on maintaining governance standards and safeguarding member benefits.
The first specialist independent firm advising pension schemes on bulk annuities or moving to a consolidator has been set up with ambitions to shake up the market.