Information on the Non-Contributory Vested Pension Benefit (Section 45A)

Vested Benefits are a benefit introduced to cover the pension period for Correctional Service, Police and Fire Service officers for the non-contribution period before 1990.

Who is eligible for the benefit?

The Vested Benefit only applies to:

Members of the Fire Service, Correctional Service and who commenced service before 1 January 1991; and
Members of the Police Force who joined before 1972 who left the Fund after that date.

The Vested Benefit is only payable where Members have completed a total of 20 years’ service of non-contributory and contributory service taken together. Once an officer has completed 20 years of total service they automatically become entitled on termination of employment to the payment of the benefit;

Termination after completion of 20 years of service is taken to mean separation of any reason including resignation, retrenchment, retirement on all grounds and termination by the employer for any cause. Retirement is taken to mean 50 years of age, but in order to draw the Benefit, the Member must have completed 20 years of service.

All payments of the Benefit will be paid by Nambawan Super in accordance with the Fund’s rules applicable to pensions and lump sums. Provided that they meet the Eligibility requirements under the Superannuation (General Provision) Act 2000. Members of departments and approved authorities that were required to contribute to Public Officers Superannuation Fund (POSF) prior to 1991 DO NOT qualify for this benefit.

Background on Vested Benefits

Prior to 1 January 1991, non-commissioned officers of the Correctional Service were not required to contribute to POSF but were entitled to a non-contributory pension after completing a minimum of 20 years of service. Members of the Fire Service were also not required to contribute to the Fund but were not entitled to a pension.

Members of the Police Force were required to contribute to NSL from 1972 onward so as other public servants. However, these Members already in the force prior to 1972 had the option not to contribute to POSF. Those who exercised the option not to contribute were entitled to a non-contributory pension after completing a minimum of 20 years’ service with the Police Force.

Changes after 1991

From 1 January 1991, the POSF Act made it compulsory for all permanent Public Servants including Members of the Fire Service, Correction Services and Police.

In recognition of the period of non-contributory service before 1991 by Fire Service, Correctional Service and Police Force Members, the POSF Act was amended to include a vested benefit in respect of service provided by these Members of the Fund where they exited the Fund after 1 January 1991.

Take note that anyone who ceased employment before 1991 is not eligible for this benefit.

Frequently asked questions about Vested Benefits

For a Member who started employment in 1980 but was not contributing until 2001, is the Member eligible for section 45A?

Yes, the Member is eligible based on:

Continued service over 20 years without any break (eg. termination or suspension)
Not contributing for the last 20 years

If a Member was employed in 1975 and started contributing in 1980 what happens to their contribution between 1975 and 1980?

This period is deemed as a lost period to the Member because contributions were not mandatory and it was the law back then. So the responsibility does not fall on any party but on the Member.

Is there a set time for eligible Members who have exited to apply for the benefit?

Members can apply when they exit the Fund.

How often does NSL receive funding from the Government to pay this benefit?

NSL will pay whenever the State provides funding.

If a Member qualifying for Vested Benefits passes away, will their beneficiaries be paid the entitlements?

Yes, if the Member did not receive the payments before the time of their demise.

Are Vested Benefit payments included in my normal benefit payment or are they paid separately?

The two components are paid separately.

When will the pension payment of Vested Benefits cease for pensioners?

Vested Benefits are not a pension payment. It is paid to eligible officers when they exit employment as a one-off lump sum.

Will the interest be added to my Vested Benefits for those missing(non-contributory) years?

No. Interest is not calculated and applied. The Vested Benefits payment is a one-off payment to compensate officers who were not eligible to contribute due to the law at that time (prior to 1991) not allowing them to.

How can I access Vested Benefits if I am the beneficiary of the pensioner?

Beneficiaries of pensioners are not able to access Vested Benefit payments because each retiring officer is entitled to only one benefit - either superannuation, or pension.

How is the Vested Benefits payment calculated?

It is calculated from gross salary as at 1 January 1991. This information is provided by the respective employer to NSL.

Who is responsible for the payment of Vested Benefits?

The State is responsible. NSL only facilitates the payments once they are received from the State.

Can I get Vested Benefit payments if I’m on a pension?

No. An officer is only entitled to one benefit; either superannuation, or pension.

If you still have queries, contact our Employer & Stakeholder Relations team, or you can read more here.